Directors Report of Multi Commodity Exchange of India Ltd.

Mar 31, 2025

The Board of Directors present the Twenty Third Annual Report of your Company, along with the Audited Financial Statement of Accounts
for the Financial Year (FY) ended 31^st March, 2025.

1. STATE OF COMPANY'S AFFAIRS

FINANCIAL RESULTS

The Company's financial performance for the Financial Year (FY) ended 31^st March, 2025 is summarized below:

Particulars	Standalone		Consolidated
Â	2024-25	2023-24	2024-25	2023-24
Total Income	1,10,737	67,124	1,20,886	75,894
Total Operating Expenditure	49,154	56,601	44,735	61,924
Profit before interest, depreciation, exceptional items and tax	61,583	10,523	76,151	13,970
Less: Depreciation	6,161	3,439	6,375	3,593
Less: Interest	17	23	45	27
Less: Exceptional item	-	-	-	-
Add / (Less): Share of loss of Associate	-	-	209	(152)
Profit after exceptional items and Share of Profit / (loss) of Associate but before tax	55,405	7,061	69,940	10,198
Less: Provision for tax	13,927	1,865	13,936	1,887
Profit after tax	41,478	5,196	56,004	8,311
Add/(Less): Other Comprehensive Income (net of tax)	467	(329)	223	(151)
Total Comprehensive Income for the period (Comprising Profit and Other Comprehensive Income for the period)	41,945	4,867	56,227	8,160
Earnings per share (EPS)	Â	Â	Â	Â
i. Basic (?)	81.33	10.19	109.82	16.30
ii. Diluted (?)	81.33	10.19	109.82	16.30

FINANCIAL HIGHLIGHTS

For FY 2024-25, your Company's (Standalone) total income
stood at ? 1,10,737 lakh as compared to ? 67,124 lakh in FY
2023-24. The operating income during the year under review
was ? 1,01,158 lakh as against ? 59,495 lakh in FY 2023-24. Net
profit after tax in FY 2024-25 was ? 41,478 lakh as compared
to ? 5,196 lakh in FY 2023-24.

The net worth of the Company as at 31^st March, 2025 stood
at ? 1,92,750 lakh as compared to ? 1,54,701 lakh as at 31^st
March, 2024.

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. 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 2024-25, the Average Daily Turnover (ADT) of
commodity futures contracts stood at ? 27,153 crore vis-a¬
vis ? 19,636 crore in FY 2023-24, witnessing a rise of 38%.
However, during the same period, the options notional ADT
went up by 115% to ? 1,91,910 crore from ? 89,244 crore.
The Average Realization Rate (ARR) for the futures stood at ?
2.08 per Lakh vis-a-vis ? 2.10 per lakh (each side) during the
previous year. Overall traded Unique Client Codes for futures
and options (UCC - PAN based) during the period increased
to 13 lakh from 9.3 lakh in the previous year.

The total turnover of commodity futures traded on your
Exchange increased by 40% to ? 70.05 lakh crore in FY
2024-25 as against ? 49.88 lakh crore in FY 2023-24. Further,
options turnover for the year went up by 118% to a record

total turnover of ? 495.13 lakh crore as against ? 226.68 lakh
crore in the previous year. The futures in bullion, energy,
metals and agriculture registered a turnover of ? 45.24 lakh
crore, ? 16.69 lakh crore, ? 8.07 lakh crore and ? 0.03 lakh
crore, respectively, as against ? 31.11 lakh crore, ? 13.82 lakh
crore, ? 4.80 lakh crore and ? 0.06 lakh crore in the previous
year. On the other hand, options turnover in energy, bullion
and metals recorded total of ? 401.96 lakh crore, ? 92.63 lakh
crore and ? 0.53 lakh crore, respectively, during FY 2024-25
vis-a-vis ? 203.43 lakh crore, ? 23.21 lakh crore and ? 0.05 lakh
crore , in the previous year.

In terms of metal delivery, a total of 69,384 metric tonnes
(MT) of Base Metals were delivered through the exchange
mechanism during FY 2024-25 as against 94,036 metric
tonnes in FY 2023-24. During FY 2024-25, your Company's
market share in commodity futures market stood at 98.1%
as against 95.9% in the previous year. The volume of futures
(in terms of contracts) traded on the Exchange increased by
19% in FY 2024-25, to 161.3 million lots, as compared to 135.3
million lots in FY 2023-24. On the other hand, the volume
of Options (in terms of contracts) traded increased by 114%
in FY 2024-25, to 815.3 million lots, as compared to 381.4
million lots in FY 2023-24.

GLOBAL COMMODITY MARKET

I n 2024, global commodity markets saw notable price
fluctuations across various sectors. Precious metal prices rose
the most, with Gold prices on COMEX (CME Group) closing
the year at approximately USD 2,653 per troy ounce—a 28%
increase. Silver also rose, closing around USD 29 per troy
ounce on COMEX, up 21%. In non-precious metals, Zinc led
with a 12% increase on LME, closing at USD 2,990 per tonne.
Aluminium and Copper followed with increases of 7% and
3%, closing at USD 2,556 and USD 8,789 per ton, respectively
on LME. Conversely, Lead fell, declining 5% to USD 1,955 per
tonne due to weaker battery production demand. The energy
sector showed mixed results. WTI Crude Oil Futures remained
stable at USD 71.72 per barrel on NYMEX (CME Group), while
Natural Gas prices surged 44.5%, ending at USD 3.63 per
MMBtu, driven by heating demand. Agricultural commodities'
prices faced a decline, with US Cotton falling 16% to USD 6.84
per pound on Intercontinental Exchange due to inventory
build-up. Wheat and Soybean prices also dropped 12% and
23% on CBOT (CME Group), closing at USD 5.51 and USD 9.98
per bushel, respectively, influenced by increased yields and
shifting demand. Overall, 2024 was marked by volatility and
contrasting trends across the commodity landscape.

In 2024, global commodity derivatives market volumes rose
by 15.1% year-on-year to 9.68 billion contracts, according
to the Futures Industry Association (FIA). Precious Metals,
Energy, and Non-Precious Metals saw significant increases
in trade volumes, rising by 45%, 26%, and 17%, respectively
in 2024 over 2023, while Agri-commodities declined by 2.5%.

The global economy grew moderately by 3.3% in 2024, as
per estimates of the International Monetary Fund (IMF),
maintaining the same rate as the previous year but below

the pre-pandemic average of 3.6%. Global growth was driven
significantly by easing of monetary policies, which had earlier
been kept restrictive by central banks for combating inflation.
However, challenges persisted, particularly with potential
trade tensions following the U.S. elections. The IMF's World
Economic Outlook report of April 2025 projects slower
growth for 2025 and 2026 at 2.8% and 3.0%, respectively,
as the global economy faces headwinds from rising trade
tensions and financial market adjustments, though factors
like disinflation, resilient labour markets and advancements
in technology, especially in Artificial Intelligence, can play
supportive roles.

I ndia would continue to be a bright spot in the global
economy and remain one of the fastest-growing major
economies, notes the IMF. For the year 2025 and 2026, the
IMF projects India's economic growth at 6.2% and 6.3%
respectively, on the backdrop of improving supply chains,
resilient services exports, and stable monetary policy.

Your Company's performance during the year 2024-25 and
outlook during the year 2025-26 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 31^st March,
2025, the paid-up share capital of your Company stood at ?
5,099.84 lakh comprising of 5,09,98,369 Equity shares of ? 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. The Board of Directors at their meeting held on 01^st
August 2025, has approved sub-division/split of 1 (one)
equity share of face value of ' 10/- (Rupees ten only) each
fully paid-up into 5 (five) equity shares of face value of ' 2/-
(Rupees Two only) each fully paid-up. This shall be subject
to statutory and regulatory approvals as applicable, and
approval of shareholders of the Company.

4.    TRANSFER TO RESERVES

The Company was not required to transfer any amount of
profits to general reserves for FY 2024-25, pursuant to the
provisions of Companies Act, 2013.

5.    SURPLUS IN PROFIT & LOSS ACCOUNT

An amount of ? 1,53,520 lakh (Previous Year ? 1,15,875 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 08^th May, 2025, have recommended a dividend of ? 30
(300%) per equity share on a face value of ? 10 per share
for the Financial Year ended 31^st March, 2025, subject to the
approval of shareholders at the ensuing Annual General
Meeting.

The said dividend is in line with the Dividend Distribution
Policy of the Company.

The outgo on account of the proposed dividend of 300%
(Previous Year 76%) to be paid by the Company aggregates
to approximately ? 15,300 lakh, being a payout of 37% of the
profit after tax (PAT) for the year ended 31^st March, 2025, as
against ? 3,896 lakh during the previous year.

Your Directors' have recommended 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 23^rd AGM.

7.    MEMORANDUM AND ARTICLES OF ASSOCIATION

During the year under review, there has been no change
in the Memorandum of Association ('MOA') and Articles of
Association ('AOA') of the Company. The Board of Directors
at their meeting held on 01^st August, 2025, has approved
the alteration of Capital Clause of the Memorandum
of Association of the Company consequent to the sub-
division/split of existing equity shares. This shall be subject
to statutory and regulatory approvals as applicable, and
approval of shareholders of the Company.

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. EVENT OCCURED 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 2024-25 to
which the financial statement relate and the date of this
Report.

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

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. However, following
material orders were passed by the Regulator:

a.    In the SEBI SCN dated 16^th October, 2023
pertaining to failure of both MCX and MCXCCL
to implement the SEBI Circular dated 13^th
September, 2017 on outsourcing of Activities,
the matter was subsequently heard and an Order
was passed on 26^th May, 2025 wherein SEBI had
dropped all the allegations against MCX & its 3
(three) past and 1 (one) current Key Managerial
Persons and held only MCX liable, with respect to
failure to make appropriate timely disclosure with
respect to extension of the software services with
the erstwhile Technology vendor for the period
October 2022 to June 2023 in terms of Regulation
4 (1)(d), 4(1) (e), 4(1)(i) and 30(12) of the LODR
Regulations, 2015 read with Regulation 33(1) of
SECC Regulation, 2018 and imposed a penalty
of ' 25,00,000 (Rupees Twenty-Five Lakhs only)
under section 15HB of the SEBI Act, 1992, which
has been paid by the Exchange. In the aforesaid
order dated 26^th May, 2025, the proceedings in
respect of the SCN for MCXCCL and its KMP, were
disposed of without any directions.

b.    SEBI has passed a Settlement Order No. SO//
PSD/2024-25/8048 dated 01^st April, 2025
("Settlement Order") on our Subsidiary Company,
Multi Commodity Exchange Clearing Corporation
Limited with respect to Settlement application
filed by them in connection to their alleged
violation of SEBI Circular on 'Additional risk
management norms for National Commodity
Derivatives Exchanges' bearing reference no.
SEBI/HO/CDMRD/DRMP/CIR/P/2016/77 dated
01^st September, 2016 read with Master Circular
dated 04^th August, 2023 and Regulation 7(4)

(b) of the Securities Contracts (Regulations)
(Stock Exchanges and Clearing Corporations)
Regulations, 2018 ("SECC Reg").

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.

 

Our Subsidiary Company filed a suo moto
settlement application in terms of the SEBI
(Settlement Proceedings) Regulations, 2018
to settle by neither admitting nor denying the
findings of fact and conclusions of law, the
enforcement proceedings that may be initiated
against the Company, for the alleged violation of
the said SEBI Circular.

A Settlement Amount of ' 2,70,00,000 (Rupees
Two Crores Seventy Lakhs only) was paid by our
Subsidiary Company. There is no material impact
on operations or other activities of MCX and our
Subsidiary Company arising out of payment of
settlement amount.

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 2016-17	? 15/-	22nd August, 2017	21st October, 2024	? 7,94,115 /-

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. Members who
have not encashed any of their dividends, which have not
been transferred to IEPF Authority, are advised to claim their
dividends.

Accordingly, 782 equity shares of ? 10/- each on which
the dividend remained unpaid or unclaimed for last seven

consecutive years with reference to the due date of 27^th
October, 2024, were transferred during the FY 2024-25 to
the IEPF Authority on 26^th October, 2024 after following the
prescribed procedure.

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: [e-mail]

The Company has transferred the following unclaimed dividend amount and shares to IEPF till 31^st March, 2025:

Sr. No	Year	No. of shares transferred to IEPF	Category amount transferred to IEPF	Amount transferred to IEPF (in ¥)
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.	2015-16 Final	1496	Unclaimed Dividend	3,79,002
9.	2016-17 Final	1167	Unclaimed Dividend	7,94,115
10.	-	-	IPO Refund	26,55,276
Â	Total	5928	Â	79,40,362

Year wise amount of Unpaid/Unclaimed Dividend lying in the unpaid account upto 31^st March, 2025, 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, 2025	Due Date of transfer of Unpaid and Unclaimed Dividend to IEPF
1.	16th AGM Final Dividend 2017-18 held on 31st August, 2018	3186	53240	' 905080.00	05th November, 2025
2.	17th AGM Final Dividend 2018-19 held on 20th September, 2019	2542	42529	' 850580.00	25th November, 2026
3.	18th AGM Final Dividend 2019-20 held on 31st August, 2020	3816	74252	' 2162277.00	05th November, 2027
4.	19th AGM Final Dividend 2020-21 held on 03rd September, 2021	2089	38376	' 1016457.60	08th October, 2028
5.	20th AGM Final Dividend 2021-22 held on 27th September, 2022	1706	36070	' 594401.00	01st December, 2029
6.	21st AGM Final Dividend 2022-23 held on 26th September, 2023	1270	24782	' 448521.38	30th November, 2030
7.	22nd AGM Final Dividend 2023-24 held on 26th September, 2024	1426	39201	' 271521.64	30th November, 2031

Shareholders are encouraged to claim their outstanding or unclaimed dividends to prevent the transfer of such dividends and the
related shares to the IEPF.

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 31^st March, 2025.

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 31^st March, 2025, 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 FY 2024-25, 23 (Twenty-Three) 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 22^nd May, 2024, 22^nd July, 2024 and 19^th November, 2024.

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 capital markets, finance
and accountancy, legal and regulatory practice, technology,
risk management and management or administration. 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 31^st March, 2025, the Board comprised of 8 (eight)
Directors, of which 5 (five) were Public Interest Directors
(PID)/Independent Directors, 2 (two) were 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 and 1
(One) Women MD & CEO.

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 SEBI, is in conflict with his/her role. 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 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 in accordance with the SECC Regulations, 2018, SEBI
(LODR) Regulations, 2015 from all the Directors, as applicable
to them.

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 first term of Mr. C S
Verma (DIN: 00121756) was due for completion on 21^st
May, 2024. The Exchange was also proposing to appoint an
additional Public Interest Director. Accordingly, upon the
recommendation of the Nomination and Remuneration
Committee (NRC) and the Board of Directors, SEBI vide letter
dated 12^th March, 2024 has approved the re-appointment of
Mr. C S Verma and appointment of Dr. Navrang Saini (DIN:
09650867) as Public Interest Directors of the Company. The
Board of Directors had approved the re-appointment of Mr.
C S Verma as PID for further period of 3 years with effect from
22^nd May, 2024 and appointment of Dr. Navrang Saini as PID
for 3 years with effect from 14^th March, 2024.

The tenure of Mr. P.S. Reddy (DIN: 01064530) as Managing
Director and Chief Executive Officer (MD & CEO) of MCX was
completed on 09^th May, 2024.

Ms. Suparna Tandon (DIN: 08429718), vide her email dated
21^st July, 2024 has tendered her resignation as Non-Executive,
NID of the Company pursuant to her voluntary retirement
with effect from 19^th July, 2024, from the services of NABARD.
Accordingly, Ms. Tandon ceased to be NID of the Company
with effect from 19^th July, 2024.

During the year under review, the first term of Dr. Harsh
Kumar Bhanwala (DIN: 06417704) was due for completion on
07^th August, 2024. Accordingly, upon the recommendation of
the Nomination and Remuneration Committee (NRC) and the

Board of Directors, SEBI vide letters dated 24^th June, 2024 and
24^th July, 2024 has approved the re-appointment of Dr. Harsh
Kumar Bhanwala as Public Interest Director and Chairman of
the Company, respectively for further period of 3 years with
effect from 08^th August, 2024.

Pursuant to Section 152 of the Companies Act, 2013 read
with relevant rules framed thereunder, Mr. Mohan Shenoi
(DIN:01603606), Non-Independent Director (NID) of the
Company, was liable to retire by rotation at the 22^nd Annual
General Meeting ("AGM") held on 26^th September, 2024.
Accordingly, shareholders at their 22^nd AGM approved the
re-appointment of Mr. Mohan Shenoi as NID of the Company.
His re-appointment was subject to regulatory approval.
SEBI vide letter dated 18^th October, 2024 approved the re¬
appointment of Mr. Mohan Shenoi as NID of the Company.

SEBI vide its letter dated 08^th August, 2024, approved the
appointment of Ms. Praveena Rai (DIN: 09474203) as MD &
CEO of the Company for a period of five years, effective from
the date of her joining. The NRC and the Board at its meeting
held on 10^th August, 2024, approved the appointment, terms
and conditions including remuneration of Ms. Praveena Rai
as MD & CEO, subject to the approval by the Shareholders.
The shareholders at their 22^nd Annual General Meeting held
on 26^th September, 2024 through special resolution had
approved the appointment of Ms. Praveena Rai as MD & CEO.
Ms. Rai joined the Company on 31^st October, 2024.

The Board of Directors places on record their earnest
appreciation to the invaluable contribution, leadership
and guidance extended by Ms. Suparna Tandon and Mr. P. S
Reddy to the Board and the Management of the Company
during their association.

I n accordance with the provisions of the Companies Act,
2013, Mr. Arvind Kathpalia (DIN: 02630873), NID, 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.

The first term of Mr. Ashutosh Vaidya (DIN: 06751825) and Ms.
Sonu Bhasin (DIN: 02872234) will be due for completion on
16^th September, 2025. Accordingly, upon recommendation
of the Nomination and Remuneration Committee (NRC) and
the Board of Directors, the application of re-appointment for
further 3 years was made to the Regulator SEBI vide letter
dated 7^th July, 2025 approved their re-appointment.

15. INDEPENDENT EXTERNAL EXPERT

During the year under review, Mr. Madhusudhan KM had
resigned as an Independent External Expert in the Standing
Committee on Technology (SCT) with effect from 23^rd July,
2024. In view of the same, Mr. PVS Murthy was appointed as
an Independent External Expert in Standing Committee on
Technology with effect from 27^th July, 2024.

During the year under review, the tenure of Mr. Moiz Husain
Ali as an Independent External Expert in the SCT was
completed on 27^th March, 2025 pursuant to SECC Regulations,
2018. In view of the same, Mr. Santanu Paul was appointed as
an Independent External Expert in SCT with effect from 28^th
March, 2025.

The Independent External Experts are appointed for a period
of three years, with further extension of three years subject to
performance evaluation in accordance with SECC Regulations,
2018. Further, internal performance evaluation of Independent
External Experts are carried out annually.

16. KEY MANAGERIAL PERSONNEL (KMP)

The following employees became KMPs under the SECC Regulations, 2018 during FY 2024-25:

Sr. No.	Name	Effective Date
1	Mr. Chandresh Shah	18 April 2024
2	Mr. Sunil Batra	26 April 2024
3	Mr. Shailendra Aggarwal	23 rd May, 2024
4	Ms. Praveena Rai	31st October, 2024
5	Mr. Mitesh Haresh Thakkar	28 November 2024
6	Mr. Sougat Ghosh	03rd March, 2025

Further, the following employees ceased to be KMPs under the SECC Regulations, 2018 during FY 2024-25:

Sr. No.	Name	Last working day as KMP
1	Mr. Satyajeet Bolar	30 April 2024
2	Mr. P S Reddy	09 May 2024
3	Mr. Ramesh Gurram	27 September 2024
4	Mr. Harvinder Singh	22nd November, 2024
5	Mr. Chirag Aspi Sodawaterwalla	24 December 2024
6	Mr. Mitesh Haresh Thakkar	12 March 2025

Dr. N Rajendran ceased to be the Chief Digital Officer with effect from the closing hours of 7^th April, 2025.

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 05^th January,
2017 providing guidance to listed entities about various
aspects involved in the Board Evaluation process ("SEBI
Guidance Note") and SEBI circular dated 05^th 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,
attendance records, disclosures, 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
Master Circular for Stock Exchanges and Clearing
Corporations, 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

The performances of the Committees are evaluated
based on parameters such as, Mandate and
composition, Effectiveness of the Committees, Structure
of the Committees and their meetings, Independence
of the Committees from the Board, Contribution to the
decisions of the Board, etc.

The detailed procedure followed for the performance
evaluation of the Board, Committees, Chairman,
individual Directors & Independent External Persons
is enumerated in the Corporate Governance Report
forming part of this Annual Report.

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
largest Exchange by the number of commodity Options
contracts traded and sixth largest Exchange by the number
of Commodity Derivatives contracts traded during the year
2024.(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 has also

signed Memorandum of Understanding with renowned
global exchanges viz. Dalian Commodity Exchange (DCE),
Taiwan Futures Exchange (TAIFEX), Jakarta Futures Exchange
(JFX), 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, which concluded in the year 2024-25, MCX
assisted and provided consultancy services in the areas of
products, clearing and settlement, trading, warehousing,
regulatory aspects, etc. The Exchange also has 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 markets.

Product Segment Highlights
Bullion

I n pursuit of the Atmanirbhar Bharat Mission, the Multi
Commodity Exchange of India Ltd. (MCX) has embarked
upon the path of recognizing domestic bullion refiners for
good delivery of gold on Exchange platform.

Accordingly, MCX empanelled domestic refiners as per "MCX
Good Delivery Norms for BIS-Standard Gold/Silver" effective
from 06^th March, 2021, has seen a successful delivery of
10,775 kg (about ? 6,356 crore) till Gold Mini (100 gram) 05
March, 2025 Futures contract.

The Bullion segment attained various landmarks during FY
2024-25:

MCX Gold Options with Gold (1 kg) Futures as underlying
contract registered an average daily turnover of ? 22,028
crores in FY 2024-25 up by 304% from ? 5,447 crores in FY
2023-24.

MCX has introduced the modification in Gold Options
contract with Gold (1kg) futures as underlying to include
monthly expiries on 11^th November, 2024.

The performance of Gold (1kg) futures after its modification to include monthly expiries is given below:

Parameters	April-Sept 2024	Nov 11, 2024 till 31st March, 2025
Average daily turnover (ADT)	? 12,209 crores	? 38,991 crores
Average daily Volume (ADV)	16,869 kg	47,765 kg
Open interest (OI)	10,171 kg	13,047 kg

 

Bullion Options performance

Sr No	ADT (In ' Crore)	FY 2023-24	FY 2024-25 % increase / (decrease)
1	Gold	? 5,447	? 22,028	304%
2	Gold Mini	? 660	? 6,072	820%
3	Silver	? 2,586	? 6,216	140%
4	Silver Mini	? 408	? 1,532	275%
Total		? 9,101	? 35,848	294%

 

Sr No	ADV (In Kg)	FY 2023-24	FY 2024-25	% increase / (decrease)
1	Gold	8,848	27,998	216%
2	Gold Mini	1,075	7,778	624%
3	Silver	3,52,440	6,91,292	96%
4	Silver Mini	55,425	1,67,038	201%
Total		4,17,788	8,94,106	114%

 

Sr No	OI (In Kg)	FY 2023-24	FY 2024-25	% increase / (decrease)
1	Gold	6,298	11,141	77%
2	Gold Mini	653	2,010	208%
3	Silver	2,56,168	4,04,503	58%
4	Silver Mini	54,502	90,738	66%
Total		3,17,621	5,08,392	60%

 

I t is further submitted that the monthly expiry, Gold 1kg
options has clocked its highest turnover of ? 2,01,331 crores
and highest volume of 2,37,754 kg on 28^th February, 2025 and
highest open interest of 30,307 kg on 12^th March, 2025.

Gold Mini Options with Gold Mini (100 gram) Futures as
underlying registered it's highest turnover of ? 51,149 crore
and highest volume of 59,791 kg was observed on 24^th
February, 2025 and recorded highest open interest of 5,289
Kg on 23^rd December, 2024.

Silver Options with Silver (30 kg) Futures as underlying
contract registered it's highest turnover of ? 58,017 crore

and highest volume of 64,42,920 kg was observed on 25^th
November, 2024 and recorded highest open interest of
9,25,110 Kg on 12^th March, 2025.

Silver Mini Options with Silver (5 kg) Futures as underlying
contract registered it's highest turnover of ? 16,260 crore,
highest volume of 17,79,465 kg and highest open interest of
2,32,830 Kg was observed on 19^th November, 2024.

New Bullion contract launched - Gold Ten (10 gram) Futures:

Gold Ten (10 gram) Futures contract was launched on 01^st
April, 2025 and performance volumes on launch date is
tabled below:

Gold Ten (10 gram) as on 01st April, 2025

Expiry Date	Volume(Lots)	Value(in Crore)	Open Interest(Lots)
30-Apr-25	1821	? 16.55	762
30-May-25	1440	? 13.12	536
30-Jun-25	213	? 1.95	94
Total	3474	? 31.62	1392

Continued success of new product design in Bullion:

Gold Petal (The world's first deliverable 1 gram Gold Futures
contract) has seen delivery of 638 kg (6,37,717 coins) since
its launch in October 2019 till 31^st March, 2025. Gold Petal (1
gram) Futures contract registered an ADT of ? 33 crores in FY
2024-25 up by 153% from ? 13 crores in FY 2023-24.

Similarly, Silver Micro (1kg) Futures contract has seen
successful delivery of 1,70,811 kg from February 2020 series
onwards till 31^st March, 2025 and Silver Mini (5 Kg) Futures
contract has seen successful delivery of 2,94,520 kg from

June 2020 series onwards till 31^st March, 2025. Silver Mini (5
kg) and Silver Micro (1 kg) Futures contract combined has
registered an ADT of ? 3726 crores in FY 2024-25 up by 20%
from ? 3109 crores in FY 2023-24.

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 oil and gas market navigated the year with an interplay
of factors, including controlled OPEC+ supply and variable
demand, heightened geopolitical tensions, macroeconomic
weakness and a continued focus on energy transition.

The conflict between Israel and Hamas expanded to the
point where Israel and Iran exchanged direct strikes,
temporarily reigniting fears of an oil supply disruption. A
ceasefire between Israel and Hezbollah, brokered by the
U.S. and France, played a significant role in stabilizing the
situation. OPEC+ countries carefully managed production
levels to balance supply and demand. US shale producers
consolidated and remained cautious about production
growth. This collaboration helped maintain stability in global
markets.

The United States continued to lead in oil production in

2024.    By mid-year, U.S. production levels reached record
highs, reinforcing the country's position as a global energy
leader. Following U.S. President Donald Trump's victory in
the November elections, global oil markets witnessed the
impact of new US sanctions, with fears of potential supply
disruptions. The market's focus soon shifted to renewed
concerns over the world economy amid emerging trade wars
and its impact on the pace of oil demand growth. Towards
the end of the year, market again witnessed support from
OPEC+ production cuts and increased consumption during
colder months.

On the domestic front, India remains a leading refining
nation, with strong infrastructure and a global presence
in refined petroleum products. India's significant role in
global oil consumption continues to grow consistently.
India's growing population and industrialization are driving
demand for petroleum and natural gas. The government is
actively promoting domestic production, refining capacity
and infrastructure development in the Indian oil and gas
sector, while continuing its energy efficiency and transition
efforts.

MCX Energy Contracts Review

MCX Crude oil and Natural gas contracts continued their
strong performance in FY25. The crude oil and natural gas
options contracts became the most successful options
contracts globally, by achieving the number first and
second positions respectively, as per global Futures Industry
Association (FIA) ranking for 2024.

The MCX Crude oil options contracts set a benchmark by
registering highest turnover of ? 4,08,006 cr. since inception,
on 13^th January, 2025. In line the MCX Natural gas options
contracts also created a milestone by clocking highest
turnover of ? 1,21,056 cr. since inception, on 21^st February,

2025.

Keeping in line with the Exchange's objective of increasing
the efficiency of energy derivatives in Indian markets and
in its continuous endeavour to design new and innovative

products, the Exchange launched Crude oil and Natural gas
mini options contracts, on 23^rd April, 2024.

These smaller denominated options contracts were launched
to cater to the needs of the SME/ MSMEs for price risk
management and on other hand provide for ease of trading
to the retail participants. Both these contracts were well
accepted by the market participants and garnered a lot of
interest. The MCX Crude oil mini and Natural gas mini options
contracts registered an average daily turnover (ADT) of ?
1,057 cr. and ? 409 cr. respectively in FY 2024-25.

Agricultural Commodities

MCX agricultural commodities futures recorded an average
daily turnover of ' 10.32 crore in FY 2024-25 compared to
22.30 crore in FY 2023-24. The MCX Cotton contract turnover
in FY 2024-25 averaged ' 4.35 crore, compared to ' 12.39
crore in FY 2023-24. The average daily turnover of Mentha
oil contract stood at ' 5.97 crore in FY 2024-25, compared
to ' 9.91 crore in FY 2023-24. MCX launched Cottonseed
Wash Oil futures contract on 15^th October, 2024, turnover in
FY 2024-25 (October 15 to March 31) was 0.24 crore.

The suspended of Crude palm Oil (CPO) futures, initially
imposed from 20^th December, 2021, has been further
extended until 31^st March, 2026"

Base Metals

In continuous pursuit of the Atmanirbhar Bharat mission, the
Exchange 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.
One additional domestic refined lead producer, namely, Jain
Resource Recycling Private Limited was empanelled as MCX
approved brands during the FY 2024-25. This takes the total
count of approved domestic refined lead producers to 7. To
enhance the efficiency of the empanelment process, several
modifications were made to the principal document.

Ministry of Mines had issued a Quality Control Order, 2023
on 31^st August, 2023 on Aluminium and Copper. It was
implemented on 01-December-2024. Accordingly, the
Exchange modified Aluminium and Copper contracts to
reflect the change.

Exchange has reduced the staggered delivery period to 3
days effective from January 2025 expiries.

Some of the important highlights of Base Metals in the year
2024-25 are:

1.    In all, 69,384 MTs of base metals were delivered via the
Exchange settlement in FY 2024-25.

2.    The cumulative deliveries via exchange settlement
went past 4.5 Lakh MTs since the year 2019 when those
were converted to delivery settled contracts.

3.    Exchange changed the delivery centre of Steel Rebar
contract from Durgapur (West Bengal) to Kolkata (West
Bengal) effective from September 2024 expiries.

4.    Average daily OI, all metals combined for the year
was 71,612 MTs with Aluminium and Copper top
performing.

5.    Similarly, Average daily volume, all metals combined
was 70,728 MTs. Copper and Zinc Volume outperformed
in the segment.

Index Futures

The Average Daily Turnover (ADT) for FY 2024-25 for MCX
iCOMDEX Index futures was ? 10 crore. The Exchange
is reaching out to the market participants for increased
participation in the index products. The Exchange is pursuing
Options on commodity indices and have approached the
regulator for necessary approvals.

Market Participants

On the Institutional front, four Mutual Funds with six new
schemes were registered in the exchange for participation
in FY 2024-25. In the Alternative Investment Funds category,
we saw addition of four names. In FY 2024-25, 68+ FPIs
were registered and the turnover and participation was the
highest during the period.

19. REGULATORY DEVELOPMENTS- FY 2024-25

During the year under review, SEBI, has issued Master
Circulars for Stock Brokers, Master Circular on Guidelines on
Anti-Money Laundering (AML) Standards and Combating
the Financing of Terrorism (CFT), Comprehensive guidelines
for Investor Protection Fund (IPF) and Investor Services
Fund (ISF), Cybersecurity and Cyber Resilience framework
for SEBI registered entities, Guidelines for Strengthening
of Governance of Market Infrastructure Institutions (MIIs),
Comprehensive framework for System Audit for Stock Brokers
(SBs)/Trading Members (TMs), Guidelines with respect to the
list of Statutory Committees at Exchange, has prescribed
minimum criteria for the independent external evaluation
of performance of MIIs, Statutory Committees of MII and their
weightages, has amended certain clauses of Master circular
on KYC, Master Circulars for Stock Brokers, Master Circular
on Business Continuity Plan (BCP) and Disaster Recovery
(DR), has modified staggered delivery period in commodity
futures contract, timelines for submission of annual audited
accounts/net worth certificate by Stock Brokers, Investor
Charter for Stock Brokers and Exchange and eligibility
criteria for launching Options contracts on agricultural and
agri-processed commodities, has extended the timelines
for implementation of Cybersecurity and Cyber Resilience
Framework (CSCRF).

SEBI has allowed Stock Exchanges to submit preliminary and
final RCA reports of technical glitches on web-based portal
i.e. Integrated SEBI Portal for Technical Glitches (iSPOT). Also,
advised to have a uniform data sharing policy based on data

segregated/identified into 2 baskets, i.e. which can be shared
with the public and which cannot be shared with the public.

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. The framework includes, among other
elements, risk appetite statements, thresholds and metrics
to monitor the risk to the 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, etc.

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 31^st March, 2025, the RMC comprised
of three Public Interest Directors, a Non-Independent Director
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 ERM department identify areas
of risk along with functional departments and work with
departments to implement mitigation strategies.

The Chief Risk Officer (CRiO) oversees overall risk management
of the Company and submits a report to SEBI on a half-yearly
basis after presenting to RMC and the governing board.
CRiO reviews the risk registers of all functions, and also
takes into consideration the observations, if any, from audit
reports encompassing financial, operational, system, and
cyber aspects for identification of risk and in implementing
mitigation measures.

The organization provides for three lines of defence construct
where: i. the first line of defence incorporates business units
and support functions as it has the responsibility to own
and manage risks associated with day to day operational
activities. ii. the second line of defence comprises of various
oversight functions i.e., regulatory, risk management,
compliance teams, and iii. the third line of defence comprises
the internal audit function. For details relating to 'Risks and
Concerns' of your Company please refer to 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 or 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 ? 25 lakhs
per client, with no member-wise limit. As on 31^st March, 2025,
the corpus of IPF (provisional) stood at ? 28,373 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, 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
31^st March, 2025, the corpus of ISF (provisional) stood at ?
11.33 crores.

In order to enhance literacy and to promote investor
education and awareness in the commodity derivatives
market, around 2395 awareness programs (seminars/
webinars) were conducted under the banner of ISF in FY 2024¬
25. Out of these programs/webinars, over 190 programs were
Regional Investor Seminar for Awareness (RISA) (seminars/
webinars) conducted jointly with SEBI. In FY 2024-25, the
Exchange has conducted awareness programs across India,
for Investors, Students, Farmer Producer Organizations
(FPO's), Hedgers, Physical Market Participants/Stakeholders,
Micro Small And Medium Enterprises (MSME's), Corporates,
etc. from the Bullion Industries, Metal Industries, Energy
Markets and Agricultural sector.

Some major awareness initiatives in FY 2024-25
undertaken were as follows:

World Investor Week (WIW) was celebrated from 14^th October,
2024 till 20^th October, 2024 throughout India under the aegis
of SEBI & IOSCO.

•    Total over 153 awareness programs were conducted across
India during WIW, which had over 7491 participants.

•    Awareness programs across commodities were
conducted with several prominent Institutes, State and
National Universities, Trade Associations and Chambers
of Commerce by utilizing the ISF.

Awareness through Media channels:

The objective of MCX IPF is to spread mass awareness and
educate commodity market stakeholders. During FY 2024¬
25, a number of investor awareness activities were carried
through various media across (digital, electronic and print
modes).

Various Investor Awareness Media Activities carried out
during FY 2024-25:

•    '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 and were run on
various websites & languages. Subtitles and sign language
videos were super-imposed on these videos in order to
reach a broader audience.

•    Investor Awareness messages were broadcasted on radio
stations in regional languages.

•    Special investor awareness activities, including contests
on social media and amongst employees were carried out
during the World Investor Week 2024.

•    Investor Awareness messages were displayed at airports
and were run on various social media platforms.

•    Quiz cards, messages in the form of moral stories, investor
encyclopaedia, guess the word and such creatives are
posted everyday on social media.

Other Initiatives:

MCX IPF successfully organized the 7^th edition of 'MCX-IPF
COMQUEST'- 2024-25, its premier, National-level Commodity
Market Educational Quiz for students. This year, around
10000+ individual students, from over 650 institutes across
India participated in the competition, making it the largest
number amongst all previously held editions.

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 undertook the
following -

i)    Certification courses such as MCX Certified Commodity
Professional (MCCP), MCX Certified Index Professional
(MCIP) MCX Certified Commodity Options Professional
(MCOP) examination;

ii)    Introduced Joint Certification Programmes (JCP) with
various academic institutions;

i ii) Conducted Case Study competitions in partnership
with reputed B-Schools

iv)    Carried out multiple engagement programmes towards
imparting education and awareness among academia,
students covering around 200 B-Schools, Colleges, academic
bodies, etc;

v)    Conducted the VIIth edition of MCX-IPF COMQUEST All India
commodity quiz programme which saw a record number
of participation from both the academic institutions (Over
650) and their students. As part of this initiative to deepen it
further, we have carried out zonal (4) quiz programmes

vi)    Conducted awareness programmes for academic institutions
for SEBI SMART certified professionals.

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. 01^st 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
31^st March, 2025, MCXCCL has entered into agreements
with six Warehouse Service Provider (WSPs) for facilitating
physical deliveries in agricultural commodities and base
metals. As on 31^st March, 2025, MCXCCL is operating from
31 accredited warehouses of which 18 warehouses are
registered with Warehousing Development and Regulatory
Authority (WDRA). The remaining 13 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 10 accredited vaults of these agencies
located across various 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 had granted renewal
of recognition to MCXCCL to act as a Clearing Corporation
for a period of three years commencing from 31^st July 2019
and ending on 31^st July 2022 and had granted renewal of
recognition to MCXCCL, to act as a Clearing Corporation for
a period of three years commencing on 31^st July 2022 and
ending on 30^th July 2025.

SEBI vide its letter dated 16^th July 2025, has granted renewal
of recognition to MCXCCL, to act as a Clearing Corporation for
a period of further three years commencing on 31^st July 2025
and ending on 30^th July 2028, 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 Counterparty
(QCCP) by SEBI. This enables the participants to apply lower
risk weightage towards their exposures to MCXCCL as per
Basel II capital adequacy framework. It has membership
of CCP12, the renowned global association of Central
Counterparties 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 31^st March, 2025, Authorized Share Capital of MCXCCL
stood at ? 30,000 lakh and issued and paid-up share capital
stood at ? 23,999 lakh. The net worth as at 31^st March, 2025
was ? 67,145.76 lakh.

Core Settlement Guarantee Fund (Core SGF)

SEBI vide circular no. SEBI/HO/CDMRD/DRMP/CIR/2018/111
dated 11^th 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 31^st March, 2025 stood at ? 93,014 lakh, of which ? 19,263
lakh has been contributed by MCX, ? 48,353 lakh has been
contributed by MCXCCL and ? 25,398 lakh has accrued from
penalties, interest and other accruals.

25. ASSOCIATES

Countrywide Commodity Repository Limited

Your Company entered into a Shares Sale/Purchase and
Shareholders Agreement with Central Depository Services
Limited (CDSL) and Countrywide Commodity Repository
Limited (CCRL) effective 18^th May, 2018, for setting up and

operationalization of a 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. 04^th June, 2018, consequent to
investment of ? 1,200 lakh comprising of 12,000,000 equity
shares of ? 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 ? 3,000 lakh each comprising of 30,00,00,000
equity shares of ? 1 each equivalent to 20% stake in IIBH as
on 31^st March, 2025.

Additionally, MCX has contributed to IIBH ? 2,000 lakh
through rights issue on 06^th September, 2024.

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 and associate companies.

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 standalone
and 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
services 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.

Your Company was successful in upholding its commitment
towards compliance with and adherence to international
best practices. Your company has been continuously
raising the bar through effective research and product
development, intelligent use of information and technology,
innovation, thought leadership and ethical business conduct.
MCX has been certified with ISO standards, ISO 9001:2015
Quality Management System, ISO 14001:2015 Environment
Management System, ISO 22301:2019 Business Continuity
Management System and ISO/IEC 27001:2022 Information
Security Management System. As a part of its commitment to
its 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.

I t is the constant endeavour of your Company to hire
and retain the top talent. The Company has invested in
senior leadership resources and 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, on 23^rd April, 2024, your
Company launched Options contracts for Crude Oil Mini and
Natural Gas Mini Futures, followed by the launch of Futures
contracts for Cotton Seed Wash Oil on 15^th October, 2024.
The Mini contracts cater to smaller market participants, while
Cotton Seed Wash Oil Futures provides price transparency
for processors and traders. Continuing its innovative product
offerings, MCX introduced the Gold Ten Futures contract on
1^st April, 2025, which is based on 10 grams of gold, appealing
to Indian consumers and small investors. Such product-based
research were also carried out in many 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 interest
income on Investor Protection Fund (IPF) for research
activities, your Company undertook three research studies
during the year 2024-25 on various themes connected to
commodity derivatives market. The studies were 'Commodity
Options Strategies for Easing Participation of Hedgers and
Small Stakeholders' being undertaken by Birla Institute of
Management Technology (BIMTECH), 'State of Warehouse
Receipt-Based Financing in India and Path Forward', undertaken
by TransGraph Consulting Pvt. Ltd and 'Settlement Guarantee
Fund as a Risk Management Tool in Indian Commodity
Derivatives Market - Examining its Various Dimensions', being
undertaken by Indian Institute of Management Bangalore.
Further, two research studies initiated in 2023-24, was
completed during 2024-25. These are titled 'Hedging of
Price Risks in Energy Commodities', by UPES and 'Initiatives
for Achieving Atmanirbhar Bharat - Impact on Physical
Commodity Markets and Exchange Ecosystem' undertaken by
IIT Kharagpur.

Reports of completed research studies have been widely
publicized through the Exchange's website and social media
accounts and the printed copies of the reports compiled and
circulated among policy circles, educational institutions,
regulatory bodies etc. Besides, the findings of the studies are
also being disseminated through articles published in the
print media and also widely-publicized awareness events.

To raise awareness and promote research in commodity
markets and their ecosystem, your company publishes an
annual publication titled 'Commodity Insights Yearbook'.
The 2024 edition of the Yearbook was a collaborative effort
between MCX IPF and the Indian Institute of Management
Bangalore. It was released by Shri G.P. Garg, Executive Director
of SEBI, during a knowledge-sharing session on 16^th October,
2024. This Yearbook is a compilation of research articles and
valuable data on commodity markets and the 2024 edition
specifically focused on articles centered around the theme of
'Enhancing Participation in the Commodity Derivatives Market.,
The Yearbook along with relevant data in user-friendly
spreadsheets have been made available for free download
on the Exchange's website to ensure maximum accessibility.
Copies of the Yearbook have also been widely distributed
among academicians, libraries, and other stakeholders.

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 year 2024-25, your Company also engaged
with a number of educational institutions and participated
in research conferences conducted by institutions and
associations such as India Gold Policy Centre at IIM
Ahmedabad, The Indian Econometric Society (TIES),
International Conference on Financial Markets and Corporate
Finance (annual pan-IITs research conference), India Finance
Conference (annual pan-IIMs research conference), apart

from conducting and participating in training and awareness
sessions at a number of educational institutions across the
country.

As part of the Exchange's initiatives at creating and spreading
knowledge for orderly functioning and development of
the securities market, your Company has been providing
calculated values for some commodities on a daily basis to
an Asset Management Company (AMC), which forms part of
a benchmark index created and tracked by the AMC.

29.    ENVIRONMENTAL RESPONSIBILITY

Your Company believes in climate friendly business practices
and focussed sustainability initiatives. Your company has
adopted an Environmental Policy. It utilises the resources
in an effective manner and focuses on energy efficient
equipment with longer durable life to drive its business.

Your company is highly dependent on Information
Technology. To maintain its productivity and sustainable
performance it carries out regular maintenance along
with software and storage upgrades. The IT infra is built on
scalable model where the services can be expanded without
replacing the infra through higher upgrade.

Your company encourages online meeting as much as
possible and limit physical travel as it is aware of carbon
footprints left behind through Business travels.

Your company manages its waste through environmental
best practise on the principle of Reuse, reduce and recover.
Your company has E-Waste policy for disposal of E-waste
through recyclers to avoid any e-waste going to the land fill.

Your company has adopted resource conservation through
efficient use of water by introducing tap aerators and
rainwater harvesting.

Your company has implemented password enabled printers
to reduce paper waste.

Your company checks its emission by implementing Retro
Emission Control Device (RECD) on Diesel generators to trap
particulate matter (PM) from escaping in the environment
promoting environmental healthy practices.

Your company checks the environmental pollution through
stack emission, Noise Pollution & Air quality checks.

30.    CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with Section 135 of the Companies Act, the
Company has established a CSR Committee. Operating
under its CSR policy, the Company remains committed to
contributing meaningfully to societal development. It aims to
deliver impactful support through initiatives that addresses
key community needs and are implemented in collaboration
with local stakeholders.

The CSR strategy is regularly reviewed to ensure alignment
with the Company's objective, with ongoing monitoring to
assess the effectiveness and outcomes of various programs.
The Company emphasizes sustainable, inclusive growth by
focussing on diverse initiatives designed to enhance the well¬
being of communities.

For the FY 2024-25, a CSR budget of ? 212.38 lakhs was
allocated. Specific allocations have been made toward the
following projects:

•    Providing support for the construction of single floor of a
seven-story school building with furniture, smart board,
computer and hardware for the underprivileged and HIV¬
positive children for their education.

•    Providing contribution towards the support of athletes
training preparing for Olympics/ Paralympics 2028,
specially within the sport of Shooting.

•    Providing support for installation of sustainable
community based safe drinking water platform i.e.,
Community Water Centres, at 3 villages near Jaipur
in Rajasthan.

•    Providing sustainable and affordable energy solutions
(solar off grid system) for street lighting, Schools and
Anganwadi in few villages in Maharashtra.

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 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 2024-25, 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,
Code of Practices and Procedures for Fair Disclosures of
Unpublished Price Sensitive Information, Code of Conduct
for Prevention of Insider Trading, 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.    POLICY ON NOMINATION AND REMUNERATION
PARTICULARS OF REMUNERATION

Your Company has adopted a well-defined Nomination
& Remuneration Policy for Directors, Key Managerial
Personnel 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/
investor-relations/corporate-governance

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 III.

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 IV.

B.    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, Regulation 22 of the SEBI (LODR)
Regulations, 2015 and SEBI circular ref. No. SEBI/HO/
MRD/POD3/P/CIR/2024/162 dated 22^nd November,
2024, 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.

C.    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 2024-25, 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 V 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

D.    INSIDER TRADING REGULATIONS

Pursuant to the provisions of SEBI (Prohibition of
Insider Trading) Regulations, 2015, 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-governance

E.    CONTRACTS AND ARRANGEMENTS WITH RELATED
PARTIES

Pursuant to the provisions of Regulation 23 of the SEBI
(LODR) Regulations, 2015, 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 ?
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. 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 available on the website of
the Company at https://www.mcxindia.com/investor-
relations/agm-fy-2024-25

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/investor-relations/corporate-governance

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.

F.    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/investor-
relations/corporate-governance.

G.    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.

33. STATUTORY AUDITORS AND THEIR REPORT

The shareholders, at their 18^th Annual General Meeting (AGM)
held on 31^st August, 2020 had appointed M/s Shah Gupta &
Co., Chartered Accountants (Firm Registration No. 109574W)

for a term of 5 (five) consecutive years to hold office from
the conclusion of the 18^th AGM until the conclusion of the
23^rd AGM of the Company, at a remuneration of ? 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 04^th February,
2023, 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 ? 15,90,000/- for each year (plus
reimbursement of out-of-pocket expenses and applicable
taxes). The Audit Committee and Board in its meeting held
on 27^th July, 2024, recommended an increase of 10% in the
statutory audit fees of M/s Shah Gupta & Co. for the FY 2024¬
25 amounting to ? 17,49,000/- (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. During the year, the Auditors have not
reported any fraud to the Audit Committee or the Board.

The Board of Directors at their meeting held on 08^th May,
2025 based on the recommendations of Audit Committee,
approved the appointment of M/s. V Sankar Aiyar & Co.
(FRN: 109208W) as Statutory Auditor and Tax auditor for
the tenure of 5 years, from the 23^rd Annual General Meeting
till the conclusion of 28^th Annual General Meeting subject
to approval of shareholders at the ensuing Annual General
Meeting.

34. SECRETARIAL AUDITORS AND THEIR REPORT

M/s. AVS & Associates, Practicing Company Secretaries (FRN:
P2016MH054900), were appointed as the Secretarial Auditors
by the Board to conduct the secretarial audit of the Company
for FY 2024-25. 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 FY 2024-25.

I n 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 31^st March, 2025 are
annexed as Annexure V to this Report. The Secretarial Audit
Report does not contain any qualifications, reservations, or
adverse remarks. The Board of Directors at their meeting
held on 08^th May, 2025, based on the recommendations
of Audit Committee, approved the appointment of M/s
AVS & Associates, Practicing Company Secretaries, (FRN:
P2016MH54900) as Secretarial Auditors of the Company
for a term of 5 years from FY 2025-26 till FY 2029-30 subject
to approval of shareholders at the ensuing Annual General
Meeting.

35.    INTERNAL AUDITOR

I nternal Audit for the year ended 31^st March, 2025, was
conducted by M/s Mittal & Associates, Chartered Accountants.
Internal Audit report at periodic intervals were placed before
the Audit Committee and the Board.

36.    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.

37.    COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has devised proper systems to ensure
compliance with the provisions of all applicable Secretarial
Standards ("SS") issued by the Institute of Company
Secretaries of India and that such systems are adequate
and operating effectively. During the year under review, the
Company has complied with the Secretarial Standards i.e.
SS-1 and SS-2 relating to "Meetings of the Board of Directors"
and "General Meetings", respectively.

38.    ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, the
Annual Return in form MGT-7 for FY 2024-25 is available at
the web link https://www.mcxindia.com/investor-relations

39.    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 31^st March, 2025.

40.    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.

41.    LEGAL UPDATE

Crude Oil Matters:

Crude Oil contracts were launched by MCX on 22^nd October,
2019, which expired on 20^th April, 2020. As per contract
specifications, the Crude oil contracts are always settled
as per the NYMEX WTI Crude oil contract settlement price
converted into Indian rupees on the last trading day. On 20^th
April, 2020, the Crude oil futures contract traded on NYMEX
that was due on 21^st April, 2020, fell into negative territory

i.e. negative $ 37.63 due to the fall in demand on account
of the unprecedented COVID-19 pandemic. Accordingly,
vide Circular dated 21^st April, 2020, the Due Date Rate (DDR)
of Crude Oil Contracts futures expiring on 20^th April, 2020
was fixed at a negative value of Rs. (-) 2884/- per barrel. This
resulted in multiple Writ Petitions being filed against MCX
and MCXCCL in various High Courts wherein It was inter-alia
prayed to quash and set aside the Impugned Circular dated
21^st April 2020.

All the writ petitions filed before various High Courts were
transferred to Hon'ble Bombay High Court and clubbed.
The matter is in the final stages and is likely to be listed on
September 03, 2025. In two other Writs, SEBI had in January
2023 filed Transfer Petition before the Supreme Court out of
which one has been transferred, and the other one remains.

42.    HUMAN RESOURCE DEVELOPMENT

Human Resources 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 31^st March, 2025, the Exchange had 456 employees
(includes 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", Family Day, celebrations of
various festivals designed to have enhanced interpersonal
relationship and team work.

43.    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 has 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 2024- 25 in relation
thereto. Details are provided below:

(a)    number of complaints of sexual harassment received in
the year: 0 complaints

(b)    number of complaints disposed off during the year; and
- NA

(c)    number of cases pending for more than ninety days.-
NA

The Company has complied to the provisions relating to the
Maternity Benefits Act 1961 in FY 24-25.

44.    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 27^th 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 31^st
March, 2025.

There were no grants pending for vesting as at 31^st March,
2025. No new grants were made during FY 2024-25.

The relevant disclosures required under the SEBI Regulations
for the year ended 31^st March, 2025 are available on the
website of the Company at https://www.mcxindia.com/
investor-relations/corporate-governance

45. 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 drives its business though effective
energy utilisation. Your company has taken various
measures viz. using energy-efficient equipment for its
business and sustainable growth. Your company always
strives towards new technologies and techniques to
make its infrastructure more energy efficient.

i. Steps taken or impact on Conservation of
Energy:

Your Company has Precision Air cooling system
for Rack servers in the Data Centre, which are
efficient in power saving and have Variable
Frequency device (VFD) coupled with linear scroll
compressors which favors low drive proportional
power during low power requirement. Moreover,
the system 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
in the Server Racks.

Your Company has 7^th Gen Variable Refrigerant
Volume (VRV) air-conditioning system for
the entire building, which works on invertor
compressor i.e during less occupancy the
compressor drive have less rotations resulting in
low energy consumption and promoting power
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 load on air-conditioning
system to cool the office. The glass windows also
reduce the electricity consumption due to lesser
requirement of lighting during the day.

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 ASHRAE
(American Society of Heating, Refrigerating
and Air Conditioning Engineers) guidelines for
Airconditioning and maintains the temperature
at 24 degrees in work areas.

Your 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 unnecessary printing of papers and
waste of energy.

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 old Air Conditioning
with the 7^th Gen VRV Air conditioning system
which is highly energy efficient compared to
earlier generation Acs.

B) TECHNOLOGY ABSORPTION

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
were 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 security technologies and 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 27001:2022 Information Security
Management & aligns with NIST Cyber Security
Framework.

Your Company is not only committed to the 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¬
premises 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 the 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. Un-announced live trading was
carried out in the month of August 2024 and December
2024.

Your Company ensured that staff members working
at DRS run 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, with an objective to put in place
measures to restore operations of critical systems within
stipulated Recovery Time Objective (RTO), streamlining
communication protocols, identifying broad scenarios
of disaster, escalation hierarchy among others.

Upgrading Information Technology Systems

Your Company has continued to allocate substantial
resources towards upgrading information technology
systems. Our overarching goal remains achieving higher
capacity, lower latency, improved market efficiency and

transparency, enhanced user access, and providing
flexibility for future business growth and market needs.

Strong Technology Framework

MCX's technology infrastructure is the foundation of
our business and a key contributor to the Exchange's
functioning and development. Our trading platform,
mission-critical applications, and supporting
infrastructure are hosted in a state of the art Data
Centre at our headquarters in Mumbai and replicated
at a Near Site and at a Disaster Recovery site in Gift City
- Gandhinagar.

Our electronic platform is supported by our
infrastructure and advanced technology, allowing
fast trade execution, with uptimes exceeding 99.9%
since inception, low latency, anonymity between
counterparties, price transparency, prompt and reliable
order routing, trade reporting, multicast tick-by-tick
market data dissemination and market surveillance.
The platform is built on state-of-the-art storage-
based technology, using Non-Volatile Memory Express
(NVME) technology, one of the fastest storages in the
world. This positions MCX as one of the first to deploy
such technology, providing a competitive edge.

(i) The benefits derived like product improvement,
cost reduction and product development:

During FY 2024-25, 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 laid special
focus on automation to drive efficiency, scalability
and innovation.

In the fiscal year 2024-25, the Company's internal
software development team initiated several
key projects to augment and deploy a range of
ancillary systems in alignment with organizational
needs and in compliance with SEBI's regulations
and deadlines. Notable among these initiatives
were: 1) Enhancing the surveillance system's
architecture and optimization, which led to
a threefold increase in message processing
capacity. 2) Upgrading outdated technology in
legacy applications to remain current and reduce
the risk of cyber threats.

 

(ii) 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.

(i) 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. 33 of
Notes to Accounts of the standalone and consolidated
financial statements.

46.    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.

47.    RESOURCES COMMITTED TOWARDS
STRENGTHENING REGULATORY FUNCTIONS
AND TOWARDS ENSURING COMPLIANCE WITH
APPLICABLE REGULATORY REQUIREMENTS

The Company being a recognised Stock Exchange is governed
by SEBI. The Company ensures compliances with various
regulations and guidelines issued by SEBI from time to time
and strives to implement the best governance practices.

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.

During the year under review, the Company's regulatory
division comprised of departments, handling various critical
aspects of regulatory compliances, as under:

1.    CRO's Office

2.    Inspection & Audit

3.    Investor Protection Fund

4.    Investor Services Department

5.    Membership

6.    Surveillance & Investigation

7.    Secretarial & Compliance

8.    Enterprise Risk Management

As on 31^st March, 2025, the Company had 112 employees
in the overall regulatory function. The Company has
dedicated resources to manage the various regulatory
functions.

The Company has ensured to make disclosures of
various mandatory regulatory requirements along with
reporting of the same to various regulatory authorities
in addition to informing the same to the Board of
Directors and respective Committee.

For the FY ended on 31^st March, 2025, the total cost
(Fixed pay) incurred by the Exchange towards these
functions was ' 17.37 crore MCX incurred direct and
indirect expenses including technology expenses
amounting ' 39.45 crore as per activity-based
accounting methodology towards strengthening
regulatory functions and towards ensuring compliance
with regulatory requirements.

48. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134 of the Companies

Act, 2013, your Directors confirm that:

a)    i n the preparation of the annual accounts for the
financial year ended 31^st March, 2025, the applicable
accounting standards had been followed along with
proper explanation relating to 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 31^st
March, 2025 and of the profit of the Company for the
year ended 31^st March, 2025;

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)    t hey 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.

49.    THE DETAILS OF APPLICATION MADE OR ANY
PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016 DURING THEZ
YEAR ALONG WITH THEIR STATUS AS AT THE END
OF THE FINANCIAL YEAR.

In a matter dated October 2018, pertaining to a defaulting
member, Exchange had filed an application under u/s9
IBC, 2016 for initiation of CIRP for the recovery of the dues
towards the Investor Protection fund and Exchange dues.
However, vide the NCLT Allahabad Order dated 13^th August,
2021, the matter was dismissed. Subsequently, MCX has
filed restoration in the matter consequently, the matter
was restored vide the Order dated 02 April, 2025. Further,
the Tribunal has also directed the opposite party to file its
response.

50.    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.

51. 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

Praveena Rai    Harsh Kumar Bhanwala

MD & CEO    Chairman & Public Interest Director

(DIN: 09474203)    (DIN: 06417704)

Mumbai    Mumbai

02^nd June, 2025    02^nd June, 2025

---

Mar 31, 2024

The Board of Directors present the Twenty Second Annual Report of your Company, along with the Audited Financial Statement of Accounts for the Financial Year (FY) ended 31^st March 2024.

1. STATE OF COMPANY’S AFFAIRS FINANCIAL RESULTS

The Company’s financial performance for the Financial Year (FY) ended 31^st March 2024 is summarized below:

(' in lakh, except EPS)
Particulars	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Total Income	67,124	52,147	75,894	58,117
Total Operating Expenditure	56,601	32,947	61,924	36,382
Profit before Interest, depreciation, exceptional items and tax	10,523	19,200	13,970	21,735
Less: Depreciation	3,439	2,047	3,593	2,159
Less: Interest	23	18	27	21
Less: Exceptional item	-	-	-	-
Add / (Less): Share of loss of Associate	-	-	(152)	(498)
Profit after exceptional items and Share of Profit / (loss) of Associate but before tax	7,061	17,135	10,198	19,057
Less: Provision for tax	1,865	4,152	1,887	4,160
Profit after tax	5,196	12,983	8,311	14,897
Add/(Less): Other Comprehensive Income (net of tax)	(11)	(69)	(151)	96
Total Comprehensive Income for the period (Comprising Profit and Other Comprehensive Income for the period)	5,185	12,914	8,160	14,993
Earnings per share (EPS)	Â	Â	Â	Â
i. Basic (?)	10.19	25.51	16.30	29.27
ii. Diluted (?)	10.19	25.51	16.30	29.27

FINANCIAL HIGHLIGHTS

For FY 2023-24, your Company’s (Standalone) total income stood at ' 67,124 lakh as compared to ' 52,147 lakh in FY 2022-23. The operating income during the year under review was ' 58,616 lakh as against ' 44,922 lakh in FY 2022-23. Net profit after tax in FY 2023-24 was ' 5,196 lakh as compared to ' 12,983 lakh in FY 2022-23.

The net worth of the Company as at 31^st March 2024 stood at ' 1,55,019 lakh as compared to ' 1,59,570 lakh as at 31^st March 2023.

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 30^th September 2022.

However, since the new platform was under development, the Company considering the exigency to ensure continuity of the commodity trading and clearing platform, continued with the services of the vendor, 63 Moons Technologies Ltd., initially for a period for quarter ended December 2022 for f 6,000 lakh (plus applicable taxes). Accordingly, for the quarter ended 31^st December 2022, Company had incurred f 4,020 lakh (net of recoveries from MCXCCL, excluding applicable taxes). Later, these services were extended for another two quarters ending 30^th June 2023, for f 8,100 lakh per quarter (plus applicable taxes) as per the minimum period of services offered by the vendor. Accordingly, for the quarter ended 31^st March 2023, and 30^th June 2023, Company has incurred f 5,427 lakh (net of recoveries from MCXCCL, excluding applicable taxes) each.

Further, due to delay in the delivery of the CDP platform, the Company had decided to extend the support services being rendered by the vendor, 63 Moons Technologies Ltd. for further two quarters, being the minimum period of services offered by the vendor, beginning from 01^st July 2023, at a consideration of f 12,500 lakh (plus applicable taxes) per quarter. Accordingly, for the quarter ended 30^th September 2023, Company has incurred f 8,375 lakh (net of recoveries from MCXCCL excluding applicable taxes) and for the quarter ended 31^st December 2023, has incurred f 11,827 lakh (net of recoveries from MCXCCL, excluding applicable taxes only till 15^th October 2023, on “pay for use basis” as per the existing resources sharing agreement).

TCS has completed development of CDP and the Company has gone live with CDP with effect from 16^th October 2023 after requisite approvals.

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. 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 2023-24, the Average Daily Turnover (ADT) of commodity futures contracts stood at ' 19,636 crore vis-a-vis ' 23,514 crore in FY 2022-23, witnessing a decline of 16.5%. However, during the same period, the options notional ADT went up by 162% to ' 89,244 crore from ' 33,998 crore. The Average Realization Rate (ARR) for the futures stood at ' 2.10 per Lakh vis-a-vis ' 2.07 per lakh (each side) during the previous year. Overall traded Unique Client Codes for futures and options (UCC - PAN based) during the period increased to 9.3 lakh from 6.2 lakh in the previous year.

The total turnover of commodity futures traded on your Exchange declined by 17% to ' 49.88 lakh crore in FY 2023-24 as against ' 60.43 lakh crore in FY 2022-23. In contrast, options turnover for the year went up by 159% to a record total turnover of ' 226.68 lakh crore as against ' 87.37 lakh crore in the previous year. The futures in bullion, energy, metals and agriculture registered a turnover of ' 31.11 lakh crore, ' 13.82 lakh crore, ' 4.80 lakh crore and ' 0.06 lakh crore, respectively, as against ' 28.20 lakh crore, ' 22.30 lakh crore, ' 9.50 lakh crore and ' 0.21 lakh crore in the previous year. On the other hand, options turnover in energy, bullion and metals recorded total of ' 203.43 lakh crore, ' 23.21 lakh crore and ' 0.05 lakh crore, respectively, during FY 2023-24 vis-a-vis ' 81.92 lakh crore, ' 5.45 lakh crore and ' 0.01 lakh crore , in the previous year.

In terms of metal delivery, a total of 94,036 metric tonnes (MT) of Base Metals were delivered through the exchange mechanism during FY 2023-24 as against 83,747 metric tonnes in FY 2022-23. During FY 2023-24, your Company’s market share in commodity futures market stood at 95.9% as against 96.8% in the previous year. The volume of futures (in terms of contracts) traded on the Exchange increased by 5% in FY 2023-24, to 135.3 million lots, as compared to 128.8 million lots in FY 2022-23. On the other hand, the volume of Options (in terms of contracts) traded increased by 207% in FY 2023-24, to 381.4 million lots, as compared to 124.2 million lots in FY 2022-23.

In the calendar year 2023, the global commodity market underwent significant changes driven by economic recovery, geopolitical tensions, and environmental factors. Among Metals, gold futures reached a record high, delivering strong annual returns and silver futures also posted gains. However, Base Metals prices remained under pressure due to rising interest rates, with nickel experiencing the steepest decline, while copper prices showed a slight increase by the end of the year. In the Energy sector, both crude oil and natural gas prices concluded the year with notable declines. Among agricultural commodities, most prices, including those for cotton, soybean and wheat remained lower during 2023 compared to 2022 prices.

CME gold futures ended 2023 at $2,071.8 per ounce, a record high with a 12.46 % annual return. Silver futures averaged $24.12, a 7.5 % increase over 2022. Base metals struggled with rising interest rates; nickel saw the most significant decline. LME Copper 3M prices closed near $8,559 per metric ton, slightly up, but the average 2023 copper price was 1.7 % lower than the average 2022 price. LME Aluminium 3M and LME Zinc 3M prices dropped significantly, with nickel declining by 44.75 %. CME WTI crude oil prices ended at $71.65 per barrel, a 10.96 % decrease, with an average 2023 price down 17 % from 2022. Natural gas prices saw a substantial drop, with CME US Natural Gas Future prices ending at $2.51 per MMBtu, down 43.82 %. In agricultural commodities, ICE US Cotton Future prices saw a modest decrease, while ICE US Coffee Future prices increased notably. However, the average 2023 coffee price was lower than in 2022. ICE Cocoa Futures prices increased significantly in 2023 but remained lower on average than the previous year. CBOT US Wheat and Soybean Future prices dropped, with wheat down 20.71 % and soybeans down 15.12 % from the previous year, highlighting the varied dynamics shaping the 2023 commodity markets.

In 2023, the global commodity derivatives markets saw an increase in trading volumes across all segments, with energy leading the way, followed by agriculture, precious metals, and non-precious metals. According to the Futures Industry Association (FIA), total volumes in these segments rose by 26.6% year-on-year, reaching 8.4 billion contracts in 2023. Specifically, trade volumes in the energy segment increased by 34.2%, while volumes in agriculture, precious metals, and non-precious metals rose by 30.6%, 27.1%, and 11%, respectively.

The global economy has shown remarkable resilience in recent years, with major economies weathering challenges such as rising interest rates and external factors like the war in Ukraine. Efforts to rein in global inflation have been effective without causing a recession, leading to hopes for a stable economic scenario. According to the International Monetary Fund (IMF), global growth is projected to remain stable at around 3.2 % for both 2024 and 2025, with decreasing inflation. India’s economy is expected to maintain robust growth rates of 6.8 % in 2024 and 6.5 % in 2025, driven by sustained domestic demand and a growing working-age population.

Your Company’s performance during the FY 2023-24 and outlook during FY 2024-25 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 31^st March 2024, the paid-up share capital of your Company stood at ' 5,099.84 lakh comprising of 50998369 Equity shares of ' 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

The Company was not required to transfer any amount of profits to general reserves for FY 2023-24, pursuant to the provisions of Companies Act, 2013.

5.    SURPLUS IN PROFIT & LOSS ACCOUNT

An amount of ' 1,15,875 lakh (Previous Year ' 1,20,415 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 23^rd April 2024, have recommended a dividend of ' 7.64 (76%) per equity share on a face value of ' 10 per share for the Financial Year ended 31^st March 2024, subject to the approval of shareholders at the ensuing Annual General Meeting.

The said dividend is in line with the Dividend Distribution Policy of the Company.

The outgo on account of the proposed dividend of 76% (Previous Year 191%) to be paid by the Company aggregates to approximately ' 3,896 lakh, being a payout of 75% of the profit after tax (PAT) for the year ended 31^st March 2024, as against ' 9,736 lakh during the previous year.

Your Directors’ have recommended 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 22^nd AGM.

7.    MEMORANDUM AND ARTICLES OF ASSOCIATION

During the year under review, there has been no change in the Memorandum of Association (’MOA’) and Articles of Association (’AOA’) of the Company.

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.    EVENT OCCURED FROM THE END OF THE FINANCIAL YEAR TILL THE DATE OF THIS REPORT

The Company had received a letter dated 26^th April 2024, issued by SEBI wherein it was advised to pay the regulatory fees on the ‘Annual Turnover’ considering notional value in case of option contracts from the FY 2006-07 onwards, with interest at the rate of 15% per annum. Accordingly, the Exchange has incurred expenditure amounting to ' 450 lakhs including interest (plus applicable taxes) towards the differential amount.

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the FY 2023-24 to which the financial statement relate and the date of this Report.

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

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.

SEBI issued a Show Cause Notice (‘SCN’) dated 16^th October, 2023 to MCX, four of its Key Management Personnel (‘KMPs’), it’s subsidiary i.e. Multi Commodity Exchange Clearing Corporation Limited (‘MCXCCL’) and one of the subsidiary’s KMP. The SCN, inter alia, alleges that the management of both MCX and MCXCCL failed to implement the SEBI circular dated 13^th September, 2017 on outsourcing of activities. MCX, MCXCCL and the concerned KMP’s have filed their responses to the matter. The matter was heard by SEBI and the Regulator opined that in the event the settlement application filed by the Noticees is rejected, another hearing may be scheduled. MCX and MCXCCL have also submitted a settlement applications for an Indicative Amount (IA) for settlement of Rupees Twenty-Five Lakhs (Rs.19 Lakhs for MCX and ' 6 Lakhs for MCXCCL). The Exchange has made a provision for the same. The Internal Committee (IC) of SEBI advised to re-compute the IA. Accordingly, a revised IA of Rs. One Crore Thirty Seven Lakh Eight Thousand was proposed to IC. Subsequently, the IC suggested an IA, which was much higher than the IA submitted by the Exchange. Accordingly, the Exchange may consider to submit Revised Settlement Term.

During the audit period, SEBI issued various advisory, deficiency, and warning letters to the Company, advising corrective actions regarding operations, technology, and compliance matters. No fines or penalties were imposed on the Company in connection with these letters. Therefore, these instances are not covered in this report.

During the audit period, the Company has paid a compounding fee of ' 4,50,000/- to RBI as per the order dated 25^th January 2024 in the matter of contravention under Regulation 16(i)(vi) read with Regulation 16 (3) of FEMA 120, where the Company divested from its overseas Joint Venture through the automatic route and did not seek prior approval from the RBI for the sale of 500 shares in the Dubai Gold Exchange in the year 2018.

10. INVESTOR EDUCATION AND PROTECTION FUNDTRANSFER 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 2015-16	' 6.5/-	19th September 2016	17th November 2023	' 3,79,002/-

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, 1496 equity shares of ' 10/- each on which the dividend remained unpaid or unclaimed for last seven consecutive years with reference to the due date of 24^th November 2023, were transferred during the FY 2023-24 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 encashed 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: [e-mail]

The Company has transferred the following unclaimed dividend amount and shares to IEPF till 31^st March 2024:

Sr. No	Year	No. of shares transferred to IEPF	Category amount transferred to IEPF	Amount transferred to IEPF (in ')
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.	2015-16 Final	1496	Unclaimed Dividend	3,79,002
9.	-	-	IPO Refund	26,55,276
Â	Total	4761	Â	71,46,247

Year wise amount of Unpaid/Unclaimed Dividend lying in the unpaid account upto 31st March 2024, 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 2024	Due Date of transfer of Unpaid and Unclaimed Dividend to IEPF
1.	15th AGM Final Dividend 2016-17 held on 22nd August 2017	3113	52977	' 794655/-	27th October 2024
2.	16th AGM Final Dividend 2017-18 held on 31st August 2018	3295	60727	' 1032359/-	05th November 2025
3.	17th AGM Final Dividend 2018-19 held on 20th September 2019	2547	52152	' 1043040/-	25th November 2026
4.	18th AGM Final Dividend 2019-20 held on 31st August 2020	3945	81440	' 2365736/-	05th November 2027
5.	19th AGM Final Dividend 2020-21 held on 03rd September 2021	2165	42291	' 1116043/-	08th October 2028
6.	20th AGM Final Dividend 2021-22 held on 27th September 2022	1755	39918	' 656843/-	01st December 2029
7.	21st AGM Final Dividend 2022-23 held on 26th September 2023	1293	26393	' 477196/-	30th November 2030
*The unclaimed and unpaid amount as on the due date will be transferred with 30 days.

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 31^st March 2024.

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 31^st March 2024, 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 FY 2023-24, 18 (Eighteen) 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 27^th July 2023 and 15^th December 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 31^st March 2024, the Board comprised of 9 (nine) Directors, of which 5 (five) were Public Interest Directors (PID)/Independent Directors, 3 (three) were 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. 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 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 in accordance with the SECC Regulations, 2018, SEBI (LODR) Regulations, 2015 from all the Directors, as applicable to them.

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, Mr. Ved Prakash Chaturvedi (DIN: 00030839) vide his letter dated 11^th August 2023 has tendered his resignation as Non-Executive- Independent Director/Public Interest Director of the Company with effect from 11^th 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. Hemang Raja (DIN: 00040769), Non-Independent Director (NID) of the Company, was liable to retire by rotation at the 21^st Annual General Meeting (“AGM”) held on 26^th September 2023. Accordingly, shareholders at their 21^st Annual General Meeting approved the re-appointment of Mr. Hemang Raja as NID of the Company. His re-appointment was subject to regulatory approval. In the meantime, Mr. Hemang Raja has withdrawn his re-appointment as NID due to personal reasons. Accordingly, Mr. Raja retired as NID of the Company on 26^th September 2023.

During the year under review, Mr. Shankar Aggarwal (DIN: 02116442) completed his second term as Public Interest Director of the Company on 30^th September 2023.

On account of the superannuation of Mr. Vivek Krishna Sinha (DIN: 08667163) from the services of NABARD, he has tendered his resignation from the position of NID of the Company with effect from 31^st October 2023.

Further, NABARD had nominated Ms. Suparna Tandon (DIN: 08429718), CGM, NABARD to be appointed as NID on the Board of MCX. Shareholders of the Company at its 21^st AGM held on 26^th September 2023 had approved the appointment of Ms. Suparna Tandon as a NID on the Board of the Company, subject to approval of SEBI. Thereafter, with approval of SEBI vide letter dated 15^th December 2023, Ms. Tandon was appointed as NID with effect from 15^th December 2023. Ms. Tandon, vide her email dated 21^st July 2024 has tendered her resignation as Non-Executive, NID of the Company pursuant to her voluntary retirement with effect from 19^th July 2024, from the services of NABARD. Accordingly, Ms. Tandon ceased to be NID of the Company with effect from 19^th July 2024.

The first term of Mr. C S Verma (DIN: 00121756) was due for completion on 21^st May 2024. Accordingly, upon the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, SEBI vide letter dated 12^th March 2024 has approved the re-appointment of Mr. C S Verma and appointment of Dr. Navrang Saini (DIN: 09650867) as Public Interest Directors of the Company. The Board of Directors had approved the re-appointment of Mr. C S Verma as PID for further period of 3 years with effect from 22^nd May 2024 and appointment of Dr. Navrang Saini as PID for 3 years with effect from 14^th March 2024.

The tenure of Mr. P.S. Reddy (DIN: 01064530) as Managing Director and Chief Executive Officer (MD & CEO) of MCX was completed on 09^th May 2024. Accordingly, he retired from the position of MD & CEO of the Company with effect from closure of business hours on 09^th May 2024.

In this regard, the Board of Directors had approved an interim arrangement by constituting an Executive Committee (“EC”) comprising of senior officials namely, Chief Operating Officer, Chief Business Officer, Chief Technology Officer and Chief Regulatory Officer. The EC was made effective from 10^th May 2024 and has been delegated with necessary powers to discharge the day-to-day operations of the Exchange till appointment of the new MD & CEO. The COO has been nominated as the Coordinating Officer.

Dr. Harsh Kumar Bhanwala (DIN: 06417704) will be completing his first term as Public Interest Director (PID) on 07^th August 2024. In this regard, upon the recommendation of the NRC and the Board of Directors, SEBI has vide its letter dated 24^th June 2024, approved the re-appointment of Dr. Harsh Kumar Bhanwala as PID on the Governing Board of the Company. Accordingly, the Board of Directors had approved Dr. Bhanwala’s re-appointment for a period of further 3 years with effect from 08^th August 2024.

The Board of Directors places on record their earnest appreciation to the invaluable contribution, leadership and guidance extended by Mr. Shankar Aggarwal, Mr. Hemang Raja, Mr. Vivek Sinha, Mr. Ved Prakash Chaturvedi, Ms. Suparna Tandon and Mr. P. S Reddy to the Board and the Management of the Company during their association.

In accordance with the provisions of the Companies Act, 2013, Mr. Mohan Shenoi (DIN:01603606), NID, 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.

The first term of Mr. P.S. Reddy as MD and CEO completed on 09^th May, 2024. The Company initiated the process for selection of candidates for the position of MD & CEO of the Exchange in November 2023 and published an advertisement in the newspapers. Mr. Anup Wadhawan was inducted in the NRC for limited purpose of MD & CEO selection as per the SEBI approval dated 08^th December 2023. The Exchange recommended two names and the compensation payable, to the SEBI vide application dated 14^th February 2024, for its consideration. SEBI vide letter dated 22^nd March 2024, directed to the redo the process of MD & CEO selection.

In this regard, as advised by SEBI, the process for selection was reinitiated and Korn Ferry (Executive Search Firm) was appointed to handle the MD & CEO search mandate. To redo the selection, the newspaper advertisement inviting applications for the post of MD & CEO was once again published on 30^th April 2024. The Exchange after following due process and as per the recommendation of the NRC and Board vide respective meetings dated 05^th July 2024, recommended to the SEBI two names and the compensation payable, vide application dated 10^th July 2024, for its consideration.

SEBI vide its letter dated 08^th August 2024, approved the name of Ms. Praveena Rai as MD & CEO of the Company for a period of five years, which shall be effective from the date of her joining. Further, the Exchange shall ensure that the compensation paid to Ms. Praveena Rai (DIN: 09474203) is in accordance with Regulation 27 of SECC Regulations, 2018.

The NRC and the Board at its meeting held on 10^th August 2024, approved the appointment, terms and conditions including remuneration of Ms. Praveena Rai as MD & CEO of the Company, subject to the approval by the Shareholders. Accordingly, approval of the shareholders has been requested through a special resolution in the Notice for the Annual General Meeting.

15.    INDEPENDENT EXTERNAL EXPERT

The Independent External Experts are appointed for a period of three years, with further extension of three years subject to performance evaluation in accordance with SECC Regulations, 2018. Further, internal performance evaluation of Independent External Experts are carried out annually.

16.    KEY MANAGERIAL PERSONNEL (KMP)

The following employees became KMPs under the SECC Regulations, 2018 during FY 2023-24:

Sr. No.	Name	Effective Date
1	Mr. Abhishek Suresh Govilkar	21st June 2023
2	Mr. Chirag Aspi Sodawaterwalla	28th August 2023
3	Mr. Naresh Bhuta	1st November 2023
4	Ms. Kavita Ravichandran	10th November 2023
5	Mr. Mithun Manjnath Nayak	01st December 2023
6	Mr. Harvinder Singh	16th January 2024
Further, the following employees ceased to be KMPs under the SECC Regulations, 2018 during FY 2023-24:
Sr. No.	Name	Last working day as KMP
1	Mr. Shashank Sathe	28th April 2023
2	Mr. Ajit Phanse	2nd May 2023
3	Mr. Sanjay Gakhar	27th August 2023
4	Ms. Komal Kanzaria	27th August 2023
5	Mr. Muthappa Kaveriappa Nellamakada	27th August 2023
6	Mr. Prashant Brahmanand Wagh	27th August 2023
7	Mr. Puneet Shadija	27th August 2023
8	Mr. Vaibhav Pramod Aggarwal	27th August 2023
9	Mr. Vijay Patel	27th August 2023
10	Mr. Suresh Raval	31st March 2024

Mr. Chandresh Shah joined MCX as CFO- Designate on 18^th April 2024 and was designated as Chief Financial officer w.ef. 01^st May 2024. Mr. Sunil Batra joined MCX as CTO - Designate on 26^th April 2024 and was designated as Chief Technology Officer w.e.f 01^st May 2024. Mr. Shailendra Aggarwal joined as DR Site in Charge on 23^rd May 2024.

Mr. Satyajeet Bolar ceased to be the Chief Financial Officer with closing hours of 30^th April 2024.

Mr. P. S. Reddy ceased to be the MD & CEO with closing hours of 09^th May 2024

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 05^th January 2017 providing guidance to listed entities about various aspects involved in the Board Evaluation process (“SEBI Guidance Note”) and SEBI circular dated 05^th 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 05^th 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 predetermined 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. Additionally, external performance evaluation of Committees has been carried out for FY 2023-24.

The detailed procedure followed for the performance evaluation of the Board, Committees and individual Directors & Independent External Persons is enumerated in the Corporate Governance Report forming part of this Annual Report.

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 3^rd largest Exchange by the number of commodity Options contracts traded in CY 2023, improving from 5^th 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. In February’24, MCX and Jakarta Futures Exchange (JFX) signed an MoU to enhance collaboration in key areas, including knowledge sharing, research, education, training, awareness creation, and other market development initiatives. 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, the Multi Commodity Exchange of India Ltd. (MCX) has embarked upon the path of recognizing domestic bullion refiners for good delivery of gold on Exchange platform.

Accordingly, MCX empanelled five domestic refiners as per “MCX Good Delivery Norms for BIS-Standard Gold/Silver” effective from 06^th March 2021 and saw a successful delivery of 9,223 kg (about ' 5,170 crore) till 05^th May 2024 contract.

The Bullion segment attained various landmarks during FY 2023-24:

MCX Gold Options with Gold (1 kg) Futures as underlying contract registered an average daily turnover of ' 5,447 crores in FY 2023-24 up by 247% from ' 1,572 crores in FY 2022-23. It’s highest turnover of ' 37,878 crore was observed on 21^st March 2024 and recorded highest open interest of 23,678 Kg on 13^th March 2024.

MCX Gold Mini Options with Gold Mini (100 gram) Futures as underlying registered an average daily turnover of ' 660 crores in FY 2023-24 up by 400% from ' 132 crores in FY 2022-23. It’s highest turnover of ' 3,332 crore was observed on 27^th December 2023 and recorded highest open interest of 1623 Kg on 26^th December 2023.

Similarly, MCX Silver Options with Silver (30 kg) Futures as underlying contract registered an average daily turnover of ' 2,586 crores in FY 2023-24 up by 1161% from ' 205 crores in FY 2022-23. It’s highest turnover of ' 18,803 crore was observed on 22^nd February 2024 and recorded highest open interest of 5,74,200 Kg on 22^nd February 2024.

Further, MCX Silver Mini Options with Silver (5 kg) Futures as underlying contract registered an average daily turnover of ' 408 crores in FY 2023-24 up by 558% from ' 62 crores in FY 2022-23. It’s highest turnover of ' 2,675 crore was observed on 21^st August 2023 and recorded highest open interest of 1,21,885 Kg on 13^th February 2024.

Continued success of new product design in Bullion:

Gold Petal (The world’s first deliverable 1 gram Gold Futures contract) has seen delivery of 600 kg (5,99,997 coins) since its launch in October 2019 till 31^st March 2024.

Similarly, Silver (1kg) Micro contract has seen successful delivery of 1,35,811 kg from February 2020 series onwards till 31^st March 2024 and Silver Mini (5 Kg) has seen successful delivery of 1,85,340 kg from June 2020 series onwards till 31^st March 2024.

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.

ENERGYSEGMENT PRODUCTS

The global oil market experienced notable changes, in the form of fluctuating crude oil prices and a consistent rise in both consumption and production. Global oil market was largely supported by both consumer mobility, and producer economics. However, the conflict among groups heightened geopolitical tensions and raised concerns that an escalation of the conflict could further disrupt the flow of crude oil via key trade chokepoints. The main alternative shipping route around Africa’s Cape of Good Hope extended voyages by up to two weeks, adding pressure on global supply chains and boosting freight and insurance costs.

Russia became the top oil supplier to India during the fiscal year 2023-24 for a second year in a row, squeezing the market share of Middle Eastern and OPEC producers to historic lows. From a domestic perspective, India plans to build its first privately managed strategic petroleum reserve (SPR) by 2029-30, granting the operator the freedom to trade all the stored oil, according to the chief executive of Indian Strategic Petroleum Reserves Ltd (ISPRL). Expanding oil storage capacity would also help India join the International Energy Agency (IEA), which requires its members to hold a minimum of 90 days of oil consumption.

In the natural gas segment, Indian LNG imports were up 16% year-on-year in the fiscal year 2023-24, while total gas consumption in the country was higher by 10%, aided by softer international prices, during the same period. Imports accounted for 46% of total domestic gas consumption in the fiscal year 2023-24. Sectors including power, fertilizers and other industries ramped up their intake of fuel as prices hit a three-year low due to ample supply in the market. LNG prices in the international markets dropped as mild winter and high levels of storage in Europe weakened demand.

In the domestic market, Government of India has revised domestic natural gas pricing guidelines for gas produced from nomination fields of ONGC/OIL, New Exploration Licensing Policy (NELP) blocks and pre-NELP blocks, where price of such natural gas to be 10% of the monthly average of Indian Crude Basket and shall be notified on monthly basis. For the gas produced by ONGC/OIL from their nomination fields, the above-mentioned APM price shall be subject to a ceiling of US$ 6.50/MMBTU on Gross Calorific Value (GCV) basis for the same period.

MCX Energy Contracts Review

Phenomenal success has been witnessed in the crude oil and natural gas options contracts. MCX Crude oil options registered an ADT of ' 69,040 cr during FY 2023-24, compared to an ADT of ' 25,888 cr during FY 2022-23, marking a remarkable increase of 166%. MCX Crude oil options contracts set a benchmark by registering the highest turnover of ' 2,96,916 cr on 15^th May 2024. The MCX Natural gas options also saw incredible growth of 84%, as it clocked an ADT of ' 11,049 cr during FY 2023-24, as compared to ' 5,986 cr in FY 2022-23. MCX Natural Gas Options contract made a hat trick of new highs, finally setting the highest at ' 84,774 Crores on 23^rd May 2024. The MCX Crude oil futures contracts registered an average daily turnover (ADT) of ' 1,940 cr in FY 2023-24. The MCX Natural gas futures contracts registered an ADT of ' 3,090 cr in FY 2023-24. Meanwhile, MCX Crude oil mini futures registered an ADT of ' 209 cr in FY 2023-24 and MCX Natural gas mini futures contracts registered an average daily turnover of ' 204 cr in FY 2023-24.

With our vision of catering to wider value chain participants in the energy complex, especially from the perspective of SME/MSME companies and the retail participants, the Exchange launched crude oil mini options (10 bbl) and natural gas mini options (250 MMBtu). Both the contracts were launched on 23^rd April 2024. The contracts garnered good market interest and clocked an Average Daily Turnover (ADT) of ' 145 cr and ' 91 cr respectively, since inception to 30^th June 2024.

‘MCX Energy Conclave 2024’ was hosted at the Taj Lands End, Mumbai on 26^th April 2024, a one-day thought leadership conference to deliberate and brainstorm over thematic sessions, unfolding the energy landscape. The distinguished Chief Guest Shri. Ananth Narayan G, Whole Time Member, SEBI addressed the gathering along with our Guest of Honour, Smt. Yogieta S. Mehra, Chief (Economics), CERC. The conclave was well attended by regulatory bodies, oil & gas industry, financial institutions, broker members and other stakeholders of India’s commodity market, reaffirming MCX’s commitment to fostering dialogue and knowledge-sharing within the industry.

Agricultural Commodities

MCX agriculture commodities futures registered an average daily turnover of 22.30 crore in FY 2023-24 compared to 91.43 crore in FY 2022-23. The MCX Cotton contract turnover in FY 2023-24 with an average daily turnover of 12.39 crore compared to 78.82 crore compared in FY 2022-23. Average daily turnover of Mentha oil contract is 9.91 crore in FY 2023-24 compared to FY 2022-23 was 12.61 crore.

The CPO futures was suspended from 20^th December 2021, the suspension period was extended further one year till 20^th December 2024. 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. One additional domestic Refined Lead producers, namely, (1) Ardee Industries Pvt. Ltd, Nellore, (2) POCL Enterprises Limited, Maraimalai Nagar, (3) Gravita India Limited, Phagi plant, and (4) Gravita India Limited, Mundra plant were empaneled as MCX approved brands during the FY 2023-24. This takes the total count of

approved domestic refined lead producers to seven. The empanelment of some more domestic producers is under process.

In all, 94,036 MTs of base metals were delivered via the Exchange settlement in FY 2023-24. 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 centers across the country to cater to the collective needs of the wider audience. Delivery centers are now operational at Raipur (Chhattisgarh), Kolkata (West Bengal), Palwal (NCR/Haryana), Chennai (Tamil Nadu) and Thane (Maharashtra). The additional delivery centers have also started witnessing inflows of multiple metals.

In addition to this, the Exchange had launched Mini Contracts (1MT each for Aluminium, Lead and Zinc) towards the end of FY 2022-23 to bring back the lost retail participation. The delivered quantity of Aluminium Mini, Lead Mini and Zinc Mini is 5,108 MTs, 304 MTs, and 5,972 MTs respectively via Exchange settlement during FY 2023-24. Further, in FY 2023-24 the Exchange also launched Steel Rebar contract of 5MT lot size with five delivery centers of Raipur, Durgapur, Chennai, Palwal and Thane keeping in mind the national presence.

Some of the important highlights of Base Metals in the year 2023-24 are:

1.    The cumulative deliveries via exchange settlement went past 4 Lakh MTs since the year 2019 when those were converted to delivery settled contracts.

2.    Open Interest has gone up further across the metal contracts. Average daily OI for FY 2023-24 was at 74,337 MTs v/s 54,749 MTs for FY 2022-23. Copper and Zinc Open Interest was a standout performance in FY 2023-24.

3.    We have made the BIS registered grade as base grade for the Refined Lead and Lead Mini contracts. The minimum Lead purity levels are now at 99.98% with MCX empaneled brands being eligible to be deliverable. The LME registered brand of Lead with minimum purity of 99.98% and above continues to be deliverable.

Index Futures

The Average Daily Turnover (ADT) for FY 2023-24 for MCX iCOMDEX Index futures was ' 32 crore. The Exchange is reaching out to the market participants for increased participation in the index products. SEBI has issued the regulatory framework for Options on commodity indices and the Exchange shall consider launching the same post necessary technology developments.

Market Participants

As on 31^st March 2024, the Company has a national reach with 547 members, having 36,312 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) around 685 cities/ towns across India. The unique traded client codes (UCC - PAN based*) which are of significant importance to Exchange, witnessed a rise from 6.2 lakh in FY 2022-23 to 9.3 lakh in FY 2023-24.

On the Institutional front, more Mutual Funds with new schemes were registered in the exchange for participation in FY 2023-24. In the Alternative Investment Funds & PMS category we saw addition of names. In FY 2023-24, FPIs turnover and participation was highest and to further enhance their participation Direct Market Access (DMA) facility was rolled out by the regulator.

19. REGULATORY DEVELOPMENTS- FY 2023-24

During the year under review, SEBI, has issued master circulars for Stock Brokers, Commodity Derivatives Segment, Know Your Client (KYC) norms for Securities market and Online Resolution of Disputes, has amended certain clauses of PML guidelines, Upstreaming of clients’ funds by Stock Brokers, Online Resolution of Disputes, Cyber Security and Cyber Resilience framework for Stock Exchanges, has extended the timelines in cases of Trading preferences by clients, nomination in eligible demat accounts and prescribed framework of Qualified Stock Brokers to more stock brokers, facility of voluntary freezing/blocking the online access of the trading account on account of suspicious activities, guidelines for strengthening Cyber Security and Cyber Resilience framework of Mils and Most Important Terms and Conditions.

SEBI has allowed Stock Exchanges to launch additional thirteen goods and alloys for five metals in future in their commodity derivatives segment by amending section 2 of the SCRA, 1956.

The important regulatory developments during FY 2023-24, primarily by SEBI, are as hereunder:

April 2023

I.    In order to enable the Members to have access to all the applicable circulars at one place, SEBI has directed MIIs to issue Master Circular incorporating all guidelines issued during the financial year on or before 30^th April of each year. The first Master Circular incorporating all the guidelines applicable as on 31^st March 2024 shall be issued on or before 30^th June 2023.

II.    SEBI has issued circular addressing stockbrokers, clearing members through stock exchange to wound down the existing bank guarantee created out of client’s fund by 30^th September 2023. Further, no new bank guarantee shall be created out of clients’ funds by stockbrokers, clearing members from 01^st May 2023.

Stock Brokers to provide certificate from its statutory auditor confirming the implementation of this circular by 16^th October 2023 and Stock Exchanges and Clearing corporation shall verify the compliance of the provisions of this circular in their periodic inspections/reporting.

III.    The Government of India, Ministry of Finance has issued an order dated 30^th January 2023 vide F. No. P-12011/14/2022-ES Cell-DOR (“the 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 Stock Exchanges and Intermediaries to comply with the procedure laid down in the said Order.

May 2023

I.    Based on the recommendations of the Technology Advisory Committee (TAC), SEBI has directed the MIIs to ensure the requirements prescribed in the circular while establishing the testing framework of its systems/applications.

II.    SEBI has allowed stock exchanges to extend Direct Market Access facility to Foreign Portfolio Investors for participation in Exchange Traded Commodity Derivatives subject to the conditions specified in the circulars.

III.    In order to ensure availability of comprehensive information mentioned in various circulars/directions pertaining to stock brokers at one place, SEBI has issued Master Circular for stock brokers for necessary compliances.

IV.    Based on extensive deliberations with the Clearing Corporations and recommendations of Risk Management Review Committee, Clearing Corporation in Commodity Derivatives Segment may now

align their core SGF in terms of SEBI circulars dated 27^th August 2014 as well as 11^th 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.    SEBI has specified the framework for upstreaming of clients’ funds by Stock Brokers (SBs)/ Clearing Members (CMs) to 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 upstreamed by SB/ CMs to CCs only in the form of either cash, lien on FDR (subject to certain conditions), 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 modified clause no. 3.C.V and 3.A.I.d of its earlier circular dated 08^th June 2023 on Implementation of circular on upstreaming of clients’ funds by Stock Brokers (SBs) / Clearing Members (CMs) to Clearing Corporations (CCs). Further, extended the applicability of the provisions of the earlier circular stated at clause 3.C.II, 3.C.III, 3.C.V, 3.C.IX, 3.C.XI from 01^st September 2023.

July 2023

I. SEBI advised MIIs in consultation with their empanelled ODR Institutions to establish a common Online Dispute Resolution Portal (“ODR Portal”) which harnesses online conciliation and online arbitration for resolution of disputes arising in the Indian Securities Market.

August 2023

I.    SEBI vide its circular dated 01^st August 2023 on ‘Trading Preferences by Clients’ has clarified that the format of “Trading Preferences” as specified in SEBI circular dated 21^st June 2023, shall not be made applicable to members registered exclusively with commodity derivatives exchanges. Such members shall use the format as prescribed by the erstwhile Forward Markets Commission (FMC) vide its circular no. FMC/COMPL/IV/KRA-05/11/14 dated 26^th February 2015.

II.    SEBI has issued Corrigendum cum amendment to circular dated 31^st July 2023 on Online Resolution of Disputes in the Indian Securities Market wherein certain clauses of circular dated 31^st July 2023 were modified.

III.    In order to ensure availability of comprehensive information mentioned in various circulars pertaining to commodity derivatives market or segment at one place, SEBI has issued Master Circular for Commodity Derivatives Segment.

IV.    SEBI has issued a circular dated 11^th August 2023, to simplify the KYC process and rationalize the risk management framework based on the feedback received from Stakeholders.

V.    SEBI has modified clause 3 of its earlier circular dated 20^th May 2022 on Modification in Cyber Security and Cyber Resilience framework for Stock Exchanges, Clearing Corporations and Depositories.

Further, MIIs whose systems have been identified as Critical Information Infrastructure (CII) by National Critical Information Infrastructure Protection Centre (NCIIPC), are mandated to send regular updates/ closure status of the vulnerabilities found in their respective “protected systems” to NCIIPC.

VI. SEBI has issued guidelines for strengthening the existing cyber security and cyber resilience framework of MIIS as mentioned in the Annexure A of the said circular.

The compliance of the guidelines shall be provided by the MIIs along with their cybersecurity audit report (conducted as per the applicable SEBI Cybersecurity and Cyber Resilience framework). The compliance shall be submitted as per the existing reporting mechanism.

September 2023

I.    SEBI has revised the framework for handling of complaints received through SCORES platform for Entities and for monitoring the complaints by designated bodies is specified in Annexure I of the SEBI circular.

II.    SEBI has made submission of choice of nomination of trading account as voluntary and extended timelines for nomination in eligible demat accounts and submission of PAN, Nomination, Contact details, Bank A/c details and specimen signature for its corresponding folio numbers till 31^st December 2023.

October 2023

I.    SEBI has introduced a centralized mechanism for reporting and verification in case of the demise of an investor.

Also, in order to have uniformity of operationalizing this circular, a common Standard Operation Procedure has been issued on Exchange website in consultation with Stock Exchanges, Depositories, KRAs and Industry Associations.

II.    In order to ensure availability of comprehensive information mentioned in various circulars/directions pertaining to Know Your Client (KYC) norms to be followed by intermediaries in the securities market at one place, SEBI has issued Master Circular on Know Your Client (KYC) norms for the securities market.

III.    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 pursuant to Government of India gazette notification dated 04^th September 2023.

November 2023

I.    In order to bring into focus the critical aspects of the broker-client relationship and for ease of understanding

of the clients, SEBI has advised that brokers shall inform a standard Most Important Terms and Conditions (MITC) which shall be acknowledged by the client.

December 2023

I.    SEBI had extended timelines for implementation of provisions of circular no. SEBI/HO/OIAE/IGRD/ CIR/P/2023/156 dated 20^th September 2023 related to work flow of processing of investor grievances by Entities and framework for monitoring and handling of investor complaints by the Designated Bodies to 01^st April 2024.

II.    SEBI has revised the framework for Upstreaming of clients’ funds by Stock Brokers (SB)/Clearing Members (CM) to Clearing Corporations (CCs).

SBs/CMs shall upstream all the clients’ clear credit balances to CCs on End of Day (EOD) basis. Such upstreaming shall be done only in the form of either cash, lien on Fixed Deposit Receipts (FDRs) created out of clients’ funds, or pledge of units of Mutual Fund Overnight Schemes (MFOS) created out of clients’ funds.

III.    SEBI has amended certain clauses of its earlier circulars dated 31^st July 2023 on Online Resolution of Disputes in the Indian Securities Market.

IV.    SEBI has extended timelines for providing ‘choice of nomination’ in eligible demat accounts and mutual fund folios to 30^th June 2024.

V.    SEBI has modified clause 47 of Master Circular on Stock Brokers dated 17^th May 2023 and the same is applicable with effect from quarterly settlement of January - March 2024 and monthly settlement of January 2024.

VI.    SEBI has issued a master circular for Online Resolution of Disputes.

January 2024

I.    The framework for Trading Members to provide the facility of voluntary freezing/blocking the online access of the trading account to their clients on account of suspicious activities shall be laid down by the Industry Standards Forum, under the aegis of stock exchanges, in consultation with SEBI and the same shall inter-alia contain necessary guidelines as mentioned by SEBI in the circular.

Stock Exchange to ensure that the guidelines so issued under the framework (framework for Trading Members to provide the facility of voluntary freezing/blocking the online access of the trading account to their clients on account of suspicious activities) are implemented by Trading members with effect from 01^st July 2024.

Stock Exchanges shall also put in place an appropriate reporting requirement by Trading Members to enforce the above system. A compliance report to this effect shall be submitted to SEBI latest by 31^st August 2024.

II.    In order to bring in efficiencies in reporting and a step towards ease of doing business, SEBI has discontinued certain reports and modified the following clauses of the Master circular on Stock Brokers dated 17^th May 2023.

Stock Exchanges shall put in place a mechanism for monitoring of clients’ funds (‘G’ principal) lying with the stock brokers on the principle enumerated below:

G Principle: The total available funds i.e. cash and cash equivalent with the stock broker and with the clearing corporation/clearing member should always be equal to or greater than clients’ funds as per the ledger balance.

February 2024

I. No regulatory update during the month of February 2024.

March 2024

I.    SEBI has issued new list of goods notified vide notification dated 01^st March 2024 which includes additional thirteen (13) goods and alloys for five (5) metals thereby increasing the list of goods on which derivatives can be launched from 91 to 104.

II.    SEBI has decided to extend the framework of Qualified Stock Brokers to more Stock Brokers and prescribed additional parameters for designing a stockbroker as QSB.

III.    SEBI has shared notification of Department of Revenue, Ministry of Finance vide Gazette Notification S.O. 1339(E) dated 14^th March 2024 notifying another 4 entities in addition to 155 and 39 entities notified vide gazette notification S.O. 3187(E) dated 13^th July 2022 and S.O. 446(E) dated 30^th January 2023 respectively to undertake Aadhaar authentication services of UIDAI under section 11A of the Prevention of Money-laundering Act, 2002.

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. The framework includes, among other elements, a risk appetite or risk tolerance policy with clear quantitative metrics and thresholds to monitor the performance of the Company’s risk appetite.

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 31^st March 2024, 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 (CRiO) review internal and external audits conducted by external auditors, encompassing financial, operational, system, and cyber aspects. The ERM department identify areas of risk and work closely with functional departments to implement mitigation strategies. The CRiO oversees overall risk management of the Company and submits a report to SEBI on a half-yearly basis.

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.

The organization provides for three lines of defense construct where: i. the first line of defense incorporates business units and support functions as it has the responsibility to own and manage risks associated with day to day operational activities. ii. the second line of defense comprises of various oversight functions i.e., regulatory, risk management, compliance teams, and iii. the third line of defense comprises the internal audit function.

For details relating to ‘Risks and Concerns’ of your Company please refer to 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 ' 25 lakhs per client, with no member-wise limit for SEBI-registered members declared defaulter on or after 24^th January 2018. Further, the limits of ' 2 lakhs per investor per defaulter member and ' 200 lakhs per defaulter member shall continue to be applicable for claims against members, declared defaulter prior to 24^th January 2018 and for non-SEBI registered members. As on 31^st March 2024, the corpus of IPF (provisional) stood at ' 2,27,76,30,661/-.

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, 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 31^st March 2024, the corpus of ISF stood at ' 8,70,86,401/-.

In order to enhance literacy and to promote investor education and awareness in the commodity derivatives market, around 2256 awareness programs (seminars/webinars) were conducted under the banner of ISF in FY 2023-24. Out of these programs/webinars, over 259 programs were RISA seminars/webinars conducted jointly with SEBI. In FY 2023-24, the Exchange has conducted awareness programs across India, for investors, students, FPOs, hedgers, physical market participants/stakeholders, micro small and medium enterprises (MSME’s), corporates, etc. from the bullion industry, metal industries, energy markets and agricultural sector including farmers, farmer producer organizations (FPO’s).

Some major awareness initiatives in FY 2023-24 undertaken were as follows:

World Investor Week (WIW) was celebrated from 09^th October 2023 till 15^th October 2023 throughout India under the aegis of SEBI & IOSCO.

•    Total over 187 awareness programs were conducted across India during WIW, which had over 9849 participants.

•    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 2023-24, a number of investor awareness activities were carried through various media across (digital, electronic and print modes).

Various Investor Awareness Media Activities carried out during FY 23-24:

‘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, and 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 2023.

•    Investor Awareness Ads were displayed at airports and were run on various social media platforms.

•    Quiz cards are posted everyday on social media.

Other Initiatives:

MCX IPF successfully organized the 6^th edition of ‘MCX-IPF COMQUEST’ - 2023-24, its premier, National-level Commodity Market Educational Quiz for students. This year, around 6000 individual students, from over 480 institutes across India participated in the competition, making it the largest number amongst all previously held editions.

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 2023-24:

i.    Certification courses such as 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.    Carried out multiple engagement programmes towards imparting education and awareness among academia, students covering over 180 B-Schools, Colleges, academic bodies, etc.

iv.    Successfully concluded the VI^th edition of MCX-IPF COMQUEST All India commodity quiz which saw a record number of participation from both the academic institutions and their students. For the first time Zonal Finals across all 4 zones were also conducted this year.

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. 01^st 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 31^st March 2024, MCXCCL has entered into agreements with five Warehouse Service Provider (WSPs) for facilitating physical deliveries in agricultural commodities and base metals. As on 31^st March 2024, MCXCCL is operating from 28 accredited warehouses of which 12 warehouses are registered with Warehousing Development and Regulatory Authority (WDRA). The remaining 16 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 centre.

24.    SUBSIDIARYMulti 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 had granted renewal of recognition to MCXCCL to act as a Clearing Corporation for a period of three years commencing from 31^st July 2019 and ending on 31^st July 2022. SEBI vide its letter dated 19^th May 2022, has granted renewal of recognition to MCXCCL, to act as a Clearing Corporation for a period of further three years commencing on 31^st July 2022 and ending on 30^th 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 Counterparty (QCCP) by SEBI. This enables the participants to apply lower risk weightage towards their exposures to MCXCCL as per Basel II capital adequacy framework. It has membership of CCP12, the renowned global association of Central Counterparties 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 31^st March 2024, Authorized Share Capital of MCXCCL stood at ' 30,000 lakh and issued and paid-up share capital stood at ' 23,999 lakh. The net worth as at 31^st March 2024 was ' 48,817 lakh.

Core Settlement Guarantee Fund (Core SGF)

SEBI vide circular no. SEBI/HO/CDMRD/DRMP/CIR/2018/111 dated 11^th 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 31^st March 2024 stood at ' 78,056 lakh, of which ' 14,485 lakh has been contributed by MCX, ' 43,451 lakh has been contributed by MCXCCL and ' 20,120 lakh has accrued from penalties, interest and other accruals.

25.    ASSOCIATESCDSL 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 18^th 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. 04^th June 2018, consequent to investment of ' 1,200 lakh comprising of 12,000,000 equity shares of ' 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 ' 3,000 lakh each comprising of 30,00,00,000 equity shares of ' 1 each equivalent to 20% stake in IIBH as on 31^st March 2024.

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 standalone and 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 Technology 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 all aforementioned standards. As a part of its commitment to its 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 organization 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 endeavor of your Company to hire and retain the top talent. The Company has invested in senior leadership resources and 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 futures contracts in Steel Rebar on 15^th January 2024. Likewise, research on market demand led your Company to launch Crude Oil Mini Options contracts with Crude Oil Mini (10 barrels) Futures as underlying and Natural Gas Mini Options contract with Natural Gas Mini (250 mmbtu) Futures as underlying with effect from 23^rd April 2024. Such product-based research were also carried out in 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 FY 2023-24 on various themes connected to commodity derivatives market. The studies were 'Hedging of Price Risks in Base Metals’ undertaken by ICFAI Business School, 'Initiatives for Achieving Atmanirbhar Bharat - Impact on Physical Commodity Markets and Exchange Ecosystem’, undertaken by IIT Kharagpur, 'Hedging of Price Risks in Energy Commodities’, undertaken by UPES and a Publication on Mentha Oil undertaken by Transgraph Consulting. Further, two research studies, initiated in FY 2022-23, were completed during FY 2023-24. These are 'Developmental Measures for Promoting and Sustaining Commodity Derivatives Contracts undertaken by KPMG Assurance and Consulting, and 'Analyzing Costs and Benefits of Flexibility in Contract Design on Development of Commodity Derivatives Market’ undertaken by NIT Rourkela.

The reports of the research studies have been widely publicized through the Exchange’s website and social media accounts and the printed copies of the reports compiled and circulated among policy circles, educational institutions, regulatory bodies etc. Besides, the findings of the studies are also being disseminated through articles published in the print media and also widely-publicized awareness events.

To spread awareness and promote research in commodity markets and its ecosystem, your Company publishes an annual publication titled ‘Commodity Insights Yearbook’. The Commodity Insights Yearbook 2023 was a joint initiative of MCX IPF and Indian Institute of Management Bangalore. The Yearbook, released by Shri G.P. Garg, Executive Director - SEBI at a knowledge-sharing session on 12^th October 2023, is a compilation of research articles and useful data on commodity markets. The theme for the 2023 edition of the publication was ‘Agricultural Commodities’ and, 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.

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 2023-24, 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.

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 follows 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 has used Lithium Ion batteries for their UPS system which has a long durable life w.r.t standard batteries.

Your Company has recently taken an initiative to install Retro emission Control Devices (RECD) on their Diesel Generator sets which traps Particulate matter (PM) and restricts it from releasing in the air promoting healthy environment practices.

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 is proactively working on causes of nation building.

The CSR allocation for FY 2023-24 was ' 284 lakh. Your Company has made specific allocations towards:

•    Supporting transportation facility for commuting for the disabled, marginalized children from far flung villages to their school and vice-e-versa, to reduce the dropout rates of the students and to provide a safe mode of transportation.

•    Supporting financial assistance for construction of school/ classrooms for underprivileged children which will help in receiving quality education.

•    Supporting running cost of school and education sponsorship program for the underprivileged students to get facilities like uniform, stationaries, books, electricity facility, internet facility, teachers’ salary etc.

•    Providing financial support for free medical care to underprivileged, destitute women for their medication, investigations and surgery, post operative healthcare.

•    Provide funding for laptops, which shall be used to run digital literacy course and develop managerial skills for self-help groups.

•    Provide support for skill development programs/Livelihood for person with Intellectual Disabilities.

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 2023-24, 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, Code of Practices and Procedures for Fair Disclosures of Unpublished Price Sensitive Information, Code of Conduct for Prevention of Insider Trading, 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.    POLICY ON NOMINATION AND REMUNERATION PARTICULARS OF REMUNERATION

Your Company has adopted a well-defined Nomination & Remuneration Policy for Directors, Key Managerial Personnel 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/investor-relations/corporate-qovernance.

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 III.

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 IV.

B.    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-govemance For further details, please refer to the report on Corporate Governance forming part of this Annual Report.

C.    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 2023-24, 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 V 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

D.    INSIDER TRADING REGULATIONS

Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015, 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-governance

E.    CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Pursuant to the provisions of Regulation 23 of the SEBI (LODR) Regulations, 2015, 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 ' 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. 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 VI 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/investor-relations/corporate-governance

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.

F.    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/investor-relations/corporate-governance.

G.    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.

33.    STATUTORY AUDITORS AND THEIR REPORT

The shareholders, at their 18^th Annual General Meeting (AGM) held on 31^st 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 18^th AGM until the conclusion of the 23^rd AGM of the Company, at a remuneration of ' 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 04^th 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 ' 15,90,000/- for each year (plus reimbursement of out-of-pocket expenses and applicable taxes). The Audit Committee and Board in its meeting held on July 27, 2024, considered, and recommended an increase of 10% in the statutory audit fees of M/s Shah Gupta & Co. for the FY 2024-25 amounting to ' 17,49,000/- (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.

34.    SECRETARIAL AUDITORS AND THEIR REPORT

M/s. AVS & Associates, Practicing Company Secretaries (FRN: P2016MH054900), were appointed as the Secretarial Auditors by the Board to conduct the secretarial audit of the Company for FY 2023-24. 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 FY 2023-24.

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 31^st March 2024 are annexed as Annexure V to this Report. The Secretarial Audit Report does not contain any qualifications, reservations, or adverse remarks.

35.    INTERNAL AUDITOR

Internal Audit for the year ended 31^st March 2024, 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 has approved the appointment of M/s Mittal & Associates, Chartered Accountants as internal auditors for a period of two years beginning from FY 2024-25.

36.    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.

37.    COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards (“SS”) issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. During the year under review, the Company has complied with the Secretarial Standards

i.e. SS-1 and SS-2 relating to “Meetings of the Board of Directors” and “General Meetings”, respectively.

38.    ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, the Annual Return in form MGT-7 for FY 2023-24 is available at the web link https://www.mcxindia.com/investor-relations

39.    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 31^st March 2024.

40.    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.

41.    LEGAL UPDATE Crude Oil Matters:

On 20^th April 2020, the prices of the Crude Oil Futures Contract traded on NYMEX, that was due to expire on the next day i.e. 21^st 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 21^st April 2020, issued by MCXCCL, the Due Date Rate of Crude Oil Futures contract expiring on 20^th April 2020 was fixed at a negative value viz. < (-) 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 21^st 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 24^th 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 01^st September 2022 wherein the Hon’ble Supreme Court had inter-alia directed to transfer all the writ petitions filed before various High Courts to Hon’ble Bombay High Court which is now being heard in the Bombay High Court. In two other Writs, SEBI had in January 2023 filed Transfer Petition before the Supreme Court which shall come up for hearing in due course.

42.    HUMAN RESOURCE DEVELOPMENT

Human Resources 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 31^st March 2024, the Exchange had 410 employees (includes 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”, Family Day, celebrations of various festivals designed to have enhanced interpersonal relationship and team work. Exchange has been rewarding children of our employees for their exceptional efforts that they put in, in passing their 10^th and 12^th standard examination with flying colors.

43.    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 has 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 2023- 24 in relation thereto.

44.    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 27^th 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 31^st March 2024.

There were no grants pending for vesting as at 31^st March 2024. No new grants were made during FY 2023-24.

The relevant disclosures required under the SEBI Regulations for the year ended 31^st March 2024 are available on the website of the Company at https://www.mcxindia.com/investor-relations/corporate-governance.

45. 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 Precision Air colling system for Rack servers in the Data Centre, which are fully power saving having Variable Frequency device (VFD) coupled with linear scroll compressors which favors low drive proportional power during low power requirement. Moreover, the system 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 in the Server Racks.

Your Company has Variable Refrigerant Volume (VRV) air-conditioning system for the entire building, which works on invertor compressor i.e during less occupancy the compressor drive have less rotations resulting in low energy requirements promoting 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 ASHRAE (American Society of Heating, Refrigerating and Air Conditioning Engineers) guidelines for Airconditioning 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 unnecessary printing of papers and waste of energy.

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 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 were given by the senior management to all matters of cyber security and risk management. It is the constant endeavor 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 defense of critical infrastructure. There is a dedicated Security Operations Centre (SOC) staffed with industry experts who are armed with the latest security technologies and 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 the 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-premises to protect against cyber-attacks.

All staff and members are provided with information security awareness sessions and trainings on cybervigilance 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 the 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 2023-24.

Your Company ensured that staff members working at DRS run 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), streamlining communication protocols, identifying broad scenarios of disaster, escalation hierarchy among others.

Upgrading Information Technology Systems

Your Company has continued to allocate substantial resources towards upgrading information technology systems. Our overarching goal remains achieving higher capacity, lower latency, improved market efficiency and transparency, enhanced user access, and providing flexibility for future business growth and market needs.

Migration to New Technology Platform

In 2021, Your Company partnered with Tata Consultancy Services Ltd (TCS) to implement an integrated end-to-end Commodities Derivative Platform (CDP). Despite initial delays, we are pleased to report that the new platform went live on 16^th October 2023. This project represents one of the most complex transformations of a running exchange, handling over 100 million transactions per day, and was executed as a big bang single cutover covering the entire scope of the transformation program including trading, real-time risk management, real-time clearing, and settlement.

The new CDP that TCS implemented for MCX comprises the following three TCS offerings:

•    Trading Platform from Deutsche Boerse (T7) for Trading and Market Data Feeds

•    Frontend application for Securities Trading (Trader Workstation (TWS))

•    TCS BaNCS for Market Infrastructure (MI) for Real-time Clearing, Real-time Risk Management, Collateral Management, Settlement, and Reporting

Successful Migration and Implementation

In a one-of-its-kind implementation, we successfully completed the migration of all core systems covering trading, clearing, risk management, and settlement in a single cutover, compared to the phased implementation typically done in other exchanges. The overall duration of the program, 28 months, is also a record for an implementation of this kind.

As part of the implementation, rigorous testing was carried out, including comprehensive System Integration Testing (SIT), User Acceptance Testing (UAT), member/participant testing through a series of mock sessions, and parallel runs. Additionally, Non-Functional Requirement (NFR) tests were conducted for various scenarios involving spurts and volumes of transactions.

Extension of Software Support Services

To ensure the smooth running of our business during the migration period, your Company extended the existing software support services contract with M/s. 63 moons Technologies Ltd for limited period. We are pleased to report that with the successful implementation of the new technology platform, the extension has been discontinued.

Strong Technology Framework

MCX’s technology infrastructure is the foundation of our business and a key contributor to the Exchange’s functioning and development. Our trading platform, mission-critical applications, and supporting infrastructure are hosted in a state of the art Data Centre at our headquarters in Mumbai, and replicated at a Near Online Site nearby, and at a Disaster Recovery site in Gift City - Gandhinagar.

Our electronic platform is supported by our infrastructure and advanced technology, allowing fast trade execution, with uptimes exceeding 99.9% since inception, latency in single-digit milliseconds, anonymity between counterparties, price transparency, prompt and reliable order routing, trade reporting, multicast tick-by-tick market data dissemination and market surveillance. The platform is built on state-of-the-art

storage-based technology, using Non-Volatile Memory Express (NVME) technology, one of the fastest storages in the world. This positions MCX as one of the first to deploy such technology, providing a competitive edge.

(i)    The benefits derived like product improvement, cost reduction and product development:

During FY 2023-24, 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.

In the fiscal year 2023-24, the Company’s internal software development team initiated several key projects to augment and deploy a range of ancillary systems in alignment with organizational needs and in compliance with SEBI’s regulations and deadlines. Notable among these initiatives were: 1) Enhancing the surveillance system’s architecture and optimization, which led to a threefold increase in message processing capacity. 2) Implementation of new systems for handling client claims against defaulting members, arbitration processes, and PAN verification in conjunction with KRA. 3) Upgrading outdated technology in legacy applications to remain current and reduce the risk of cyber threats.

(ii)    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.

(iii)    Expenditure incurred on Research and Development (during the year under review) - Not applicableC) 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.

46.    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.

47.    RESOURCES COMMITTED TOWARDS STRENGTHENING REGULATORY FUNCTIONS AND TOWARDS ENSURING COMPLIANCE WITH APPLICABLE REGULATORY REQUIREMENTS

The Company being a recognised Stock Exchange is governed by SEBI. The Company ensures compliances with various regulations and guidelines issued by SEBI from time to time and strives to implement the best governance practices.

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.

During the year under review, the Company’s regulatory division comprised of departments, handling various critical aspects of regulatory compliances, as under:

1.    CRO’s Office

2.    Inspection & Audit

3.    Investor Protection Fund

4.    Investor Services Department

5.    Membership

6.    Surveillance & Investigation

7.    Secretarial & Compliance

8.    Enterprise Risk Management

As on 31^st March 2024, the Company had 109 employees in the overall regulatory function. The Company has dedicated resources to manage the various regulatory functions.

The Company has ensured to make disclosures of various mandatory regulatory requirements along with reporting of the same to various regulatory authorities in addition to informing the same to the Board of Directors and respective Committee.

For the FY ending on 31^st March 2024, MCX incurred direct and indirect expenses including technology expenses amounting to f 3,637 Lakhs as per activity-based accounting methodology towards strengthening regulatory functions and towards ensuring compliance with regulatory requirements.

48.    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 financial year ended 31^st March 2024, the applicable accounting standards had been followed along with proper explanation relating to 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 31^st March 2024 and of the profit of the Company for the year ended 31^st March 2024;

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.

49.    THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 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 along with their status as at the end of the financial year is not applicable.

50.    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.

51.    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.

---

Mar 31, 2023

BOARD''S REPORT

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 31^st March 2023.

1. STATE OF COMPANY''S AFFAIRS FINANCIAL RESULTS

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 (?)	25.51	23.27	29.27	28.18
ii. Diluted (?)	25.51	23.27	29.27	28.18

For FY 2022-23, your Company''s (Standalone) total income stood at ? 52,147 lakh as compared to ? 40,323 lakh in FY
2021-22. The operating income during the year under review was ? 44,922 lakh as against ? 32,978 lakh in FY 2021-22. Net
profit after tax in FY 2022-23 was ? 12,983 lakh as compared to ? 11,846 lakh in FY 2021-22.

In accordance with the provisions of the Income Tax Act, 1961, during the year Company has adopted concessional 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 31^st March 2023 stood at ? 1,59,570 lakh as compared to ? 1,55,530 lakh as at 31^st 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 30^th 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 ? 60 crore (plus applicable taxes). Accordingly, for the
quarter ended 31^st December 2022, MCX has incurred ? 40.20 crore (net of recoveries from MCXCCL, excluding applicable
taxes). Later these services were extended for another two quarters ending 30^th June 2023 for ? 81 crore per quarter (plus
applicable taxes) as per the minimum period of services offered by the vendor. Accordingly for the quarter ended 31^st
March 2023 and 30^th June 2023, MCX has incurred ? 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 01^st
July 2023 at a consideration of ? 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 04^th May 2022 to 14^th July, 2022 and from 12^th August, 2022 to 31^st 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 ? 23,514 crore vis-a-vis ?
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 ? 33,998 crore from ? 7,860 crore. The Average Realization Rate (ARR) for the futures remained unchanged at ? 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 ? 60.43 lakh crore in FY 2022-23 as
against ? 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 ? 87.37 lakh crore as against ? 20.28 lakh crore in the previous year. The futures in bullion, energy, metals and
agriculture registered a turnover of ? 28.20 lakh crore, ? 22.30 lakh crore, ? 9.50 lakh crore and ? 0.21 lakh crore, respectively,
as against ? 26.45 lakh crore, ? 24.02 lakh crore, ? 15.08 lakh crore and ? 1.12 lakh crore in the previous year. On the other
hand, options turnover in energy, bullion and metals recorded total of ? 81.92 lakh crore, ? 5.45 lakh crore and ? 0.01 lakh
crore, respectively, during FY 2022-23 vis-a-vis ? 17.69 lakh crore, ? 2.58 lakh crore and ? 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 31^st March 2023, the
paid-up share capital of your Company stood at ? 5,099.84 lakh comprising of 50998369 Equity shares of ? 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 ? 1,20,415 lakh (Previous Year ? 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 20^th May 2023, have recommended a dividend of ? 19.09
(191%) per equity share on a face value of ? 10 per share for the Financial Year ended 31^st 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 ? 9,736 lakh, being a payout of 75% of the profit after tax (PAT) for the year ended 31^st March 2023, as against
? 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 20^th Annual General Meeting held on 27^th 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 23^rd
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.

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	? 10/-	29th September 2015	17th November 2022	? 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 ?10/- each on which the dividend remained unpaid or unclaimed for last seven
consecutive years with reference to the due date of 04^th 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 encashed 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: [e-mail]

The Company has transferred the following unclaimed dividend amount and shares to IEPF as on 31^st March 2023:

Sr. No	Year	No. of shares transferred to IEPF	Category amount transferred to IEPF	Amount transferred to IEPF (in. ?)
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 31^st 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	? 3,84,228.00/-	24th November 2023
2.	15th AGM Final 2016-17	3146	53644	? 8,04,660.00/-	27th October 2024
3.	16th AGM Final 2017-18	3331	61521	? 10,45,857.00/-	05th November 2025
4.	17th AGM Final 2018-19	2661	52331	? 10,46,620.00/-	25th November 2026
5.	18th AGM Final 2019-20	3985	82643	? 24,00,105.00/-	05th November 2027
6.	19th AGM Final 2020-21	2192	43259	? 11,41,003.40/-	08th October 2028
7.	20th AGM Final 2021-22	1790	43028	? 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 31^st 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 31^st 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 15^th June 2022, 26^th July 2022, 22^nd August 2022, 18^th
November 2022 and 14^th 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 31^st 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 02^nd 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 16^th 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 17^th
September 2022.

Mr. Ved Prakash Chaturvedi vide his letter dated 11^th August 2023 has tendered his resignation as Non-Executive-
Independent Director/Public Interest Director of the Company with effect from 11^th 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 20^th Annual General
Meeting ("AGM") held on 27^th 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 20^th AGM of the Company held on 27^th September 2022.

Further, shareholders of the Company at its 20^th Annual General Meeting held on 27^th 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 06^th December 2022 and
approval of the Board of Directors Mr. Kathpalia was appointed as Shareholder Director/Non-Independent Director with
effect from 06^th 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
15^th 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 20^th July 2023, and approved in the
Board Meeting dated 29^th July 2023. Post approval by the shareholders, the appointment would be subject to approval of
SEBI. NABARD vide letter dated 19^th 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 11^th 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 22^nd 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 21^st August 2022 and 23^rd 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 22^nd August 2022. Thereafter, Mr. S. Gopalan ceased to be an
Independent External Expert in MCSGFC with effect from 06^th February 2023 due to acceptance of full time employment
elsewhere with effect from 30^th January 2023. In view of the same, Mr. S V Krishnamohan was appointed as an Independent
External Expert in MCSGFC with effect from 21^st 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 30^th 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	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 21^st June 2023.

As Mr. Sanjay Golecha, ceased to be the Chief Regulatory Officer ("CRO") of the Company with effect from 30^th 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 01^st July 2022 until further orders.

Mr. Shashank Sathe, ceased to be the Chief Technology Officer ("CTO") of the Company with effect from 28^th April 2023.
Pending appointment of CTO, Dr. Rajendra Narayanan, Chief Digital Officer was assigned interim charge of CTO portfolio
w.e.f. 24^th April 2023 until further orders.

Dr. Ajit Phanse ceased to be the Vice President - Inspection and Audit with effect from 02^nd 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 05^th January 2017
providing guidance to listed entities about various aspects involved in the Board Evaluation process ("SEBI Guidance Note")
and SEBI circular dated 05^th 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 05^th 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:

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 5^th largest Exchange by the number of commodity Options contracts
traded in CY 2022, improving from 6^th 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 ? 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 ? 1572 crore in FY 2022-23 up by 84% from ? 854
crore in FY 2021-22. It''s highest turnover (post LES) of ? 16,713 crore was observed on 24^th 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 25^th April 2022.

The average daily turnover of Gold Mini Options with Gold Mini (100 gram) Futures as underlying during FY 2022-23 was ?
132 crore.

Gold Mini Options with Gold Mini (100 gram) Futures as underlying recorded the highest volume and turnover of 1290 kg
and ? 760 crore respectively on 27^th March 2023 and recorded the highest open interest of 836 kg on 09^th February 2023
during the FY 2022-23.

Similarly, MCX Silver Options contract registered an average daily turnover of ? 355 crore in FY 2022-23 up by 163% from ?
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 ? 62 crore. The contract recorded it''s highest volume and turnover of 58 MT and ? 386.45 crore respectively on 13^th
March 2023 and recorded the highest open interest of 35 MT on 31^st 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 31^st March 2023.

Similarly, Silver (1kg) Micro contract has seen successful delivery of 97503 kg from February 2020 series onwards till 31^st
March 2023 and Silver Mini (5 Kg) has seen successful delivery of 110160 kg from June 2020 series onwards till 31^st 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. Infact, 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 03^rd March 2023 and natural gas mini
futures on 14^th March 2023.

Both the contracts garnered good interest and wide acceptance by market participants, clocking an Average Daily
Turnover (ADT) of ?191 Crores (since its launch till 31^st March 2023) in crude oil and an ADT of ?37 Crores (since its launch
till 31^st March 2023) in natural gas.

The MCX Crude oil futures contracts registered an ADT of ? 3,516 Crores in FY 2022-23. The MCX Natural gas futures
contracts registered an average daily turnover of ? 5,108 Crores in FY 2022-23, up by 6% from ?4,811 crores in FY 2021-22.

Phenomenal success has been witnessed in the options contracts. MCX Crude oil options registered an ADT of ?25,787
crores during FY 2022-23, compared to an ADT of ?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 ?1,24,952 crores on 15^th March
2023.

On similar lines, the MCX Natural gas options also saw incredible growth of 411%, after it clocked an ADT of ?5,963 crores
during FY 2022-23, as compared to ?1,168 crores in FY 2021-22. MCX Natural Gas Options contract registered its highest
turnover of ?25,283 crores on 22^nd November 2022.

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 ? 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 24^th March
2022, the exchange shall consider launching the same post go-live of its new technology platform.

Market Participants

As on 31^st 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 based¹) 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 01^st July 2022.

II. SEBI has issued the risk management framework applicable to the Electronic Gold Receipt (EGR) segment on
the recognized Stock Exchange/s.

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 MIIs 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 06^th 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 01^st 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 6^th 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 03^rd December 2018 on
Cyber Security and Cyber resilience framework for Stock Brokers / Depository Participants for the paragraph-
11,41,42 and 44. ¹

• 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

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 01^st 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 03^rd 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: [e-mail]

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 13^th
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 18^th 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 01^st November 2022.

• The validation of all KYC records (new and existing) shall commence from 01^st 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.

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 30^th September 2023,
instead of 31^st 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 30^th September 2023. Further, no new bank guarantee shall be
created by stockbrokers, clearing members from 01^st 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 27^th August 2014 as well as 11^th 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 upstreaming 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 upstreamed 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 01^st August 2023.

SECC Regulations amendment on 28^th February 2023.

The Securities and Exchange Board of India (SEBI) vide Gazette Notification No. SEBI/LAD-NRO/GN/2023/124 dated

28^th February 2023 has amended Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)

Regulations, 2018 which shall come into force on 28^th 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 31^st 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 ? 25 lakhs per client, with no member-wise limit for SEBI-registered
members declared defaulter on or after 24^th January 2018. Further, the limits of ? 2 lakhs per investor per defaulter member
and ? 200 lakhs per defaulter member shall continue to be applicable for claims against members, declared defaulter prior
to 24^th January 2018 and for non-SEBI registered members. As on 31^st March 2023, the corpus of IPF (provisional) stood at ?
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 31^st March
2023, the corpus of ISF stood at ? 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), corporates, 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 10^th October 2022 - 16^th 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 16^th October, 2022.

• On the last day i.e. on 16^th 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 overs 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 23^rd February
2023 & 09^th 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. 01^st 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 31^st 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 31^st 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 31^st July 2019 and ending on 31^st July 2022. SEBI vide
its letter dated 19^th May 2022, granted renewal of recognition to MCXCCL, to act as a Clearing Corporation for a period of
further three years commencing on 31^st July 2022 and ending on 30^th 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 Counterparty (QCCP) by SEBI. This enables the participants to apply lower risk
weightage towards their exposures to MCXCCL as per Basel II capital adequacy framework. It has membership of CCP12,
the renowned global association of Central Counterparties 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
31^st March 2023, Authorized Share Capital of MCXCCL stood at ? 30,000 lakh and issued and paid-up share capital stood at
? 23,999 lakh. The net worth as at 31^st March 2023 was ? 44,164 lakh.

Core Settlement Guarantee Fund (Core SGF)

SEBI vide circular no. SEBI/HO/CDMRD/DRMP/CIR/2018/111 dated 11^th 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 31^st
March 2023 stood at ? 58,976 lakh, of which ? 11,115 lakh has been contributed by MCX, ? 32,217 lakh has been
contributed by MCXCCL and ? 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 18^th 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. 04^th June 2018, consequent to investment of ? 1,200 lakh
comprising of 12,000,000 equity shares of ? 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 ? 3,000 lakh each comprising of 30,00,00,000
equity shares of ? 1 each equivalent to 20% stake in IIBH as on 31^st 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.

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 ? 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.

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 18^th Annual General Meeting (AGM) held on 31^st 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 18^th AGM until the conclusion of the 23^rd AGM of the Company, at a remuneration of ?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 04^th 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 ? 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 31^st 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 20^th 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 28^th 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 16^th September 2016 and 10^th January 2019
respectively. Subsequently, the Company has paid the said penalty to SEBI on 12^th April 2023.

The Management hereby clarifies that the Company has paid the penalty of '' 6,00,000/- on 12^th 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 31^st 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 31^st 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 20^th April 2020, the prices of the Crude Oil Futures Contract traded on NYMEX, that was due to expire on the next day

i.e. 21^st 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 21^st April 2020, issued by MCXCCL, the Due Date Rate of Crude Oil
Futures contract expiring on 20^th April 2020 was fixed at a negative value viz. ? (-) 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 21^st 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 24^th 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

01^st 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 31^st 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 10^th and 12^th 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 27^th 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 31^st March 2023.

There were no grants pending for vesting as at 31^st March 2023. No new grants were made during FY 2022-23.

The relevant disclosures required under the SEBI Regulations for the year ended 31^st 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:

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 31^st March 2023. The total cost incurred by the Exchange towards
these functions in FY 2022-23 was ? 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 31^st 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 31^st
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 P S Reddy

Chairman MD & CEO

(DIN: 06417704) (DIN: 01064530)

Mumbai Mumbai

29^th July 2023 29^th July 2023

---

Mar 31, 2018

DIRECTORS'' REPORT

Dear Shareholders,

The Board of Directors is pleased to present the Sixteenth Annual Report on the business and operations of your Company, along with the Audited Statement of Accounts and the Auditors'' Report for the financial year (FY) ended March 31, 2018 (''year under review''), highlights of which are given below:

FINANCIAL RESULTS

(Rs, in lakh, except EPS)

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Total Income	34,620	37,587	35,186	37,634
Total Operating Expenditure	18,552	17,968	18,798	17,981
Profit before Interest, depreciation, exceptional items and tax	16,068	19,619	16,388	19,653
Less: Depreciation	1,666	1,857	1,666	1,857
Less: Interest	-	20	4	20
Profit after exceptional items but before tax	14,402	17,742	14,718	17,776
Less: Provision for tax	3,767	5,115	3,882	5,117
Profit after tax	10,635	12,627	10,836	12,659
Add/(Less): Other Comprehensive Income (net of tax)	265	(1,852)	124	(1,859)
Total Comprehensive Income for the period (Comprising Profit and Other Comprehensive Income for the period)	10,900	10,775	10,960	10,800
Earnings per share (EPS) a. Basic (?)	20.91	24.84	21.31	24.90
b. Diluted (?)	20.91	24.83	21.31	24.89

The Ministry of Corporate Affairs (MCA), vide its notification dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Your Company falls within its ambit and in compliance with the same, the Company has, effective April 01,2016 (transition date being April 01, 2015), adopted Ind AS prescribed under Section 133 of the Companies Act, 2013 read with the relevant Rules thereunder; and the financial statements have been prepared in accordance with Ind AS.

GLOBAL ECONOMY AND COMMODITY MARKET

The year 2017 was a turning point for the global economy. While 2017 saw an end to the decline in the price of most commodities, favourable weather conditions capped the price rise of a number of agricultural crops as their supply increased. Bullion witnessed renewed 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 its benchmark interest rates. However, in the final weeks of the year gold recovered most of its previous decline in price consequent to the U.S. central bank reiterating that a gradual 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 supply following environmental concerns in large producing nations like China and Philippines.

In general, while international prices of the commodities were firm on a yearly basis, appreciation of the rupee capped rupee-denominated commodity prices. Given the backdrop of global commodity market and the Indian scenario, the operating environment for your Company during the year was challenging.

FINANCIAL HIGHLIGHTS

The average daily turnover decreased from Rs, 22,560 crore in FY 17 to Rs, 21,193 crore in FY 18 (single side) while Average Realization Rate (ARR) increased from Rs, 1.99 per lakh to Rs, 2.22 per lakh. The increase in ARR was on account of the full year impact of the revision in the transaction charges which became effective from October 01, 2016. The total turnover of commodity futures traded on your Exchange stood at Rs, 53.83 lakh crore in FY 18 as against Rs, 58.66 lakh crore during FY 17, a decrease of 8.23%. The market share of your Company 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 FY 18 stood at 2,060 lakh as compared to 2,220 lakh for FY 17, a decrease of 7.21%.

For FY 18, your Company''s (standalone) total income stood at Rs, 34,620 lakh as compared to Rs, 37,587 lakh during FY 17. This was mainly attributable to decrease in other income from Rs, 11,643 lakh to Rs, 8,636 lakh, owing to mark to market losses arising out of increase in interest rates. The 10 year G Sec yield saw a steep run up from 6.69% at the beginning of the year to end at 7.40% on March 31, 2018. Your Company has investments in certain long duration Mutual Fund schemes, the yield on which was adversely affected due to mark to market losses. Further, your Company had recognized a gain on fair valuation of Bonds, amounting to Rs, 1,563 lakh in the previous financial year which increased the variance as compared to FY 17. The operating income during the year under review was Rs, 25,984 lakh as against Rs, 25,944 lakh in FY 17. The net profit after tax for the year ended March 31, 2018 stood at Rs, 10,635 lakh as against Rs, 12,627 lakh in FY 17. The net worth (including Settlement Guarantee Fund) as at March 31, 2018 stood at Rs, 155,687 lakh.

SHARE CAPITAL

There has been no change in the share capital of your Company during the year under review. As on March 31, 2018, the paid-up share capital of your Company stood at Rs, 5,100 lakh comprising 50,998,369 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 any shares (including sweat equity shares) to its employees under any scheme save and except transfer of shares by the ESOP trust to eligible employees pursuant to the Employee Stock Option Scheme (ESOP 2008).

TRANSFER TO RESERVES

For the year ended March 31, 2018, your Directors do not propose to transfer any amount to the General Reserve. An amount of Rs, 97,104 lakh is proposed to be retained as surplus in the statement of Profit and Loss Account under the heading ''Reserves and Surplus''.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the SEBI Listing Regulations, 2015), your Company has formulated a Dividend Distribution Policy which is attached as Annexure I to this Report. The same is also available under the we blink: https://www.mcxindia.com/docs/ default-source/investor-relations/corporate-governance/dividend distribution policy re.pdf?sfvrsn=2

As per the Dividend Distribution Policy of the Company, the Board, considering various parameters 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 profits after tax (PAT) every financial year on the standalone financials.

Considering the financial results for FY 18 and particularly in view of the fact that the Company has adequate existing cash/cash equivalent at its disposal, with no immediate cash outflow requirement coupled with no specific investment in the horizon, your Directors have recommended, for the financial year ended March 31, 2018, a dividend of Rs, 17 (170%) per equity share on a face value of Rs, 10 per share, aggregating Rs, 8,670 lakh, subject to the approval of shareholders at the ensuing Annual General Meeting (AGM). The outgo on account of the proposed dividend of 170% (PY 150%) and tax thereupon to be paid by the Company aggregates to Rs, 10,435 lakh (including the Dividend Distribution Tax of Rs, 1,765 lakh), being a payout of 98.12% of the profit after tax (PAT) for the year ended March 31, 2018 as against Rs, 9,207 lakh (being a payout of 73% of PAT) for FY 17.

DEPOSITS

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

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013

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

BUSINESS OPERATIONS

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

MCX crude oil futures, MCX crude oil mini futures and MCX natural gas futures were amongst the top 20 commodity futures and options contracts in the global ranking of commodity futures contracts in Calendar Year 2017 (CY17). (Source: FIA Annual Volume Survey March 2018).

Your Company, in its endeavor to explore and exploit the opportunities for unlocking the full potential of the Indian commodity derivatives market, launched many new contracts during FY 18 under different segments. MCX became India''s first exchange to launch the much-anticipated Option Contracts, on introduction of Options on Gold (1 Kg) Futures. The product was launched on October 17, 2017, at an event in New Delhi by Shri Arun Jaitley, Hon''ble Union Finance Minister. Since its launch, the total volume traded in Gold Option in FY 18 was 34,752 lots, amounting to an aggregate notional turnover of Rs, 10,354 crore. Significantly, Union Budget for FY 2018-19 reduced the transaction taxes on exercise of commodity options from 0.125 per cent to 0.0001 per cent (on settlement value) w.e.f. April 1, 2018, which, we believe, would encourage hedgers and other participants to actively 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 the first time ever that an alloy is being traded in the form of a futures contract on any domestic exchange.

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

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

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

Your Exchange joined hands with Confederation of Indian Textile Industry (CITI) and Northern India Textiles Mills'' Association (NITMA) to engage in various education initiatives with their members and other relevant stakeholders of the industry. Further, your Company signed an Memorandum of Understanding (MOU) with Mahindra Agri Solutions Ltd., a wholly owned subsidiary of Mahindra and Mahindra, to provide agriculture related price information. The information is available on their recently launched mobile application- ''MyAgriGuru.''

In order to seamlessly integrate with the global commodities ecosystem, MCX continues to have strategic alliances with leading international exchanges viz. Mozambique Commodities Exchange (BMM), Singapore Diamond Investment Exchange, CME Group, London Metal Exchange (LME), Dalian Commodity Exchange (DCE), and Taiwan Futures Exchange (TAIFEX). MCX has also tied-up with various trade bodies, corporate, educational institutions and R&D centres across the country to improve trade practices, increase awareness, and facilitate overall improvement of the commodity market.

REGULATORY DEVELOPMENTS

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

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

The Goods and Service Tax (GST) came into effect on July 01, 2017, amalgamating a large number of Central and State level taxes into a single tax. GST has helped in mitigating double taxation and is paving the way for a common national market. Importantly, a single tax across the nation for a commodity, has significantly enhanced the relevance of exchange-discovered prices to the entire ecosystem and can increase reach of delivery of derivative 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 Exchange of India Limited (NSE) introduced trading on Futures & Options contracts on the securities of MCX w.e.f. April 28, 2017.

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

iii) The Product Design and Risk Management Framework for Options on Commodity Futures was issued on June 13, 2017. It provides for the eligibility criteria for selection of underlying commodity futures for options and the product design for options on commodity futures.

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 Commodity Derivatives was issued after due consultation with various stakeholders and on the basis of recommendations of Commodity Derivatives Advisory Committee (CDAC). The framework requires categorization of commodities into ''Broad'', ''Narrow'' and ''Sensitive'', based on which the numerical value of overall client level open position limits of agricultural commodities is determined.

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

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

viii) Guidelines were issued for Liquidity Enhancement Scheme (LES) in Commodity Derivative 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), to permit trading of commodity derivatives and other segments of securities market viz. equity, equity derivatives, debt and currency derivatives segment, etc. on single exchange w.e.f. October 1, 2018.

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

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

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

RISK MANAGEMENT AND RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy for managing different risks including Regulatory & Compliance risks, Technology risks, Business risks, Operational risks, Credit risks and Market risks. Also, your Company has complied with SECC Regulations relating to risk management and has constituted a Risk Management Committee for, inter-alia, identification, measurement and monitoring risk profile of the Exchange. As on March 31, 2018, the said Committee comprised of two Independent Directors, one Shareholder Director and an Independent External Expert. Your Company has successfully launched option contracts with a unique risk management feature of providing Sensitivity Report and levy of Devolvement Margins to options positions devolving into futures positions. This was a first of its kind initiative implemented in the Indian markets as a risk management solution. Your Company continues to implement robust risk management systems with margins being computed multiple times a day in order to minimize the default risk. During the year under review, there was no instance of member default on account of volatility observed in the markets.

As a part of risk mitigation plan for avoiding business disruption, your Company has focused on strengthening its core technology infrastructure so that there is no single point of failure thereby ensuring uninterrupted services. Your Company has a Disaster Recovery (DR) Site at GIFT city in Gandhinagar, Gujarat which has a robust infrastructure and accessibility. Your Company successfully conducted live trading from DR site on April 03, 2017. Further, your Company has Near Site in Mumbai with synchronous data replication to achieve zero data loss in case of any eventuality. Your Company has also strengthened its Business Continuity Plan and DR initiative and regularly conducts mock drills to test readiness 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 your Company are provided in the Management''s Discussion and Analysis which forms part of this Annual Report.

INVESTOR (CLIENT) PROTECTION FUND (IPF)

Your Company has established Multi Commodity Exchange Investor (Client) Protection Fund (IPF), to protect and safeguard the interest of investors (clients) by compensating eligible/legitimate claims on account of default by any member of the Exchange. The interest income on investment of surplus funds of IPF is used for imparting education to investors'' (clients), conducting awareness programs, undertaking research activities or such other programs as may be specified by SEBI. As on March 31, 2018, the corpus of IPF stood at '' 17,070 lakh (provisional).

SEBI with the objective to align with the practices in securities markets, issued comprehensive guidelines on June 13, 2017 for Investor Protection Fund, Investor Service Fund and its related matters for National Commodity Derivatives Exchanges applicable from July 01, 2017. The said Circular, inter-alia, provided modification w.r.t. the constitution and management of the IPF, contribution to the IPF, determination of legitimate claims, power of the Exchange to fix IPF compensation limits in consultation with the IPF Trust, etc.

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

INVESTOR SERVICE FUND (ISF)

Pursuant to SEBI circular dated June 13, 2017, your Company has set up an Investor Service Fund (ISF), for providing basic minimum facilities at various Investor Service Centres, as mentioned in the said Circular. SEBI has permitted utilization of 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 respective exchanges, cost of training of arbitrators etc. In addition to above, the corpus may be utilized in other manner as prescribed/permitted by SEBI in the interest of investors from time to time.

In terms of the said Circular, at an initial stage, your Company has contributed Rs, 10 lakh towards setting up the ISF. Subsequently, your Company has transferred 1% of the turnover 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, SEBI has permitted utilization of interest on IPF for activities of ISF for a period of 3 years starting from April 01, 2018.

SETTLEMENT GUARANTEE FUND (SGF)

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

Settlement related penalties and fines amounting to Rs, 24 lakh (net of tax) and income of Rs, 1,002 lakh (net of tax) earned from earmarked SGF investments were credited to the SGF during the year. After effecting the aforesaid transfers, the cash component of SGF stood at Rs, 18,060 lakh as at March 31, 2018.

WAREHOUSING

To cater to the storage requirements of various members of the Exchange and their respective constituents/depositors, who are willing to store goods and give delivery on the Exchange platform, your Company has made necessary warehousing and logistics arrangements with Warehouse Service Providers (WSP)/Vault Service Providers (VSP). Your Exchange co-ordinates with WSPs/VSPs and undertakes accreditation of the warehouses/vaults, audit and inspection of warehouses/vaults for safe storage and preservation of goods deposited by various business participants for delivery on its platform. From FY 18, the Exchange has started surprise audits of warehouses based on defined criterion. Your Company has empaneled independent audit agencies to carry out third party audits as per Regulatory guidelines. Currently, your Company operates through three WSPs for facilitating physical deliveries in agricultural commodities, viz. Origo Commodities India Private Limited, Yamada Logistics Private Limited and Navjyoti Commodity Management Services Limited. As on March 31, 2018, your Exchange has accredited 29 warehouses of these three WSPs. Out of the 29 warehouses, 26 warehouses are registered with the Warehousing Development & Regulatory Authority (WDRA), 2 warehouses for metals 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 in Kerala for Cardamom, Kadi and Deesa in Gujarat for Castor Seed, Barabanki and Chandausi in Uttar Pradesh for Mentha Oil, Kochi in Kerala for Black Pepper, Bhiwandi in Maharashtra for Aluminium,

Copper, Lead, Nickel and Zinc, Kandla for Crude Palm Oil & RBD Palmolein and Jamnagar in Gujarat for Brass. Your Company has put in place a detailed WSP Policy and a Warehouse Inspection Policy in compliance with the SEBI revised warehousing norms for agricultural and agricultural processed commodities traded on the National Commodity Derivatives Exchanges. During the year, the highest deliverable quantity of agricultural commodities 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) - Rs, 26,569.3 lakh.

- Silver (including all of its variants) - Rs, 14,470.1 lakh.

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

TRAINING AND EDUCATION

The Training and Education Division has the following key objectives:

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

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

To achieve the said objectives, your Company in FY 18, registered 891 candidates for the MCX Certified Commodity Professionals (MCCP) examination and conducted 10 MCCP workshops. In conjunction with the Business Development and the Product teams, the Company conducted over 100,000 man hours of trainings for traders, farmers, students, bankers, teachers, etc. The team conducted 125 programs on sensitizing the community on Options in Commodities. The team has hosted and trained 3 International delegations, 10 student and corporate delegations respectively, to help them understand the operations of a commodity exchange. Training and Education department has conducted over 50 awareness programs on commodity futures and 4 Faculty Development Programs. There are now five institutions that are offering commodity asset class as part of their syllabus. Also, your Company has entered into MOUs with 4 more Educational Institutions during the year. The Team introduced webinar based training and delivered 165 basic option programmes. Sessions were also conducted in vernacular language. Your Company aims to increase its annual training sessions in the coming year to new participants from the banking and mutual fund segments.

SUBSIDIARY

Multi Commodity Exchange Clearing Corporation Limited: MCXCCL, a wholly-owned subsidiary of your Company, was set up for having a separate clearing house to provide services 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 Rs, 1,000 lakh to Rs, 15,000 lakh and your Company infused a capital of Rs, 10,000 lakh in MCXCCL to 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 Rs, 10,600 lakh. Further, MCXCCL has not commenced its business yet.

The Board of your Company has approved transfer of its Clearing & Settlement function to MCXCCL. Also, SEBI vide letter no. CDMRD/DEA/OW/2017/17801/1 dated July 31, 2017 has granted in-principle approval for a period of one year, to MCXCCL to act as a Clearing Corporation subject to certain conditions as mentioned in the said letter.

Your Company is in the process of executing various agreements with MCXCCL as approved by 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 to provide a platform for transacting, clearing and settlement of trades in small and medium enterprises segment is under the process of members'' voluntary winding up.

The requisite formalities for application of winding up of the company has been completed. The Registrar of Companies, on May 30, 2017, has approved the Liquidators statement showing the manner in which the winding up has been conducted and the property of SME has been disposed off. Also, "No Dues" certificate has been received from the Income Tax Department and the same has been filed with the Assistant Official Liquidator, High Court, Bombay on March 09,

2018. The Official Liquidator is expected to issue 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 ceased to be the subsidiary or associate company of your Company. Further, neither the Managing Director & CEO nor the Whole-time Director of your Company receives any remuneration or commission from its subsidiary.

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

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 wholly owned subsidiary company are available on our website under the we blinkhttps://www.mcxindia.com/investor-relations. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary company may write to the Company Secretary at the Company''s registered office. Copies of the annual accounts of your Company and of its subsidiary company would be kept at the registered office of your Company for inspection by any shareholder.

CONSOLIDATED FINANCIAL STATEMENT

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

MANAGEMENT''S DISCUSSION AND ANALYSIS STATEMENT

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

COMMITMENT TO QUALITY

Commitment to quality is necessary for enabling excellence in products, services offered, optimization and de-risking. Your Company continues to monitor and maintain its effective and well-crafted Quality Management Framework (QMF). QMF is aligned to the business objectives of the Exchange and ensures that your Company is focused on maintaining Quality Centric Approach towards its members and clients. Over the years, your Company has evolved robust processes and strives to improve them continuously. Your Company continues to comply with international management standards, and has successfully transitioned ISO 9001 to its latest version. This showcases your Company''s dedication and commitment towards sustaining a customer centric and robust Quality and Security Management System.

INFORMATION SECURITY

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

RESEARCH AND DEVELOPMENT

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

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

The iCOMDEX series includes a composite index consisting of 11 commodities; sector indices for bullion and base metals, and individual commodity indices for gold, copper and crude oil. These indices have been designed to be tracked by derivatives and exchange traded funds, to allow investors to monetize views and manage investment risk. With SEBI beginning to open up commodities derivatives to institutional investors, these indices can be leveraged to benchmark performance and build products. Commodity index-based products, when allowed, would allow market participants to trade and invest in commodities on a short 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 the economic benefits of futures market to the stakeholders in the cardamom value chain and to understand the changes in the cardamom ecosystem since the advent of futures contract. The study found that futures prices were used by the various stakeholders as a benchmark for taking informed decisions related to buying, selling or holding of cardamom. Based on the survey and study it has been concluded that cardamom futures has the potential to channelize market related information, make futures prices visible and empower the various stakeholders to take informed decisions to improve their economic returns.

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

AWARDS

The initiatives taken by your Company for growth and market development have been recognized at various fora by several institutions. Your Company was honoured with the ''Best Bullion Exchange'' Award at the Bullion Federation Global Convention organized by the Bullion 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 ''Best Commodity Exchange of India'' by PHD Chamber Of Commerce & Industry and as ''India''s Leading Commodity Exchange and Introducing New Products in the Commodity Derivatives Market'' by Assocham on December, 2017. Further your Company was also awarded as the ''Best Commodity Exchange'' by Indian Bullion & Jewellers Association on March 2018.

ENVIRONMENTAL RESPONSIBILITY

Given the nature of its operations, your Company has a very low impact on the environment. Notwithstanding, it is committed to minimizing its environmental impacts through efficient use of natural resources, including electricity, which is the key touch point of the Exchange''s technology-driven business. Your Company adheres to an effective Environmental Policy. Your Company cleared the ISO 14001:2004 surveillance audit, and continues to monitor its Environment Management Plan, which is developed on the basis of the Environment Review conducted annually to assess the impact of the Company''s activities. Your Company has also developed an E-Waste Policy for the safe disposal of e-waste from its premises. Its tie-up with authorized e-waste recyclers helps it to dispose its e-waste in an eco-friendly manner. The e-waste disposal is in turn minimized through best practices in maintenance and re-use of resources.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

The CSR Committee steers the CSR activities of your Company. The CSR Policy, formulated in accordance with the Companies Act, 2013 (as amended from time to time), guides the Company to serve the society. The CSR Policy and initiatives adopted by the Company on CSR during FY 18 are available at the web link https://www.mcxindia.com/about-us/csr.

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

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

The activities of the Gramin Suvidha Kendra (GSK) programme are directed to sub serve the needs of the farmers by making them aware of the new initiatives, techniques, know-how, etc., which leads to enhanced yield in the agricultural produce. MCX supports kitchen garden programme by encouraging women and other members of the farmer community to have a sustainable/alternate livelihood option by growing vegetables, fruits, etc. in their 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 part of this Report as Annexure III. Going forward, your Company shall endeavor to undertake projects in accordance with the Policy to meet its CSR requirement.

BUSINESS RESPONSIBILITY REPORT

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

As your Company falls within the top 500 listed Companies, the said Regulations are applicable 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 the broad scope of the initiatives, to be undertaken, to best sub serve the interest of all the Stakeholders.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return of your Company pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is attached as Annexure IV to this Report.

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 Listing Regulations, 2015 and the certificate from a Practicing Company Secretary regarding compliance with Corporate Governance norms, forms part of this Annual Report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013.

MEETINGS OF THE BOARD

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

ETHICS AND GOVERNANCE POLICIES

Your Company adheres to the highest 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 Code of Conduct and Code of Ethics, Code of Conduct for Prevention of Insider Trading, 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, Dividend Distribution Policy, etc.

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 behavior. 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 Listing Regulations, 2015, the Board of Directors have implemented a vigil mechanism through the adoption of Whistle Blower Policy. For further details, please refer report on Corporate Governance forming part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Your Company has formulated the policy on materiality of related party transactions and dealing with related party transactions. The same is uploaded on the website of your Company and may be accessed at the web link: https://www.mcxindia.com/docs/default-source/investor-relations/corporate-governance/amended_policy_on_related_ party_transactions_05may2016.pdf?sfvrsn=2

All related party transactions entered into by your Company are in the ordinary course of business and at arm''s length pricing basis, except the transaction with MCXCCL, its wholly owned subsidiary, which is not in the ordinary course of business. Also, prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in ordinary course of business and are at arm''s length. All the related party transactions entered into by your Company during the year under review, were placed and approved by the Audit Committee and/or by the Board, as applicable, in accordance with the Companies 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 credit penalties, 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 by the Trustees, who are appointed as per the provisions of the Trust Deed and the Rules, Bye-Laws and Regulations of the Exchange. The transactions with the MCX IPF Trust are regulated in accordance with the regulatory requirements/guidelines issued from time to time and is independently managed. Except for complying with the regulatory requirements, your Company does not have any pecuniary relationship with MCX IPF Trust. In view of clarification issued by Institute of Chartered Accountants of India, MCX IPF Trust was treated 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 a related party w.e.f. July 01, 2017.

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 to be reported under Section 188 (1) of the Companies Act, 2013 is appended in Form AOC - 2 as Annexure V to this Report.

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.

DIRECTORS

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 which 6 (six) are Public Interest Directors, 5 (five) are Shareholder Directors and 1 (one) Managing Director.

"Public Interest Director" under the SECC Regulations 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 SEBI, is in conflict with his role, and accordingly such directors are considered as Independent Directors for adhering compliance with the provisions under the SEBI Listing Regulations, 2015 and Companies Act, 2013.

Your Company has received confirmations from the respective Public Interest Directors to the effect that each of them meets the criteria of independence as prescribed under Regulation (16)(b) of the SEBI Listing Regulations, 2015 and Section 149(6) of the Companies Act, 2013. 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.

Further, all the Directors have confirmed that they are ''Fit and Proper'' in terms of the SECC Regulations. 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 Listing Regulations, 2015 from all the Directors as applicable.

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

In terms of SEBI approval, Mr. Shankar Aggarwal (DIN: 02116442) was appointed as a Public Interest Director on the Board of the Company w.e.f. October 01, 2017 to fill in the vacancy arising out of the completion of tenure of Ms. Pravin Tripathi (DIN: 06913463) as a Public Interest Director w.e.f. close of business hours on August 11, 2017.

Mr. Amit Goela (DIN: 01754804) and Ms. Padma Raghunathan (DIN: 07248423), Shareholder Directors of the Company, were liable to retire by rotation at the 15th AGM of the Company held on August 22, 2017 and being eligible offered themselves for re-appointment. The resolutions for their re-appointment were passed by the shareholders with requisite majority.

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

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

KEY MANAGERIAL PERSONNEL

Consequent to the expiry of the term of Mr. Ajay Puri as the Company Secretary of the Company, on attaining the age of sixty, being the age of retirement, he ceased to be a Key Managerial Personnel (KMP) w.e.f. June 30, 2017. Mr. Ashwin Patel was appointed as the Company Secretary and identified as a KMP w.e.f. July 01, 2017.

PERFORMANCE EVALUATION OF THE BOARD

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

AUDIT COMMITTEE

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 accepted any recommendation of the Audit Committee.

STATUTORY AUDITOR AND THEIR REPORT

M/s. Shah Gupta & Co., Chartered Accountants (Firm Registration No. 109574W) were appointed as Statutory Auditor by the shareholders at their 13th AGM held on September 29, 2015 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 May 07, 2018, the requirement of ratification of appointment of Statutory Auditors by members at every AGM has been omitted. Accordingly, the same shall not form part of the Notice from next AGM onwards.

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.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

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

In accordance with Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report for the financial year ended March 31, 2018 is annexed as Annexure VII to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROL AND THEIR ADEQUACY

The Board of Directors confirms that your Company has laid down set of standards, processes and structure which enables to implement Internal Financial controls across the organization with reference to Financial Statements and that such controls are adequate and are operating effectively. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

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.

HUMAN RESOURCE DEVELOPMENT

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

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

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

Additionally, Exchange undertakes various staff welfare activities to strengthen unity, break 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, the Exchange launched employee engagement survey - with focus on Workplace, Values, Culture, Career & Compensation. Clear ownership & real time analytics dashboards was ensured 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 with the requirements of "The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013" Also, your Company has an Internal Complaints Committee to redress complaints received regarding sexual harassment. No complaints were received during the financial year 2017-18 in relation thereto. Further, your Company has also imparted awareness training to all employees on the ''Anti-Sexual Harassment Policy during the year under review.

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

PARTICULARS OF REMUNERATION

Your Company has adopted a well-defined Nomination & Remuneration Policy for Directors, Key Managerial Personnel and other employees which forms part of this Report as Annexure IX.

The ratio of the remuneration of each Director 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, forms part of this Report as Annexure X.

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 Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, a statement containing particulars of employees as stipulated therein also forms part of this Report as Annexure XI.

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, not being energy intensive, takes 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.

The steps taken for Conservation of Energy are given below:

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

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

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

d. Strict implementation and monitoring of equipment on/off schedule, helps in reducing wastage of energy.

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

- Maintaining adequate capacitor bank for non-linear electrical loads like air-conditioning plant, pumps and Heat Recovery System, thereby reducing the drawing of extra energy and improving power factor.

- Preventive maintenance of air conditioning system on scheduled basis and ensuring that the heat sensors and electronic components are properly functioning for compressors to achieve variable compression linked to heat levels for reduction in power consumption.

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, Rs, 3 lakh were invested for installation of LED lights at the Data Centre and in all conference rooms.

B) TECHNOLOGY ABSORPTION:

(i) The efforts made towards technology absorption:

Implementation of hyper converged infrastructure

Your Company has moved its enterprise setup and peripheral systems on hyper converged infrastructure and achieved high availability and better disaster recovery capability. Servers have been replaced with newer technology which are more energy efficient enabling the 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 time prices of contracts being traded on Exchange in addition to charting, market statistics, indices, education relation information.

Automation of switchover/switchback between Primary & DR site

MCX has successfully deployed automated process, to the extent possible, for switch-over from Primary site to Disaster Recovery Site, with reduced migration time duration.

Cyber Security Framework

Your Company lays special emphasis on improvement in its cybersecurity framework and information security management systems. There is an ongoing process to strengthen cyber security under the guidance from market regulator and other national agencies to provide increased 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 information technology systems, with the over-arching goal of achieving higher capacity and lower latency, improving market efficiency and transparency, enhancing user access and providing flexibility for future business growth and market needs.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution:

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

(iii) In case 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) Your Company has incurred Rs, 22.84 lakh on Research and Development during the year under review.

C) FOREIGN EXCHANGE EARNINGS/OUTGO DURING THE YEAR UNDER REVIEW

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

UPDATES POST MARCH 31, 2018:

i. Consequent to the cessation of Mr. Narendra Kumar Ahlawat as the Chief Regulatory Officer (CRO) and a KMP w.e.f. April 01 2018, the Board appointed Mr. Girish Dev as the CRO of the Company and also designated him as a KMP w.e.f. April 01, 2018 and April 28, 2018 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 01, 2018, Commodity Transaction Tax (''CTT'') is applicable on options on commodity derivatives in lieu of Securities Transaction Charges (STT).

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

v. Your Company participated in the rights issue by MCXCCL and further infused an additional capital of '' 4,399 lakh to meet the requirements as stipulated by SEBI for a clearing corporation.

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

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

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 Rs, 1,200 lakh in 1,20,00,000 equity shares of Rs, 10 each of CCRL, equivalent to 24% stake in CCRL.

x. Status of compounding applications:

During FY 15, your Company had filed nine applications seeking compounding of offence of earlier years, under Section 621A of the Companies Act, 1956, against the Show Cause Notices received from the Registrar of Companies, Mumbai, Maharashtra. As on date of this Report, compounding has been effected in respect of 8 applications, 3 by Regional Director, 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 '' 7,43,600/- on the Company and the amount has since been paid. In case of one compounding application towards violation of Section 301 of Companies Act, 1956, the Regional Director, Western Region, Mumbai, due to lack of jurisdiction, has referred back the matter to the Registrar of Companies, Mumbai for sending report to NCLT for appropriate action. The Company had received the copy of the Orders passed by the Regional Director, Western Region Mumbai, in respect 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 Orders passed by NCLT in respect of the 5 applications compounded under Section 220, Section 372A, Section 372A(5), Section 224(8) and Section 297 of the Companies Act, 1956 in June 2018. The status of Compounding Applications as at March 31, 2018 is given in the Extract of the Annual Return in Annexure IV.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134 of the Companies Act, 2013, your Directors confirm that:

a) i n the preparation of the annual accounts for the year ended March 31, 2018, 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 judgments 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 March 31, 2018 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.

ACKNOWLEDGMENTS

The Board of Directors wish to place on record their sincere gratitude for the valuable guidance and continued support extended by the Securities and Exchange Board of India, Reserve Bank of India, Stock Exchanges, Ministry of Corporate Affairs, other government authorities, Banks and other stakeholders. Your 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

Saurabh

Chandra Chairman

(DIN: 02726077)

Mumbai July 20, 2018

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Mar 31, 2017

Dear Shareholders,

The Board of Directors is pleased to present the Fifteenth Annual Report on the business and operations of your Company along with the Audited Statement of Accounts and the Auditors'' Report for the financial year (FY) ended March 31, 2017 (''Year under review''), highlights of which are given below:

FINANCIAL RESULTS

(Rs,in Lakh)

Particulars	Standalone		Consolidated
	2016-17	2015-16 |	2016-17	2015-16
Total Income	37,587	35,140	37,634	35,184
Total Operating Expenditure	17,967	15,965	17,981	15,966
Profit before Interest, depreciation, exceptional items and tax	19,620	19,175	19,653	19,218
Less: Depreciation	1,857	2,459	1,857	2,459
Less: Interest	20	30	20	30
Profit before exceptional items and tax	17,742	16,686	17,776	16,729
Less: Exceptional Items	-	563	-	563
Profit after exceptional items but before tax	17,742	16,123	17,776	16,166
Less: Provision for tax	5,115	4,746	5,117	4,703
Profit after tax	12,627	11,378	12,659	11,463
Less: Other Comprehensive Income (net of tax)	1,852	4,670	1,859	4,573
Total Comprehensive Income for the period (Comprising Profit and Other Comprehensive Income for the period)	10,775	6,708	10,800	6,890
Earnings per share
a. Basic (?)	24.84	22.39	24.91	22.56
b. Diluted (''	24.83	22.38	24.89	22.55

The Ministry of Corporate Affairs (MCA), vide its notification dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Your Company falls within its ambit and in compliance with the same, the Company has, effective April 01, 2016 (transition date being April 01, 2015), adopted Ind AS prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules thereunder.

RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS

Several international and national events occurred during the course of the year under review, which had significant impact on various segments of the commodities market including your Company. Prices of Bullion went up early in the year, but subsided as the year progressed. While Brexit, global economic concerns and loose monetary policy of major central banks helped gold prices rise, the US Fed''s hike in interest rates and the US election subdued prices of the yellow metal. The demonetization of higher currency notes in India, coupled with low official gold purchases by the Reserve Bank of India (RBI), traditionally one of world''s largest buyers of the metal, further aided the decline in gold prices. As for Crude Oil, the understanding between OPEC and some non-OPEC countries on oil supply cuts led to volatility in its prices. Further, mine closures, improved demand sentiments from China and US President - Donald Trump''s plans to rebuild American infrastructure helped base metals prices to rise.

Given the backdrop of the global market, the operating environment for your Company during the year was challenging. However, the average daily turnover during FY 17 was Rs,225.60 billion (single side) as against Rs,219.23 billion during FY 16, with a total of 0.28 million clients trading on the Exchange. The total turnover of commodity futures traded on your Exchange stood at Rs,58,656.61 billion in FY 17 as against Rs,56,341.94 billion during FY 16, registering an increase of 4.11%. The market share of your Company amongst all national exchanges offering commodity derivatives trading increased to 90.37% in FY 17 from 84.30% in FY16. Your Company has national reach with 689 members who have, applied for SEBI registration, having 49,791 Authorized Persons, operating through 6,31,270 terminals including Computer to Computer Link (CTCL) across 1,284 cities / towns across India as at March 31, 2017. The number of contracts traded on your Exchange in FY17 stood at 222 million as compared with 234 million for FY16, a decrease of 5.13%.

For FY17, your Company''s (standalone) total income stood at Rs,37,587 Lakh as compared to Rs,35,140 Lakh during FY16, mainly attributable to increase in Average Daily Turnover (ADT) from Rs,21,923 crores to Rs,22,560 crores and increase in Average Realization Rate (ARR) from Rs,1.80 to Rs,1.99. The operating income during the year under review was Rs,25,944 Lakh as against Rs,23,493 Lakh in FY16. Other income during FY17 was Rs,11,643 Lakh as against Rs,11,648 Lakh in the previous fiscal. The net profit after tax for the year ended March 31, 2017 stood at Rs,12,627 Lakh as against Rs,11,378 Lakh in FY16. The net worth (including Settlement Guarantee Fund) as at March 31, 2017 stood at Rs,1,52,927 Lakh.

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

Your Company is committed to explore and exploit all opportunities for unlocking the full potential of the Indian commodity derivatives market. During the year under review, your Company commenced futures trading in Castor Seed. With the launch of new contract, your Company has expanded the existing basket of agricultural products being traded on its platform.

Further, the Exchange introduced a facility of disseminating Cotton Prices in Candy in order to cater to participants who want information of Cotton prices in Candy. The Exchange made upward revision in its fee charged to members w.e.f. October 1, 2016.

MCX crude oil futures, MCX crude oil mini futures, MCX natural gas futures and MCX silver micro futures were amongst the top 20 commodity futures and options contracts in the global ranking of commodity futures contracts in Calendar Year 2016 (CY16). (Source: FIA Annual Volume Survey March 2017).

With an aim to seamlessly integrate with the global commodities ecosystem, MCX has entered into strategic alliances with Mozambique Commodities Exchange (BMM) and Singapore Diamond Investment Exchange, in addition to the existing alliances with leading international exchanges such as CME Group, London Metal Exchange (LME), Dalian Commodity Exchange (DCE), and Taiwan Futures Exchange (TAIFEX). MCX has also tied-up with various trade bodies, corporates, educational institutions and R&D centres across the country. These alliances enable your Company in improving trade practices, increasing awareness, and facilitating overall improvement of the commodity market.

REGULATORY DEVELOPMENTS

Post the merger of erstwhile regulator Forward Markets Commission (FMC) with Securities and Exchange Board of India (SEBI), all rules, directions, guidelines, instructions, circulars, etc. issued by FMC or the Central Government were to remain in force for a period of one year from September 28, 2015 or till such time as notified by SEBI. Accordingly, during the year under review, SEBI, with its enhanced powers, brought several reforms strengthening the operational framework and risk management in commodity exchanges, making the commodities market better in terms of integrity and help it going forward. The merger of regulators has changed the landscape of commodity derivatives market in India, paving the path for introduction of new products in commodity derivatives market, and participation of institutions such as banks, mutual funds and insurance companies, which is likely to broad base the commodity market and your Company from a single product Company to be a multi-product Company, thereby further de-risking its business model.

The presence of SEBI as the market regulator is expected to help further increase the confidence in the market and trust amongst all the financial and commodity markets ecosystem, stakeholders and make the commodity markets more vibrant and build a level-playing field across both the commodities and securities markets.

The Regulatory developments, inter alia, includes the following:

i) Pursuant to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2017 effective from January 12, 2017, SEBI permitted foreign entities like stock exchange, depository, banking and insurance company and commodity derivatives exchange to acquire or hold up to 15% of the paid up capital of a recognized stock exchange.

ii) The provisions of Annual System Audit of Stock Brokers /Trading Members of Stock Exchanges were made applicable to the Members of National Commodity Derivatives Exchanges in order to bring stability and integrity in commodities market.

iii) Trading in commodity derivatives at stock exchanges operating in International Financial Services Centre (IFSC) was permitted.

iv) Pursuant to the stock selection criteria prescribed by SEBI vide its circular dated December 16, 2016, National Stock Exchange of India Limited (NSE) introduced trading on Futures & Options contracts on the securities of MCX w.e.f. April 28, 2017.

v) Also, the Reserve bank of India vide FE.CO.FID/3469 /11.01.008/2016-17 dated September 30, 2016 has permitted the increase in Foreign investment limit under Portfolio Investment Scheme for Flls / RFPIs from default 24% to 34% of the paid-up share capital of the Company, as approved by the shareholders in the previous AGM.

Other regulatory developments are covered elsewhere in this Report under the respective Section.

AMENDMENT TO MEMORANDUM OF ASSOCIATION (MOA) AND ARTICLES OF ASSOCIATION (AOA)

Pursuant to the merger of FMC with SEBI and repeal of Forward Contracts (Regulation) Act, 1952 (FCRA) w.e.f. September 29, 2015, the object clause of the Memorandum of Association and the Articles of Association of your Company was amended to reflect the provisions of Securities Contracts (Regulation) Act, 1956 (SCRA) in place of FCRA and also incorporate applicable provisions as contained in the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (SECC Regulations) and all other relevant rules, regulations, directions, guidelines, etc. This was done with the approval of SEBI and published in the Official Gazette of India and effective thereon.

SEBI vide circular no. CIR/MRD/DSA/33/2012 dated December 13, 2012 issued circular on procedural norms on Recognition, Ownership and Governance for Stock Exchange and Clearing Corporated. Para 10 of the said circular states that in case the amendments to the Memorandum and Articles of Association are pursuant to Regulation, Circulars etc., issued by SEBI, the same shall not be subject to shareholders approval. Accordingly, shareholders approval was not sought for the above referred amendment to the Memorandum and Articles Association of your Company.

RISK MANAGEMENT AND RISK MANAGEMENT POLICY

As per the directions of SEBI, the commodity derivatives exchanges have to transfer the functions of clearing and settlement of trades to a separate clearing corporation within three years from September 28, 2015. Till then, the exchanges may continue with the existing arrangement for clearing and settlement of trades. Your Company has, proactively, taken effective steps for transferring its clearing and settlement functions to Multi Commodity Exchange Clearing Corporation Limited (MCX CCL), its wholly owned subsidiary, subject to requisite approvals. Your Company has complied with SECC Regulations relating to risk management and has re-constituted its Risk Management Committee for, inter alia, identification, measurement and monitoring risk profile of the Exchange. The said Committee as on the date of this Directors'' Report comprise of two Independent Directors, one Shareholder Director and an Independent External Expert. A comprehensive Risk Management Policy for managing different risks including business risk, default risk, settlement risk, market risk, legal risk, operational risk, technological risk and delivery risk is in place and being implemented.

Your Company has implemented additional risk management measures like increasing the margins to cover two days "Margin Period of Risk", levy of concentration margins and increasing the delivery margins. Pursuant to SEBI guidelines, your Company has tightened the norms, for members who habitually delay payment of margin and pay-in requirements. Your Company has also increased the Base Minimum Capital norms for members and adopted the guidelines for Default Waterfall Mechanism issued by SEBI.

As a part of risk mitigation plan for avoiding business disruption, your Company has focused on strengthening its core technology infrastructure so that there is no single point of failure. Recently, your Company has shifted its Disaster Recovery (DR) Site from New Delhi to GIFT City in Gandhinagar, Gujarat which has a robust infrastructure and accessibility. Your Company successfully conducted live trading from DR site on April 03, 2017 & 3^rd Public mock on April 01, 2017. The Company has strengthened its Business Continuity Plan (BCP) and regularly conducts mock drills to test readiness and effectiveness of IT infrastructure at its Data Centre and also its DR site. For further details relating to risks and their impact on your Company''s business, please refer the section titled ''Risk Management'' in the Management''s Discussion and Analysis forming part of the Annual Report.

INVESTOR (CLIENT) PROTECTION FUND (IPF)

Your Company has established Multi Commodity Exchange Investor (Client) Protection Fund Trust (IPF), to protect and safeguard the interests of investors (clients) by meeting their eligible / legitimate claims on account of default by any trading and clearing member of the Exchange. The interest income received by investment of surplus funds of IPF is used for meeting expenses for imparting investors'' (clients) education, conducting awareness programs, undertaking research or such other programs as may be specified by SEBI.

As on March 31, 2017, the corpus of IPF Trust stood at Rs,15,383 lakh (Provisional). Details of transactions entered into with IPF are disclosed as per Ind AS 24 in Related Party Disclosures of the Financial Statements of your Company.

SETTLEMENT GUARANTEE FUND (SGF)

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

Settlement related penalties and fines amounting to '' 78 Lakh (net of tax) and income of Rs, 863 Lakh (net of tax), earned from earmarked SGF investments were credited to SGF during the year. Accordingly, the cash component of SGF stood at Rs, 17,049 Lakh as at March 31, 2017. Further, the Base Minimum Capital of Members who have not applied for SEBI registration has been released from the SGF.

WAREHOUSING

To cater to the storage requirements of various members of the Exchange and their respective constituents / depositors who are willing to store goods and give delivery on the Exchange platform, your Company has made necessary warehousing and logistics arrangements with Warehouse Service Providers (WSP) /Vault Service Providers (VSP). Your Exchange co-ordinates with WSPs /VSPs and undertakes accreditation of the warehouses / vaults, audit and inspection of warehouses / vaults for safe storage and preservation of goods deposited by various business participants for delivery on its platform.

Currently, your Company operates through three WSPs for facilitating physical deliveries in agricultural commodities, viz., Sohanlal Commodity Management Private Limited, Origo Commodities India Private Limited and Yamada Logistics Private Limited. As on March 31, 2017, your Exchange has accredited 24 warehouses of these three WSPs. Out of the 24 warehouses, 12 warehouses are registered with the Warehousing Development & Regulatory Authority (WDRA) and

12 warehouses are in different stages of registration. The warehouses, as on the date of this Report, are located at Jalgaon, Jalna, Yavatmal in Maharashtra, Kadi, Rajkot, Mundhra in Gujarat, Sirsa in Haryana and Adilabad in Telangana for Cotton Bales, Vandanmedu in Kerala for Cardamom, Kadi and Deesa in Gujarat for Castor Seed and Barabanki and Chandausi in Uttar Pradesh for Mentha Oil. Your Company has put in place a detailed WSP Policy and a Warehouse Inspection Policy. This is in compliance with the SEBI revised warehousing norms for agricultural and agri processed commodities traded on the National Commodity Derivatives Exchanges.

During the year, the highest number of Cotton bales stored was recorded as 85200 bales of 170 kg each; Mentha Oil drums was recorded as 17286 drums of 180 kg each, and the number of bags of cardamom and castor seed were recorded as 712 bags of 50 kg each and 1485 bags of 75 kg each, respectively, in the Exchange accredited warehouses. Further, the highest value of Gold (including all of its variants) stored was '' 503.792 Cr while that of Silver was recorded as '' 492.602 Cr in the Exchange accredited vaults.

As Lemuir Secure Logistics Pvt. Ltd, the vault service provider, expressed its intention to stop bullion vaulting operations, your Company decided to switch over and avail the services of Sequel Logistics Private Limited as the new vault service provider w.e.f. February 17, 2017 for facilitating physical deliveries in bullion. The vaults of this agency are located at Ahmadabad, Mumbai and New Delhi. Your Company is making serious efforts to bring in more credible and large players as vault service providers, Warehouse Service Providers and Assayers. Your Company is also working on building a comprehensive e-warehousing software. You may also refer section titled ''Warehousing'' appearing in the Management Discussion and Analysis forming part of the Annual Report.

TRAINING AND EDUCATION

The Training and Education Division has the following key objectives:

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

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

To achieve the said objectives, your Company in FY 17, registered 1429 candidates for the MCX Certified Commodity Professionals (MCCP) to help the ecosystem. In conjunction with the Business Development and the Product teams, the Company held over 50,000 man hours of trainings for traders, farmers, students, bankers, teachers etc. The team conducted 103 programs on sensitizing the community on Options in Commodities, given the imminent launch of the same. The team has hosted and trained 5 International delegations and 30 students and corporate delegations to help them understand the operations of a commodity exchange. Your Company has conducted 27 awareness programs and 3 Faculty Development Programs. Also, your Company has entered into MOUs with 11 Educational Institutions. The team is also in the process of introducing new methods to reach the public through webinars, vernacular programs and mobile learning aids. Your Company aims to increase its annual trainings to 100,000 man hours in the coming year.

SHARE CAPITAL

There has been no change in the share capital of your Company during the year under review. As on March 31, 2017, the paid-up share capital of your Company stood at Rs, 5,100 Lakh comprising 50,998,369 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 any shares (including sweat equity shares) to its employees under any scheme save and except transfer of shares by the ESOP trust to eligible employees pursuant to the Employee Stock Option Scheme (ESOP 2008).

TRANSFER TO RESERVES

For the year ended March 31, 2017, your Directors do not propose to transfer any amount to the General Reserve. An amount of Rs, 95,670 Lakh is proposed to be retained as surplus in the statement of Profit and Loss Account under the heading ''Reserves and Surplus''.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

As per the Dividend Distribution Policy of the Company, the Board, considering various parameters 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 profits after tax (PAT) every financial year on the standalone financials.

Considering the financial statements for FY 17 and particularly in view of the fact that the Company has adequate cash at its disposal, with no immediate cash outflow requirement, coupled with no specific investment in the horizon, resulting in significant outflow of cash resource, your Directors have recommended, a final dividend of Rs, 15 per Equity share (150%), as against Rs, 6.50 per share (65%) for the FY 16, on a face value of Rs, 10 per share aggregating to Rs, 7,650 Lakh, subject to approval of shareholders at the ensuing AGM.

The outflow on account of the proposed dividend and tax thereon aggregates to Rs, 9,207 Lakh (including the Dividend Distribution Tax of Rs, 1,557 Lakh), being a payout of 73% of the profit after tax for the year ended March 31, 2017. Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the SEBI Listing Regulations, 2015), the Board at its meeting held on August 10, 2016, amended the existing Dividend Distribution Policy. The revised policy is attached as Annexure I to this Report. The same is also available under the weblink https://www.mcxindia.com/docs/default-source/investor-relations/corporate-governance/dividend distribution policy re.pdf?sfvrsn=2

DEPOSITS

Your Company had not invited any deposits from the public, and as such, no amount of principal or interest related thereto was outstanding as on the date of the Balance Sheet i.e. March 31, 2017.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013

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

Pursuant to the Consent Terms between the Company and Metropolitan Stock Exchange of India Ltd. (MSEI) filed with and taken on record by the Hon''ble Bombay High Court, the Company has since received necessary approval and no objection from SEBI for conversion of warrants of MSEI into its Equity Shares. Accordingly, the Company vide its letter dated September 29, 2016 to MSEI has exercised the conversion right of 26,51,77,600 warrants issued as per the Scheme of Reduction cum Arrangement into 26,51,77,600 Equity shares of Rs, 1 each. The Equity shares have since been allotted and credited to demat account of the Company on October 3, 2016. As per the consent terms, an amount of Rs, 15,07,40,072/- has been received on October 14, 2016 towards balance 15,07,40,072 warrants.

Investment in CDSL led Repository: The Board at its meeting held on January 13, 2017 approved the investment, in one or more tranches, of an amount not exceeding Rs, 12 crores by way of subscription at par basis, to acquire 24% Equity stake in the CDSL led commodity repository proposed to be set up for creation and management of electronic Negotiable Warehouse Receipts.

CONSOLIDATED FINANCIAL STATEMENT

Your Company has, in accordance with Section 129(3) of the Companies Act, 2013, prepared consolidated financial statements, consolidating its financials together with its wholly owned subsidiary company, Multi Commodity Exchange Clearing Corporation Limited (MCXCCL). The audited consolidated financial statements have been prepared on the basis of the related Consolidated Financial Statements which is in accordance with the requirements of the Ind AS prescribed under Section 133 of the Companies Act, 2013 (the ''Act'') read with relevant rules issued there under, as applicable, and other accounting principles generally accepted in India and forms part of this Annual Report.

SUBSIDIARY

Multi Commodity Exchange Clearing Corporation Limited: MCXCCL, a wholly-owned subsidiary of your Company, was set up for having a separate clearing house to provide services such as clearing and settlement of trades and guaranteeing counter party risk. As of March 31, 2017 the company''s paid-up capital is Rs, 6 crores. As on date, MCXCCL has not commenced business. In terms of SEBI circular dated November 26, 2015, commodity derivatives exchanges shall transfer the functions of their clearing and settlement of trades to a separate clearing corporation within three years (i.e. September 27, 2018). Till then, the exchanges may continue with the existing arrangement for clearing and settlement of trades.

Your Company has initiated the process to operationalize MCXCCL. MCXCCL has made an application dated September 30, 2016 to SEBI for recognition of the company as Clearing Corporation under Regulation 4 of the SECC Regulations.

The Board of your Company, at its meeting held on June 30, 2016, accorded it approval to make an investment, in one or more tranches, by way of subscription to the Equity shares of the face value of Rs, 10/- each in MCXCCL, for cash at par, an amount not exceeding Rs, 150 crores, for operationalising MCXCCL in line with the requirements stipulated by SEBI for clearing corporations.

SME Exchange of India Limited: SME Exchange of India Limited (SME), a subsidiary of your Company which was set up to provide a platform for transacting, clearing and settlement of trades in small and medium enterprises segment is under the process of members'' voluntary winding up.

The requisite formalities for application of winding up of the Company has been completed. The Registrar of Companies, on May 30, 2017, has approved the Liquidators statement showing the manner in which the winding up has been conducted and the property of SME has been disposed off. The Official Liquidator shall issue the final report on winding up of the SME after receiving the No Objection Certificate from the Registrar of Companies and the Assessing Officer, Income Tax department.

During the year under review, there have been no companies which have become or have ceased to be the subsidiaries or associate companies of your Company. Further, neither the Managing Director & CEO nor the Whole-time Director of your Company receives any remuneration or commission from any of its subsidiary.

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

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 under the we blink https://www.mcxindia.com/investor-relations. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary company may write to the Company Secretary at the Company''s registered office. Copies of the annual accounts of your Company and of its subsidiary company would be kept at the registered office of your Company for inspection by any shareholder.

MANAGEMENT''S DISCUSSION AND ANALYSIS STATEMENT

Management''s Discussion and Analysis Statement, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms a part of this Annual Report.

INITIATIVES AND OUTLOOK

During the year, SEBI undertook policy measures to improve market transparency, risk management, market accessibility, participation, and investor protection. With a view to synchronies practices at commodity derivatives exchanges with those at stock exchanges, a series of regulatory initiatives were effected in the market by SEBI. The measures taken by SEBI, RBI and the Government of India in the area of commodity derivative markets are listed below:

i. Additional risk management norms like enhancement in initial margins to cover at least a Margin Period of Risk (MPOR) of 2 days for all commodity derivatives contracts, mechanism for determining the Delivery Period Margin, Concentration Margins, default waterfall mechanism, liquidation mechanism in the event of default amongst others, were introduced.

ii. Revised warehousing norms were issued for agricultural and agri-processed commodities.

iii. Six new commodities for futures trading viz., Diamond, Brass, Pig Iron, Eggs, Cocoa, Tea were added to the list of commodities notified under SCRA.

iv. Bullion was allowed to be kept as collateral up to a maximum of 30% of total liquid assets (TLA) of a clearing member (CM). As per the modified conditions, "Total commodities collateral for any CM shall not exceed 30% of the TLA of the CM, out of which non-bullion collateral shall not exceed 15%".

v. Circulars were issued to consolidate and update norms with regards to various policies like Daily Price Limits, Position Limits, Position Limits for Hedgers, Spot Price Polling Mechanism, Transaction Charges, Short-collection of margin from clients by members, Delivery Procedures, etc. prescribed by the erstwhile regulator, FMC.

vi. International Organizational of Securities Commissions (IOSCO) Principles for Financial Market Infrastructures (PFMIs) were made applicable to Commodity Derivatives Exchanges having annual turnover of more than INR 5 lac crore in previous financial year.

vii. Detailed guidelines were issued for determining the eligibility, retention and re-introduction of derivative contracts in commodities.

viii. RBI vide circular dated September 14, 2016 set up a working group to review the guidelines for hedging of commodity price risk by residents in the overseas markets during the development phase of our commodity derivative market.

ix. To mitigate the settlement risk, Settlement Guarantee Fund and Stress Testing methodology was prescribed.

x. Guidelines were issued for simplification of account opening process and use of Central KYC Records.

xi. Guidelines were issued for sponsorship of programmes in media channels and media interaction.

xii. Exchanges were allowed to decide trading holidays among themselves.

xiii. Price dissemination was mandated through SMS and other electronic media.

xiv. Mandatory requirement for PAN in Unique Client Code was reiterated.

xv. Certain modifications in contract specifications at Exchange level were permitted.

xvi. Portfolio Management Services (PMS) was prohibited in Commodities markets.

xvii. The guidelines for Algorithmic Trading and prohibited Collocation were re-notified.

OPPORTUNITIES FOR THE COMPANY

Your Company remains committed to explore new opportunities being charted out by the regulators and government. Entry of institutional participants, introduction of new products, efforts for integration of commodity spot and derivative markets, integration of financial markets and commencement of GST regime are opportunities, for which your Company made preparations to reap their full potential. In the last one year, there have been significant movement in each of these policy initiatives, viz. discussions by regulators with stakeholders, floating of consultation papers, approval by Board of the regulator, announcements by the government, etc.

Your Company opened a new office at GIFT City, Gandhinagar measuring over 22,600 sq ft, which was inaugurated by Shri Vijay Rupani, Hon''ble Chief Minister of Gujarat on January 31, 2017. The office houses the Exchange''s Business Continuity (BC) and Disaster Recovery (DR) centre and a training and education facility.

During the year, your Company signed a Memorandum of Understanding (MoU) with Singapore Diamond Investment Exchange (SDiX), the world''s first and only commodity exchange trading in physically settled diamonds for cooperation, in areas such as knowledge sharing and research, standardization of product for Indian markets and enhancing transparency in pricing. The exchanges through this MoU also have agreed to work towards assisting stakeholders in India''s diamond industry by introducing international best practices in price risk management and price discovery through innovative spot and derivative market operations. The move will also foster sharing of information between the exchanges.

In September 2016, your Company had signed a MoU with the Mozambique Commodity Exchange (BMM). By entering into the MoU, both Exchanges expressed their intention to facilitate potential collaboration in areas such as sharing of knowledge, research, experiences. BMM aims to develop the Mozambican commodity markets ecosystem consisting of energy, base metals and agricultural products for delivering better value to the stakeholders. Towards this objective, MCX will work with BMM to help Mozambique realize its potential in commodities derivative trading.

During the year under review, as part of our commitment toward financial literacy in commodity derivatives and endeavour to reach out to a larger number of market participants, your Company signed MoUs with 11 educational universities and institutions. These were in addition to the 9 MoUs entered in the previous financial year. The 11 educational institutions are - Mandsaur University (Madhya Pradesh), Marwari University (Gujarat), Vinobha Bhave University (Jharkhand), Lal Bahadur Shastri Institute of Management (Delhi), Navitas Resources Pte. Ltd. (Singapore), Imaticus Learning Pvt. Ltd. (Maharashtra), Loyola Institute of Business Administration (Tamil Nadu), EduedgePro Pvt. Ltd. (Maharashtra), Symbiosis Centre for Management & Human Resource Development (Maharashtra), Gnanam Business School (Tamil Nadu) and Pondicherry University (Pondicherry). Pursuant to these MoUs Awareness Programmes and Classroom Sessions on Commodity Derivatives were organised with some of these institutions for their students and faculty.

In our efforts to create market awareness on commodity options before the regulatory approval is provided for the launch of contracts, few advanced options programmes in addition to basic commodity option programmes were conducted across the country. These benefitted various ecosystem stakeholders. The Company would continue to conduct such advanced Options programs across the Country, in its endeavor to develop a healthy ecosystem of stakeholders fully prepared for the launch of Options in the near future.

Three eLearning Programmes were launched during the year in Statistical Arbitrage Trading, Python for Commodity Trading and Getting Started with Algorithmic Trading in association with EduedgePro Pvt. Ltd.

The examination of our flagship training and certification programme on commodity markets, MCX Certified Commodity Professional (MCCP) is available in two regional languages - Gujarati and Hindi, besides English. In all, 1,429 candidates enrolled for the MCCP examination and 630 candidates were certified during FY2017.

COMMITMENT TO QUALITY

With a quest to achieve excellence in products and services offered, your Company continues to monitor and maintain its effective and well-crafted Quality Management Framework (QMF). QMF is aligned to the business objectives of the Exchange, and ensures that your Company provides highest quality of service to its members and clients. Your

Company is focused on continually improving its existing robust processes and quality of services. Over the years, your Company has evolved mature processes, which enabled it to reduce unpredictability across various business operations. Your Company successfully cleared the ISO 9001:2008 Surveillance Audit this year, after rigorous process audits across all its key operations. This showcases your Company''s dedication and commitment towards sustaining a customer centric by providing a robust Quality Management System.

In line with your Company''s vision and commitment of ensuring information security and to build confidence amongst its stakeholders, your Company has developed and implemented simple, effective and robust processes and controls using latest international standard ISO / I EC 27001:2013 on Information Security Management System. It has also deployed a proactive Information Risk Management approach, and carries out risk assessment activities on a periodic basis.

RESEARCH AND DEVELOPMENT

Your Company is constantly undertaking research activities for the development of new products keeping in view emerging policy and regulatory scenarios, global best practices in markets and risk management in an effort to enhance value proposition to stakeholders. After extensive research of the physical markets and stakeholders, the Company commenced futures trading in Castorseed on January 05, 2017. With SEBI permitting options on commodity derivatives, we are in continuous interaction with stakeholders and the regulator to ensure that the design of the contract specifications, risk management measures and settlement mechanisms are in the best interests of the growth and development of the proposed segment of the market. Effective coordination is also being undertaken with regulatory authorities and policy makers for enhancing the utility of the markets to retail and corporate participants in terms of risk management and portfolio diversification.

Extensive research is also being undertaken in association with research institutions of national repute for assessing the socio-economic impact of futures market on the commodity ecosystem and to understand policy changes that would further the growth and development of this market. During 2016-17, your company signed a MoU with the The Institute of Companies Secretaries of India (ICSI) to jointly conduct interactive sessions, faculty development programmes, research, conferences and other activities with the objective of achieving knowledge creation and spreading awareness about the benefits of commodity price risk management. Similarly, Your Company signed an agreement with Indira Gandhi Institute of Development Research (IGIDR) to support and undertake research on contemporary issues of relevance in India''s commodity derivatives market.

A number of research studies were undertaken during the year under review. A study of impact of futures markets on the stakeholders of the gold value chain and their hedging practices was taken up with Pahle India Foundation. This was done to understand the participants'' views on products, policies and process for making the market stakeholder friendly and economical. The National Institute of Agricultural Economics and Policy Research has undertaken a study on the price linkages between the spot and future markets and the benefits of futures trading in cotton to its ecosystem. ''A Study on the Level of Compliance to Commodity Risk Disclosure Regulations in India & Abroad'' had been undertaken by The Institute of Company Secretaries of India - Centre for Corporate Governance, Research & Training, (ICSI-CCGRT) Mumbai, at our request to help understand risk disclosure standards and compliance in India and abroad. The findings of the study are being shared with stakeholders and regulators. IGIDR completed a study on the detrimental effects of the Commodity Transaction Tax (CTT) on the growth and efficiency of the market, as also on government revenue collection. The findings of this study were widely disseminated.

AWARDS

The initiatives for growth and market development taken by your Company have been recognized at various fora by several institutions. Your Company was honoured with the ''Best Commodity Exchange'' Award at the Bullion Federation Global Convention organized by the Bullion Federation in Agra during 21^st-24^th July 2016; and with the ''Best Exchange of the year in Bullion Industry'' at the 9^th International Gold Summit & Excellence Awards jointly organized by ASSOCHAM, and World Gold Council on September 29, 2016. Your Company was also named ''Exchange of the Year'' by ASSOCHAM at their 15^th Commodity Futures Market Summit & Excellence Awards on March 01, 2017 and as the ''Best Exchange - Bullion & Metals'' by Commodity Participants Association of India (CPAI) at their 5^th International Convention on March 18, 2017.

ENVIRONMENTAL RESPONSIBILITY

Given the nature of its operations, your Company has a very low impact on the environment. Notwithstanding this, it is committed to minimal adverse environmental impact through efficient use of natural resources, including electricity, which is critical to the Exchange''s technology-driven business. Your Company has an effective Environmental Policy and adheres to it. Your Company believes that in order to meet the objectives of its Environmental Policy, employee commitment is imperative. Thus, your Company through its Corporate Social Responsibility (CSR) team creates awareness amongst employees and encourages them to adopt conservation practices. Your Company cleared the ISO 14001:2004 surveillance audit, and continues to monitor its Environment Management Plan, which is developed on the basis of the Environment Review conducted annually to assess the impact of the Company''s activities. Your Company has also developed an e-waste policy for the safe disposal of e-waste from its premises. Its tie-up with authorized e-waste recyclers helps it to dispose its e-waste in an eco-friendly manner.

In order to help employees dispose-off their e-waste in an environment friendly manner, an e-waste drive was conducted at the registered office, in association with CROMA for safe disposal of electronic items like head phones, CD''s Hard Disks, etc.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Board constituted a CSR Committee at its meeting held on December 26, 2013, which has been re-constituted from time to time. The Corporate Social Responsibility Policy guides the Company''s CSR approach including but not limited to rural development, women and children empowerment, eradicating hunger and promoting education, health care, sanitation, environment conservation, etc., and the same is available on your Company''s web link viz. URL: https://www.mcxindia.com/about-us/csr

As per Companies Act, 2013, all companies having a net worth of Rs, 500 crore or more, or a turnover of Rs, 1,000 crore or more or a net profit of Rs, 5 crore or more during any financial year are required to constitute a CSR committee of the Board of Directors comprising three or more directors, at least one of whom should be an independent director. All such companies are required to spend at least 2% of the average net profits of three immediately preceding financial years on CSR-related activities. Accordingly, the Company was required to spend Rs, 3.08 crore towards CSR activities. Your Company utilized Rs, 3.29 crore on CSR activities, which exceeds the prescribed amount.

Your Company views CSR activities as an opportunity to serve the interest of community at large, and promote inclusion, the major plank of your Company''s business philosophy. The social initiatives of your Company aims to create an enabling environment by empowering communities. We believe that necessary and timely interventions can make the communities, environment sustainable and improve the socio-economic conditions of the community concerned.

The CSR policy is in line with the activities mentioned under Schedule VII to the Companies Act, 2013 (as amended from time to time). Your Company is implementing and monitoring the CSR activities in letter and spirit, and has, inter alia, approved projects for water shed programs in drought prone areas, capacity building and empowerment of women and youth through livelihood skill building training, rehabilitation of children with disabilities, addressing the issue of malnutrition and early learning development requirements of children from the lower economic section, empowering farmers by strengthening the Gramin Suvidha Kendra activities, etc. Your Company, shares the responsibility of meeting the needs of the community through thematic interventions, designed in line with the vision embraced in the CSR policy. Your Company has resolved to engage and motivate employees for active participation in the CSR activities of the Company by initiating various engagement initiatives and has initiated teaching engaged in imparting training to the students in BMC Schools in Mumbai, belonging to socially backward section.

Your Company has initiated the Gramin Suvidha Kendra Programme in 2006. This service to the farmers provides necessary assistance, guidance, and support in agriculture and allied activities to make farming sustainable and profitable. It is a single window service, in association with India Post, designed to empower small and marginal farmers with information about market prices of the locally produced commodities and best practices for enhancing the quality of their produce. Through the Gramin Suvidha Kendra initiative, your Company has empowered the farmers, and supported sustainable agricultural practices for conservation of the environment and saving one of the most critically endangered bird species the Great Indian Bustard Ardeotis nigreceps from extinction.

The details of CSR policy and initiatives adopted by the Company on CSR during the year is available on our website (https://www.mcxindia.com/about-us/csr). The Annual Report on CSR activities under Section 135 of the Companies Act, 2013 is provided in Annexure III of this Report.

BUSINESS RESPONSIBILITY REPORT

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

As your Company falls within the top 500 listed Companies, the said Regulations are applicable 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 the broad scope of the initiatives, to be undertaken, to best sub-serve the interest of all the Stakeholders.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return of your Company pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is attached as Annexure IV to this Report.

CORPORATE GOVERNANCE

Your Company continues to be 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the certificate from a Practicing Company Secretary regarding compliance with Corporate Governance norms, forms part of this Annual Report. The report on Corporate Governance also contains the disclosures required under the Companies Act, 2013.

MEETINGS OF THE BOARD

Nine meetings of the Board of Directors were held during FY 17. For further details, please refer to the report on Corporate Governance forming part of this Annual Report.

ETHICS AND GOVERNANCE POLICIES

Your Company adheres to the highest 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 its duties in an ethical manner. Some of these codes / policies framed and implemented by your Company are Code of Conduct and Code of Ethics, Code of Conduct for Prevention of Insider Trading, Whistle Blower Policy / Vigil Mechanism, Policy on Materiality of Related Party Transactions and on dealing with 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, Dividend Distribution Policy, etc.

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 behavior. 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have implemented a vigil mechanism through the adoption of Whistle Blower Policy. For further details, please refer to the report on Corporate Governance which forms part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Your Company has formulated the policy on materiality of related party transactions and dealing with related party transactions. The same is uploaded on the website of your Company and may be accessed at the web link: https://www.mcxindia.com/docs/default-source/investor-relations/corporate-governance/amended policy on related party transactions 05may2016.pdf?sfvrsn=2

All related party transactions entered into by your Company, are in the ordinary course of business and at arm''s length pricing basis.

All the related party transactions entered into by your Company during the year under review, were placed and approved by the Audit committee and / or by the Board, as applicable, in accordance with the Companies 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 credit penalties, other than the settlement related penalties, to its Investor Protection Fund, for all transactions executed on the Exchange. IPF is held in trust and managed by the Trustees, who are appointed as per the provisions of the Trust Deed and the Rules, Bye-Laws and Regulations of the Exchange. The transactions with IPF are regulated in accordance with the regulatory requirements / guidelines issued from time to time and is independently managed. Except for complying with the regulatory requirements, your Company does not have any pecuniary relationship with IPF. However, in view of clarification issued by Institute of Chartered Accountants of India, IPF is being treated as a related party and as such, transactions entered into by your Company with IPF entails a reporting requirement without the need for following other concomitance of the Related Party Transaction Policy.

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 to be reported under Section 188(1) of the Companies Act, 2013 are appended in Form AOC - 2 as Annexure V to this Report.

All Related Party Transactions as required under Ind AS 24 - Related Party Disclosures are reported in Note 35 of Notes to Accounts of the standalone and consolidated financial statements of your Company.

DIRECTORS

Your Company being deemed to be a recognized stock exchange under Securities Contract (Regulation) Act, 1956 (SCRA) is, inter alia, regulated by SEBI. As mandated by SECC Regulations, the appointment of all the Directors on the Board of your Company is with the approval of SEBI.

As on the date of this Report, your Board comprises of 14 (fourteen) Directors, of which 7 (seven) are Public Interest Directors, 6 (six) are Shareholder Directors (including the President & Whole Time Director) and 1 (one) Managing Director.

"Public Interest Director" under the SECC Regulations 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 SEBI, is in conflict with his role and accordingly, such directors are considered as Independent Directors for adhering compliance with the provisions under the SEBI Listing Regulations, 2015 and Companies Act, 2013.

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

Further, all the Directors have confirmed that they are ''Fit and Proper'' in terms of the SECC Regulations. 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 Listing Regulations, 2015 from all the Directors as applicable.

Your Company has 3 (three) women Directors on the Board as against the stipulation of appointing at least one Woman Director on the Board.

The Board of Directors re-designated Mr. Parveen Kumar Singhal, as the ''President and Whole Time Director'' w.e.f. April 01, 2016, to hold such office up to the date of his current contract / service with the Company.

Mr. Mrugank Madhukar Paranjape was appointed as the Managing Director & CEO of the Company for a period of three years w.e.f. May 09, 2016, with the approval of SEBI.

Pursuant to the approval of the Board, the shareholders at their 13^th Annual General Meeting (AGM) and SEBI vide its letter dated June 08, 2016, Mr. Hemang Raja was co-opted as the Shareholder Director on the Board of your Company w.e.f. June 30, 2016.

Further, pursuant to the approval of SEBI, Mr. Saurabh Chandra was appointed as the Public Interest Director, w.e.f. July

03, 2016, in place of Mr. Dinesh Kumar Mehrotra whose term expired on July 02, 2016.

Mr. Ajai Kumar and Mr. Manjueshwar Anantha Krishna Prabhu, Shareholder Directors of the Company, were liable to retire by rotation at the 14^th AGM of the Company held on September 19, 2016. Mr. Ajai Kumar offered himself for re-appointment where as Mr. Manjueshwar Anantha Krishna Prabhu did not seek re-appointment. The resolution for re-appointment of Mr. Ajai Kumar was not passed with requisite majority and the Board of Directors decided not to fill in the vacancy. Pursuant to the approval of the Board, the Shareholders at their 14^th AGM and SEBI, Mr. Chengalath Jayaram was appointed as a Shareholder Director w.e.f. November 25, 2016.

Mr. Prithvi Haldea was appointed as a Public Interest Director for a period of 3 years on the Board w.e.f. October 25, 2016 in the vacancy arising out of the completion of tenure of Mr. G. Anantharaman on October 18, 2016.

Mr. Arun Bhargava was appointed as a Public Interest Directors for a period of 3 years on the Board w.e.f November 19,

2016 in the vacancy that arose on completion of tenure of Mr. Satyananda Mishra as a Public Interest Director and the Chairman of Board on November 18, 2016. Mr. Saurabh Chandra was elected as the Chairman of Board, with the approval of SEBI, w.e.f December 01, 2016.

In terms of Regulation 24(3) of SECC Regulations, SEBI vide letter dated January 30, 2017 has granted extension of the term of Ms. Pravin Tripathi, Mr. Subrata Kumar Mitra , Mr. Arun Kumar Nanda and Dr. Govinda Rao Marapalli, Public Interested Directors on the Board, till the completion of the period of three years from their respective dates of appointment as Public Interest Directors by the erstwhile Regulator Forward Markets Commission. Accordingly, the tenure of Ms. Pravin Tripathi shall be up to August 11, 2017, Mr. Subrata Kumar Mitra and Mr. Arun Kumar Nanda up to May 18, 2018 and Dr. M. Govinda Rao up to August 07, 2018.

In accordance with the provisions of the Companies Act, 2013, Mr. Amit Goela and Ms. Padma Raghunathan, Shareholder Directors, who have been longest in office since their appointment as such, shall be subject to retire by rotation at the ensuing AGM and being eligible are seeking re-appointment. The Board recommends their re-appointment.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, Mr. Mrugank Madhukar Paranjape, Managing Director & CEO, was considered as the whole-time key managerial personnel of the Company w.e.f. May 09, 2016.

Consequent to resignation of Mr. Sandeep Kumar Sarawgi, Chief Financial Officer (CFO) and Mr. Viswanathan Krishnan, Chief Regulatory Officer (CRO) from the services of the Company, they ceased to be a Key Managerial Personnel (KMP) w.e.f. August 08, 2016 and October 31, 2016 respectively. Mr. Narendra Ahlawat, Senior Vice President - Market Operations and a KMP was designated as the CRO w.e.f. November 22, 2016.

Further, Mr. Sanjay Wadhwa was appointed as the CFO of the Company for a term of three years and identified as a KMP w.e.f. February 27, 2017.

PERFORMANCE EVALUATION OF THE BOARD AND THE EVALUATION CRITERIA

In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated the criteria for performance evaluation of individual Directors, Board Committees and the Board as a whole.

A statement indicating the manner in which formal annual evaluation of the Directors, the Board and Board Committees has been made and the criteria for the same are set out in Annexure VI to this Report.

AUDIT COMMITTEE

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 accepted any recommendation of the Audit Committee.

STATUTORY AUDITOR AND THEIR REPORT

M/s. Shah Gupta & Co., Chartered Accountants (Firm Registration No. 109574W) were appointed as Statutory Auditor by the shareholders at their 13^th AGM held on September 29, 2015 for a period of five years, subject to ratification by the shareholders at every AGM. Accordingly, the appointment of M/s. Shah Gupta & Co., Chartered Accountants, as Statutory Auditor of the Company is placed for ratification by the shareholders.

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.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

M/s Rathi & Associates, Practicing Company Secretaries, were appointed as the Secretarial Auditor by the Board to conduct the secretarial audit of the Company for financial year 2016-17.

In accordance with Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report for the financial year ended March 31, 2017 is annexed as Annexure VII to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROL AND THEIR ADEQUACY

The Board has put in place various internal controls to be followed by your Company to ensure that the internal control mechanisms are adequate and are effective. The Board has also put in place state-of-the-art technology and has automated most of the key areas of operations and processes, to minimize human intervention.

The design, implementation and maintenance of adequate internal financial controls are such that it operates effectively and ensures the accuracy and completeness of the accounting records and their presentation gives a true and fair view of the state of affairs of the Company and are free from material misstatements, whether due to error or fraud.

The operational processes are adequately documented with comprehensive and well defined Standard Operating Procedures which, also include the financial controls in the form of maker and checker being with separate individuals.

The Board has approved a scheme of financial sub-delegation to officials of your Company for incurring expenses. The Board with a view to ensure transparency, has also formulated various policies and has put in place appropriate internal controls for the procurement of services, materials, fixed assets, monitoring income streams, investments and financial accounting.

Internal control measures includes adherence to systemic controls, information security controls as well as role-based / need based access controls. Further, the existing systems and controls are periodically reviewed for change management in the situations of introduction of new processes / change in processes, change in the systems, change in personnel handling the activities, etc.

The Audit Committee of the Company, comprising of Public Interest Directors, periodically reviews and recommends the unaudited quarterly financial statements as also the annual audited financial statements of your Company to the Board for approval.

Your Company has appointed a firm of chartered accountants to conduct independent financial and operational internal audit in accordance with the scope as defined by the Audit Committee. The reports from the Internal Auditors are reviewed by the Audit Committee on periodic basis and the Internal Auditor have been advised to issue flash reports, if required.

Further, all related party transactions are placed before the Audit Committee and are approved / ratified by it after deliberations.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

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.

HUMAN RESOURCE DEVELOPMENT

Your Company believes in strategic alignment of Human Resources to its business priorities and end objectives. As on March 31, 2017, your Company employed 388 employees.

Your Company continues to have in place an Anti-Sexual Harassment Policy in line with the requirements of "The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013". An internal Complaints Committee was formed in FY 2015 and continues to exist, to redress complaints received regarding sexual harassment. No complaints were received during the financial year 2016-17 in relation thereto. Your Company has also imparted awareness training to all employees on the ''Anti-Sexual Harassment policy during the year''.

Your Company continues to attract, retain and nurture talented workforce in its endeavour to be an employer of choice. The attrition rate was 12% during the year under consideration.

The disclosures pursuant to SEBI (Share Based Employee Benefits) Regulations 2014, Section 62 of the Companies Act, 2013 read with Companies (Share Capital and Debenture) Rules, 2014 as at March 31, 2017 in connection with the ESOP 2008 are set out in Annexure VIII to this Report.

PARTICULARS OF REMUNERATION

Your Company has adopted a well-defined Nomination & Remuneration Policy for Directors, Key Managerial Personnel and other employees which form part of this report as Annexure IX.

The ratio of the remuneration of each director 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, forms part of this report as Annexure X.

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 Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, a statement containing particulars of employees as stipulated therein also forms part of this Directors'' Report as Annexure XI.

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, not being energy intensive, takes 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

(a) Exchange Data Center has in-row cooling system for servers that cools equipment only and not the external environment to ensure that no energy is wasted in running compressors excessively, to maintain the desired temperature levels of external environment.

(b) Motion sensors connected to lighting were installed in washrooms where the footfall is low, adding to energy saving.

(c) LED lighting installed at Disaster Recovery site at GIFT City to reduce energy consumption and saves energy.

(d) Strict implementation and monitoring of equipment on / off schedule, to reduce wastage of energy.

(e) Maintaining adequate capacitor bank for non-linear electrical loads like air-conditioning plant, pumps and Heat Recovery System, to lower drawal of extra energy and improve power factor.

(f) Preventive maintenance of air conditioning system on scheduled basis to ensure that the heat sensors and electronic components are properly functioning for compressors to achieve variable compression linked to heat levels for reduction in power consumption.

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:

During the year under review Rs, 12 Lakh was invested for installation of LED lights at the Disaster Recovery site at GIFT City.

B. Technology absorption:

i) The efforts made towards technology absorption:

Technology is a key enabler and core facilitator for achievement of the major goals of your Company and is identified as one of the strategic pillars. Your Company hosts all mission-critical applications and supporting infrastructure in its state-of-art Data Center which is supported by the best-of-breed network, security and other necessary infrastructure. Your Company''s technological infrastructure is built on the next generation technology mechanism, which can cater to all market participants by virtue of being fast, secure, cost effective, transparent and regulated. Your Company continues to make substantial investment in its technology platform and systems for meeting increasing market requirements and for keeping pace with the rapid technological developments and changes.

All departments within the Company use technology to deliver superior services to the internal customers and trading and clearing members of the Exchange. With a view to support operations of the Surveillance Department effectively, your Company has setup and augmented systems for real-time analytics and data warehouse.

ii) The benefits derived like product improvement, cost reduction, product development or import substitution:

Your Company has implemented cutting edge technologies which are best in class IT systems and practices in order to ensure that its technology platform is a strategic business tool for building competitive advantage.

The Company''s robust technology infrastructure has continued to provide uninterrupted trading experience and ensures no single point of failure. Through use of carefully evaluated and implemented technology solutions, your Company has been able to offer quality services at optimal costs.

iii) In case 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) Your Company has incurred ''4,857,237 on Research and Development during the year under review.

C. Foreign Exchange Earnings / Outgo during the year under review:

Your Company is engaged in the business of operating a commodity derivative exchange and aspire to gain opportunities as and when available for rendering its services internationally. The details of foreign exchange earnings and outgo forms part of the Significant Accounting Policies and Note no. 31 of Notes forming part of the standalone and consolidated financial statements.

UPDATES POST MARCH 31, 2017

- Your Company commenced futures trading in Refined, Bleached and Deodorized (RBD) Palmolein w.e.f April 5, 2017.

- Detailed guidelines for trading in ''Option'' on commodity derivatives exchanges have been issued by SEBI. The Company is taking all possible steps to launch Options trading at the earliest. In this regard, the Company has made an application to SEBI for launch of Gold Option Contract with Gold (1 kg) Futures as underlying, as it satisfies both the criteria for selection of underlying commodity futures for options, as specified in SEBI circular SEBI/HO/CDMRD/DMP/CIR/P/2017/55 dated June 13, 2017. The rationale for selecting Gold (1 kg) contract are: (i) MCX gold contract is a ''Flagship'' commodity contract, (ii) Large number of potential stakeholders; (iii) Gold has a well-defined value chain and (iv) Introduction of ''Gold Options'' was long awaited by market participants.

- SEBI has, with the objective to align practices in securities markets, issued comprehensive guidelines on June 13, 2017 for Investor Protection Fund, Investor Service Fund and its related matters for National Commodity Derivatives Exchanges which is applicable from July 01, 2017.

- SEBI''s permitted Category III Alternative Investment Funds (AIFs) to trade in commodity derivatives.

- The implementation of GST is expected to bring significant gains to the commodity derivatives market, as GST will replace the multiple state and central indirect taxes, which enhance inefficiencies and the cost of participation. Besides, GST will also pave the path towards creation of a unified national market for commodities by removing the inter-state tax arbitrage. A detailed analysis with respect to the same is covered in ''Management''s Discussion and Analysis'' forming part of the Annual Report

- MCXCCL (Wholly Owned Subsidiary of MCX) has increased its authorized Share Capital from the existing Rs, 10 crore to Rs, 150 crore, divided into 15 crore Equity shares of Rs, 10/- each. Your Company has infused additional capital of Rs, 100 crore to meet the minimum net worth criteria required for a clearing corporation and put in place systems and processes to enable it to commence its operations during the financial year 2017-18.

- Consequent to the expiry of the term of Mr. Ajay Puri as the Company Secretary of the Company, on he attaining the age of sixty, being the age of retirement, ceased to be a KMP w.e.f. June 30, 2017. Mr. Ashwin Patel was appointed as the Company Secretary and identified as a KMP w.e.f. July 01, 2017.

For further details please refer the ''Management''s Discussion and Analysis'' forming part of this Annual Report. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013 with respect to the Directors'' Responsibility Statement, your Directors state that:

(a) In the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) The Directors have selected such accounting policies and applied them consistently and made judgments’ 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 March 31, 2017 and of the profit of the Company for the year ended on that date;

(c) The Directors 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) The Directors have prepared the annual accounts on a ''going concern'' basis;

(e) The Directors 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) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGMENTS

Your Directors place on record their sincere gratitude to the Government of India, Ministry of Finance, Department of Economic Affairs, Ministry of Corporate Affairs, Securities and Exchange Board of India, Reserve Bank of India, Foreign Investment Promotion Board, BSE Limited, Department of Post, Shareholders, Financial Institutions, Bankers, Members of the Exchange and Business Associates for their continued support and faith in the Company. Your Directors also wish to place on record their appreciation for the contribution made by employees at all levels.

For and on behalf of the Board of Directors

Saurabh Chandra

Chairman

Mumbai July 13, 2017

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Mar 31, 2016

Dear Shareholders,

The Board of Directors is pleased to present the Fourteenth Annual Report on the business and operations of your Company along with the audited statement of accounts and the Auditors'' Report for the financial year ended March 31, 2016 (FY16/year under review). The highlights of the financial results for the year under review are given below:

FINANCIAL RESULTS

(Rs. in Million)

Standalone Consolidated

Particulars 2015-16 2014-15 2015-16 2014-15

Total Income 3,326.70 3,322.71 3,333.23 3,326.40

Total Operating Expenditure 1,582.80 1,349.11 1,582.85 1,349.16

Profit before Interest, depreciation, exceptional 1,743.90 1,973.60 1,750.38 1,977.24 items and tax

Less: Depreciation 245.86 259.33 245.86 259.33

Less: Interest 0.38 13.73 0.38 13.73

Profit before exceptional items and tax 1,497.66 1,700.54 1,504.14 1,704.18

Less : Exceptional Items 666.76 - 666.76 -

Profit after exceptional items but before tax 830.90 1,700.54 837.38 1,704.18

Less : Provision for tax 412.62 450.01 413.46 450.09

Profit after tax 418.28 1,250.53 423.92 1,254.09

Add: Share of profits of associate - - 0.86 3.58

Add/(Less): Share of minority interest - - - 0.01

Profit for the year 418.28 1,250.53 424.78 1,257.68

Add: Balance of profit of earlier years 7,698.43 7,242.69 7,723.73 7,260.79

Balance available for appropriation 8,116.71 8,493.22 8,148.51 8,518.47

Less: Appropriations

- Final dividend (Proposed) 331.49 509.98 331.49 509.98

- Tax on Dividend 69.34 101.97 69.34 101.97

- Transfer to General Reserve - 125.05 - 125.05

- Depreciation adjustments due to change in useful life of fixed assets (net of Tax thereon) in - 57.79 - 57.79 accordance with requirement of Schedule II of the Companies Act, 2013

Balance carried to Balance Sheet 7,715.88 7,698.43 7,747.68 7,723.68

Earnings per share (Rs.): Basic 8.23 24.64 8.36 24.78

Diluted 8.23 24.63 8.36 24.77

The audited financial statements for FY16 are recommended for adoption by the shareholders at the ensuing Annual General Meeting (AGM).

RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS

Your Company, India''s No. 1 commodity futures exchange, offers a neutral, secure and transparent online trading, clearing and settlement of commodity futures transactions, thereby providing price discovery mechanism and enabling price risk management through scalable technology platform framework. There was no change in the nature of business of your Company during the year under review. Your Company enjoys a competitive edge due to its domain expertise, experienced leadership team, step ahead in innovation and product mix, multiple domestic and international alliances and robust business model with extensive reach of 709 SEBI-registered members having 49,638 Authorised Persons, operating through 585,190 terminals including Computer-to-Computer Link (CTCL) across 1,705 cities/towns across India as at March 31, 2016.

Your Company, during the year under review, continued to retain a market share of over 84% in terms of the value of commodities futures traded (Source: SEBI Bulletin, April 2016). The average daily turnover during FY 16 was Rs.219.23 billion (single side) as against Rs.203.28 billion during the financial year 2014-15 (FY15/previous fiscal), registering a growth of 7.85%, with a total of 0.33 million clients trading on the Exchange. The total turnover of commodity futures traded on your Exchange stood at Rs.56,341.94 billion in FY16 as against Rs.51,837.07 billion during FY15, registering an increase of 8.69%. The number of contracts traded on your Exchange in FY16 stood at 234.23 million as compared with 148.58 million for FY15, an increase of 57.65%.

MCX crude oil futures, MCX crude oil mini futures, MCX silver micro futures, MCX natural gas futures and MCX copper futures were amongst the top 20 commodity futures and options contracts in the global ranking of commodity futures contracts in Calendar Year 2015 (CY15). (Source: FIA Annual Volume Survey March 2016).

The market share of the Exchange, amongst all national exchanges offering commodity derivatives trading marginally increased to 84.3% in FY16 from 84.1% in FY15.

Despite fall in international prices of commodities mainly traded on its platform, your Exchange, as at December 31, 2015, was ranked sixth in the world in terms of number of contracts traded through commodity futures exchanges, as against seventh position at the end of December 31, 2014 (Source: FIA Annual Volume Survey March 2016). Your Company has been able to achieve this rank by clocking about 62% year-on-year growth in the number of contracts traded, which touched 216.3 million during CY15.

For FY16, your Company''s (standalone) total in come stood at Rs.3,326.70 million as compared to Rs.3,322.71 million during FY15, mainly attributable to fall in prices of key commodities traded on your Exchange and rising interest in other asset classes. The operating income during the year under review was Rs.2,349.28 million as against Rs.2,224.86 million in FY15. Other income during FY16 was Rs.977.42 million as against Rs.1,097.85 million in the previous fiscal, the reduction in income during FY16 was mainly due to the lower interest income on investments on account of fall in general interest rates in the economy. The net profit after tax for the year ended March 31, 2016 stood at Rs.418.28 million as against Rs.1,250.53 million in FY15. The lower net profit of FY16 is mainly attributable to two exceptional items, namely (i) the aggregate loss of Rs.610.45 million due to diminution and provision on account of the investments in Metropolitan Stock Exchange of India Limited (MSEI) (formerly MCX-Stock Exchange Limited) and (ii) transfer of penalties to Multi Commodity Exchange Investor (Client) Protection Fund (IPF) for earlier fiscals (i.e. 2007-08 to 2011-12) amounting to Rs.56.31 million, pursuant to regulatory requirements. For details please refer Note no. 34(b) of notes forming part of the standalone financial statements and/or Note no.35(b) of notes forming part of the consolidated financial statements of the Annual Report. The net worth (including Settlement Guarantee Fund) as at March 31, 2016 stood at Rs.13,918.47 million.

REGULATORY CHANGES: MERGER OF FMC WITH SEBI

The commodity derivatives exchanges which were regulated by the Forward Markets Commission (FMC) under the Ministry of Finance, Government of India are, consequent upon the merger of FMC with the Securities and Exchange Board of India (SEBI) with effect from September 28, 2015, being regulated by SEBI. Upon the said merger and the consequent repeal of Forward Contracts (Regulation) Act, 1952 (FCRA), your Company, being a recognised association under FCRA, is now deemed to be a recognised stock exchange under the Securities Contracts (Regulation) Act, 1956 (SCRA). The rules, directions, guidelines, etc., issued by FMC or the Central Government are to remain in force for a period of one year from September 28, 2015 or till such time as notified by SEBI. Accordingly, pursuant to the power vested for regulating stock exchanges, SEBI has vide circular dated November 26, 2015, stipulated timelines for commodity derivatives exchanges complying with various provisions of SCRA, the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, (SECC Regulations) and SEBI Circular no. CIR/MRD/ DSA/33/2012 dated December 13, 2012, on ''Procedural Norms on Recognition, Ownership and Governance for Stock Exchanges and Clearing Corporations'' (Procedural Norms). SEBI has allowed time up to one year from September 28, 2015 for commodity exchanges to comply with, barring certain requirements, as have been notified by SEBI and applicable to stock exchanges.

The SECC Regulations, inter alia, prescribe the eligibility for acquiring or holding shares by stakeholders who need to comply with the fit and proper criteria provided in the SECC Regulations.

Further, SEBI has, vide its circular dated January 01, 2016, issued detailed guidelines for monitoring the shareholdings in listed stock exchanges. The said circular, inter alia, prescribes modalities to ensure compliance with the provisions of SECC Regulations by the listed stock exchange and depositories. Your Company, being the only listed stock exchange, has implemented the same to the extent possible and for remaining aspects is coordinating with the National Securities Depository Limited, Central Depository Services (India) Limited, BSE Limited (BSE), the National Stock Exchange of India Limited (NSE) and Karvy Computershare Private Limited, the Company''s Registrar and Share Transfer Agents.

The presence of SEBI as the market regulator is expected to help build the confidence in the market and trust amongst all the financial and commodity markets ecosystem stakeholders and make the commodity markets more vibrant and build a level-playing field across both the commodities and securities markets. The merger of regulators has changed the landscape of commodities derivatives market in India, paving the path for introduction of new products in commodity derivatives market, and likely participation of institutions such as banks, mutual funds and insurance companies.

Apart from stronger regulation of the commodity market, the changes in the legal structure governing the commodity derivatives market hold a lot of promise for your Company. As commodity derivatives are classified as ''securities'' under SCRA, there is no legal bar on introducing additional types of derivative products, subject to regulatory approval. The Union Finance Minister, while presenting the Budget 2016, announced that new derivative products will be developed by SEBI in the commodity derivatives market. Thus, we could witness the launch of new types of derivative products such as commodity options and trading in commodity indices in the Indian commodity derivative market as soon as the regulatory guidelines for the same are announced.

SEBI has introduced measures in commodity derivatives markets to bring the exchanges on par with those in commodity derivatives securities markets. Details of these measures are included in the section titled ''Initiatives and Outlook'' in this Report.

PARTICULARS UNDER THE FORWARD CONTRACTS (REGULATION) ACT, 1952 READ WITH THE FORWARD CONTRACTS (REGULATION) RULES, 1954

As the Exchange was under regulatory ambit of FMC up to September 27, 2015, and in terms of the provisions of Section 9(2) of FCRA read with Rule 12 of the Forward Contracts (Regulation) Rules, 1954, commodity exchanges were required to include certain particulars in their Annual Reports. The Company has included the requisite particulars as Annexure I to Annexure VIII to the Directors'' Report.

RISK MANAGEMENT AND RISK MANAGEMENT POLICY

SEBI has permitted commodity exchanges to continue with the existing arrangement for clearing and settlement of trades, requiring them to transfer the functions of clearing and settlement of trades to a separate clearing corporation within three years from September 28, 2015. However, subject to receipt of requisite approvals, your Company is taking effective steps to transfer these functions to a separate clearing corporation, much in advance. Pending the transfer of clearing and settlement functions, your Company has complied with SECC Regulations relating to risk management. Your Board has re-constituted the Risk Management Committee in line with SECC Regulations, which was erstwhile constituted as mandated by FMC. The said Committee as on the date of this Report comprises one Independent Director, one Shareholder Director and one Independent External Expert. The constitution of the said Committee as at March 31, 2016 is covered in Annexure I to this Report. A comprehensive Risk Management Policy for managing different risks including business risk, default risk, settlement risk, market risk, legal risk, operational risk, technological risk and delivery risk has been approved and is being implemented.

Your Company''s operations are highly technology dependent. As part of risk mitigation plans your Company has focused its attention on ensuring uninterrupted services by strengthening its technology infrastructure to avoid instances of failure. Your Company has its Data Centre in Mumbai. Its Disaster Recovery Site (DRS) at New Delhi has been recently upgraded. Further, your Company has setup a Near Site in Mumbai with synchronous data replication to achieve zero data loss in case of any eventuality.

Your Company has strengthened its Business Continuity Plan (BCP) and regularly conducts mock drills to test readiness and effectiveness of IT infrastructure at its Data Centre as also its DR site. Details of some of the risks and their impact on your Company''s business are covered in the Management''s Discussion and Analysis section of the Annual Report.

INVESTOR (CLIENT) PROTECTION FUND

Your Company has established Multi Commodity Exchange Investor (Client) Protection Fund Trust (IPF) to protect and safeguard the interests of investors (clients) by meeting their eligible/legitimate claims on account of default by any trading and clearing member of the Exchange. The interest income received by investment of surplus funds of IPF is used for meeting expenses for imparting investors (clients) education, conducting awareness programmes, undertaking research or such other programmes as may be specified by SEBI and jointly undertaken with SEBI or the Company alone. As on March 31, 2016, the corpus of IPF Trust stood at Rs.1,186.70 million. Details of transactions entered into with IPF are disclosed as per Accounting Standard 18 (AS-18) in the financial statements of your Company.

SETTLEMENT GUARANTEE FUND

Pursuant to circular dated March 14, 2014 issued by FMC with respect to the Settlement Guarantee Fund (SGF), stress tests are required to be performed at the end of every calendar quarter, including the financial year end, to determine the adequacy of balance in SGF to meet claims made under SGF. Accordingly, based on the stress tests performed at the end of FY16, the balance in SGF was determined to be adequate and hence no contribution to SGF has been made during the year under review.

Further, pursuant to the then directives of FMC, settlement related penalties and fines amounting to Rs.8.33 million (net of tax) and income of Rs.106.20 million (net of tax) earned from earmarked SGF investments were credited to the SGF during the year. Accordingly, the cash component of SGF stood at Rs.1,879.25 million as at March 31, 2016 after effecting the aforesaid transfers, and net addition of Base Minimum Capital of Rs.14.43 million, reduced by appropriations during the year from SGF of dues amounting to Rs.120.87 million of defaulting members.

WAREHOUSING

To cater to the storage requirements of various members of the Exchange and their respective constituents/depositors who are willing to store goods and give delivery on Exchange platform, your Company has made necessary warehousing and logistics arrangements with Warehouse Service Providers (WSP). Your Exchange co-ordinates with WSPs and undertakes hiring, audit and inspection of warehouses for safe storage and preservation of goods deposited by various business participants for delivery on its platform.

Currently, your Company operates with three WSPs for facilitating physical deliveries in agricultural commodities, viz., Sohanlal Commodity Management Private Limited, Origo Commodities Private Limited and Yamada Logistics Private Limited. As on March 31, 2016, your Exchange has accredited 28 warehouses of these three WSPs. Out of the 28 warehouses, 12 warehouses are registered with the Warehousing Development & Regulatory Authority (WDRA) and 16 warehouses are in different stages of registration. The warehouses, as on the date of this Report, are located at Jalgaon, Jalna, Yavatmal in Maharashtra and Kadi, Rajkot in Gujarat for Cotton Bales, Vandanmedu in Kerala for Cardamom and Barabanki and Chandausi in Uttar Pradesh for Mentha Oil.

Your Company operates with Lemuir Secure Logistics Private Limited for facilitating physical deliveries in bullion. The vaults of this agency are located at Ahmedabad, Mumbai and New Delhi.

SHARE CAPITAL

There was been no change in the share capital of your Company during the year under review. As on March 31, 2016, the paid-up share capital of your Company stood at Rs.509.99 million comprising 50,998,369 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 any shares (including sweat equity shares) to its employees under any scheme save and except transfer of shares by the ESOP trust to eligible employees pursuant to the Employee Stock Option Scheme (ESOP 2008).

DIVIDEND

Your Directors have recommended, for the financial year ended March 31, 2016, a dividend at the rate of Rs.6.50 per equity share on a face value of Rs.10 per share, aggregating Rs.331.49 million, subject to the approval of shareholders at the ensuing AGM. Though the rate of proposed dividend at 65% is lower as compared to 100% declared for the previous financial year, the outgo on account of the proposed dividend and tax thereupon to be paid by the Company aggregates Rs.400.83 million (including the Dividend Distribution Tax of Rs.69.34 million), which works out as payout of 96% of the profit after tax for the year ended March 31, 2016 as against Rs.611.95 million for FY15 (49% payout).

TRANSFER TO RESERVES

For the year ended March 31, 2016, your Directors do not propose to transfer any amount to the General Reserve. An amount of Rs.7,715.88 million is proposed to be retained as a surplus in the statement of Profit and Loss Account under the heading ''Reserves and Surplus''

DEPOSITS

Your Company had not invited any deposits from the public, and as such, no amount on account of principal or interest related thereto was outstanding as on the date of the Balance Sheet i.e., March 31, 2016.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Your Company has, during the year under review, not given any loans, guarantees or provided security and has not made any investments in any body corporate in excess of limits specified under Section 186 of the Companies Act, 2013. The details of investment in MSEI, consequent to conversion of warrants into equity shares of MSEI, are given in the later part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The audited annual Consolidated Financial Statements, which incorporates the figures based on the financial statements received from your Company''s subsidiary and Associate as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard 21 (AS-21) - ''Consolidated Financial Statements'', Accounting Standard 23 (AS-23) - ''Accounting for Investments in Associates in Consolidated Financial Statements'' as notified under the Companies (Accounting Standards) Rules, 2006, the Listing Agreement and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), as applicable and as prescribed by SEBI forms part of this Annual Report, and are reflected in the consolidated accounts of your Company. The said details are more particularly covered in the Notes to Accounts in the Annual Report.

SUBSIDIARIES AND ASSOCIATES

In accordance with Section 129(3) of the Companies Act, 2013 your Directors have prepared consolidated financial statement of your Company and its subsidiary company(ies) which is forming part of Annual Report. The Consolidated Financial statement includes financial information of its subsidiary Company i.e. Multi Commodity Exchange Clearing Corporation Limited (''MCX CCL'') for the entire year and its associate i.e. Metropolitan Clearing Corporation of India Limited (MCCIL) (earlier known as MCX SX Clearing Corporation Limited) till June 30, 2015. A report on the performance and financial position/salient features of the Subsidiary Company and Associate, as per the Companies Act, 2013 is provided as Annexure IX to this Report.

SUBSIDIARIES:

Multi Commodity Exchange Clearing Corporation Limited: Multi Commodity Exchange Clearing Corporation Limited (MCX CCL), a wholly-owned subsidiary of your Company, was set up for the purpose of having a separate clearing house to provide services such as clearing and settlement of trades and guaranteeing counter party risk. Its present paid-up capital is ''60 million. As on date, MCX CCL has not commenced business. In terms of circular dated November 26, 2015 issued by SEBI, commodity derivatives exchanges shall transfer the functions of their clearing and settlement of trades to a separate clearing corporation within three years (i.e. September 27, 2018). Till then, the exchanges may continue with the existing arrangement for clearing and settlement of trades.

Your Company proposes to operationalise MCX CCL by infusion of additional capital to meet the minimum capital criteria required for a clearing corporation and put in place systems and processes to enable it to commence its operations during the financial year 2017-18. Necessary steps for ensuring this are being taken.

Shareholders interested in obtaining a copy of the audited annual accounts of MCX CCL may write to the Company Secretary at the Company''s registered office. Copies of the annual accounts of your Company and that of MCX CCL would be kept at the registered office of your Company for inspection by any shareholder.

SME Exchange of India Limited: SME Exchange of India Limited (SME), a subsidiary of your Company was set up with paid-up capital of Rs.1 million, to provide a platform for transacting, clearing and settlement of trades in small and medium enterprises segment.

However, considering the non-commencement of its business since incorporation and there being no possibility of commencing its business in the foreseeable future, the members of SME, approved the members'' voluntary winding up and the appointment of a liquidator for the same.

The liquidator has realised all the assets, paid off the liabilities and returned the share capital to the respective shareholders. Further, the members of SME at their final General Meeting held on March 28, 2016, have approved the accounts giving details about the manner in which the winding up has been conducted and disposal of realised assets, as submitted by the Liquidator. The requisite filing with the Registrar of Companies and the Official Liquidator has been done. Final order of dissolution is awaited.

Further, neither the Managing Director and Chief Executive Officer nor the Whole-time Directors of your Company receive any remuneration or commission from its subsidiary companies.

Associate:

Metropolitan Clearing Corporation of India Limited (MCCIL) earlier known as MCX SX Clearing Corporation Limited: MCCIL, a subsidiary of MSEI was an associate of your Company as per Accounting Standard- 23, till July 1, 2015. Consequent to the rights issue and resultant increase in MCCIL''s paid-up capital, initially from Rs.250 million to Rs.450 million and subsequently from Rs.450 million to Rs.700 million your Company''s stake in MCCIL was reduced from 26.00% to 14.44% on July 02, 2015 and from 14.44% to 9.29% on October 01, 2015. Consequently, MCCIL ceased to be an associate of your Company effective from July 02, 2015.

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 the audited annual accounts of MCX CCL has been placed on the web site of your Company, under URL - https://www.mcxindia.com/docs/default-source/ investor-relations/mcx_annual_report_fy2016.pdf

Save and except as mentioned above and elsewhere in the Report, during the year under review, there have been no companies which have become or have ceased to be subsidiaries or associate companies of your Company.

MANAGEMENT''S DISCUSSION AND ANALYSIS STATEMENT

Management''s Discussion and Analysis Statement, as stipulated under Regulation 34(2)(e) of the Listing Regulations forms part of this Annual Report.

INITIATIVES AND OUTLOOK

The year 2015-16 witnessed one of the profound changes in the evolution of the commodity derivatives market in India. FMC was formally merged with the SEBI on September 28, 2015 in line with the announcement made in the Union Budget 2015-16. Similarly, with the passage of the Finance Act, 2015, commodity derivatives were brought under the ambit of SCRA. Commodity derivatives are now being re-defined in a manner which is wider in scope than what was defined in FCRA. More significantly, all recognised associations under the FCRA are deemed to be recognised stock exchanges under SCRA.

During the year, the regulatory authorities, i.e. the erstwhile FMC and SEBI, undertook various policy measures to improve market transparency, accessibility and participation and to protect clients'' interests.

With a view to synchronize practices at commodity derivatives exchanges with those at stock exchanges, a series of regulatory initiatives have been effected in the market by SEBI, by strengthening risk management and other parameters to augment the process of market development.

An important policy change pertains to the definition of ''commodity derivatives'' under SCRA. This change in the definition would facilitate introduction of new products such as options and indices, and products on weather and freight, etc. A detailed analysis with respect to the same is covered under this section and in the Management''s Discussion and Analysis portion of the Annual Report.

Measures taken by erstwhile FMC, SEBI and the Government of India in the area of commodity derivative markets are listed below:

- SEBI by its circular dated January 01, 2016 has brought in comprehensive guidelines for monitoring shareholding in commodity derivatives exchanges and to ensure compliance with the requirements under SECC Regulations.

- Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India has issued a circular for Consolidated FDI Policy of 2016 (Effective from June 07, 2016) wherein composite caps for all types of foreign investments, direct and indirect falling under automatic route of 49% has been prescribed for Commodity exchanges.

- The Department of Industrial Policy & Promotion (FC-1) Section, Government of India, vide Press Note No. 8 (2015 Series) dated July 30, 2015 has, with a view to bring uniformity and simplicity across all sectors in its FDI Policy, stipulated with effect from May 12, 2015 a composite cap for foreign investments. In terms of paragraph no. 6.2.18.4.2 of the said Press Note, the composite cap of 49% for all types of foreign investments - direct and indirect falling under automatic route has been prescribed for commodity exchanges.

- In terms of SECC Regulations, no single foreign investor can invest more than 5% in the equity of stock exchanges. The Union Cabinet at its meeting held on July 27, 2016 has given its approval for raising foreign shareholding limit from 5% to 15% in stock exchanges. The Cabinet has also approved the proposal to allow foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges. Necessary circulars, notifications etc. are awaited in this regard. This limit would the applicable to commodity exchanges also.

- Circulation of RBI notification of May 28, 2015 by FMC, which advised banks to encourage large agricultural borrowers to hedge their risks on agricultural commodities. Towards this end, FMC suggested exchanges to conduct joint awareness programmes with nationalized banks.

- Permitting exchanges to utilize the interest portion of their IPF corpus for maintenance of price ticker boards installed by the respective exchanges under the Price Dissemination Project.

- Allowing exchanges to utilize the interest income of IPF for conducting programmes on investor education and awareness, including a targeted campaign about dabba trading.

- Revision in closing time of trade timings in internationally linked agricultural commodities to 9.00/9.30 p.m. from 11.00/11.35 p.m. (depending on the daylight savings in the U.S.) based on feedback received from exchanges. The revised trade timings on national commodity derivatives exchanges came into effect from July 13, 2015.

- SEBI, by its circular dated November 26, 2015, announced time lines for compliance with various provisions of securities laws by commodity derivatives exchanges.

- Mandated a review of capacity planning framework to ensure availability of exchange infrastructure, especially the trading, clearing and settlement systems at all times and not limited by capacity constraints.

- All existing members of commodity exchanges who satisfy the eligibility requirements of membership to apply for SEBI registration by December 28, 2015. Further, members were required to meet the eligibility criteria as specified under Rule 8 of the Securities Contracts (Regulation) Rules, 1957 (SCRR) by September 28, 2016. Regulatory fees of Rs.200 per million (Rupees) of turnover to be paid by members dealing in commodity derivatives from September 28, 2015.

- Comprehensive risk management framework implemented with the objective of aligning and streamlining the risk management framework across national commodity derivatives exchanges. Extreme Loss Margin of 1% was introduced.

- Commodity derivatives exchanges instructed to comply with the guidelines issued by SEBI for Annual Systems Audit, Business Continuity Plan (BCP) and Disaster Recovery (DR) to ring-fence exchanges from potential disasters that could disrupt trading systems and that may have an adverse effect on market integrity and the confidence of investors. These guidelines were earlier applicable to stock exchanges.

- Commodity derivatives exchanges to comply with various circulars issued earlier by SEBI for Investor Grievance Redressal System and Arbitration Mechanism, in line with the securities markets.

- To strengthen the testing of software before deployment in order to avoid any trading disruptions due to software malfunctions, SEBI has mandated that the provisions of its earlier circulars for securities markets on testing of software used in or related to Trading and Risk Management need to be complied by the commodity derivative exchanges.

- Revision in Daily Price Limits and Position Limits for agricultural commodity derivative contracts.

- Suspension oftrading in forward contracts.

- Guidelines for streamlining the provisions of modifying client codes after execution of trades on national and regional commodity derivative exchanges in line with the practices in the securities market.

- To increase transparency in the dealings between brokers and clients in the commodity derivatives markets, SEBI issued circular dated April 25, 2016 to align the provisions relating to proprietary trading in the commodity derivatives markets in line with the securities markets.

- Guidelines on cyber security and cyber resilience framework of national commodity derivative exchanges, to bring the cyber security framework of commodity exchanges at par with stock exchanges.

- Securities and Exchange Board of India IFSC Guidelines, 2015 were issued, which specified that''commodity derivatives'' would be eligible as securities for trading on stock exchanges operating in International Financial Services Centers (IFSC).

- Mandatory requirements/Exit Policy issued for commodity derivatives exchanges.

- The Listing Regulations, which, inter alia, mandates listed companies to disclose in their Annual Reports their commodity price risk and hedging activities.

- In January 2016, SEBI constituted an advisory committee, called the Commodity Derivatives Market Advisory Committee to discuss issues relating to regulation and development of commodity markets and suggest ways to address them. It has representation from the major exchanges, including your Company and the regulator, apart from select subject matter experts

APPROVAL FOR THE GOODS AND SERVICES TAX

The Constitution (122nd Amendment) Bill, 2015 for the roll out of the Goods and Service Tax (GST) was passed by the Lok Sabha on August 08, 2016 after it was passed earlier by the Rajya Sabha. Upon implementation of the GST, it has the potential to bestow significant gains to the commodity derivatives market. Currently, a plethora of state and central level indirect taxes are applicable to the trades done on the commodity derivative markets, rendering it inefficient with cascading effect on the cost of participation in these markets. A significant cost in trading of commodities across state borders arises due to taxes imposed on inter-state movement of commodities. Commodities attract Octroi when they enter the civic limits of cities, adding to other mandatory transaction costs. Moreover, differential state-level taxes such as value added tax (VAT) also distort the trade of commodities and make commodity derivatives an ineffective tool for hedging. These differential taxes mean that economic decisions regarding storage and trade are influenced by tax differences across states rather than being guided by pure economic rationale. For instance, the value added tax that a gold trader pays on purchase of gold is set-off/adjusted when the said trader sells the same gold, but only as long as both transactions take place in the same state. If the second transaction occurs in a different state, the said trader cannot get the benefit of set-off. Such a taxation system is tantamount to double taxation, which not only breeds inefficiency in transacting in commodities but also prevents the creation of a pan-Indian market for commodities. Hopefully, the GST regime will remove these anomalies.

OPPORTUNITIES FOR THE COMPANY

Your Company is committed to explore and exploit all opportunities available in the commodity derivatives market. With the policy changes as enumerated above and introduction of new products, this potential may be realized soon. Your Company is taking all possible steps to realize this potential.

To adopt the best global practices in its operations, product designing and processes, your Company has tied up with several global institutions. During the year, your Company and Chicago Mercantile Exchange (CME) Group signed a Memorandum of Understanding (MOU) on various activities of cooperation and have explored potential business opportunities, including a joint viability study being undertaken for setting up operations in the International Finance Service Center in India. Under this MOU, various initiatives between your Company and CME Group are proposed, including the establishment of a joint working group to explore opportunities to develop and market new products and services for the US and Indian markets, as well as collaboration on customer education.

Your Company is taking effective steps to extend Licensing Agreement between your Company and CME Group which would enable settlement of your Company''s Rupee denominated Crude Oil and Natural Gas contracts basis CME group''s NYMEX prices to cover new products.

Your Company and GIFT SEZ Limited, a wholly owned subsidiary of Gujarat International Finance Tec-City Company Limited (GIFTCL) at GIFT City, Gandhinagar signed a MOU in August 2015 for setting up of an International Exchange that will provide an electronic platform for facilitating trading, clearing and settlement of securities, commodities, interest rates, currencies, other classes of assets and derivatives to international investors in GIFT SEZ-IFSC. Your Company would take further steps to set up the said international exchange once the regulatory guidelines and other policies of the government are issued for entities to be set up at the GIFT City.

In April 2016, an addendum was signed to the existing MOU between your Company and China-based Dalian Commodity Exchange to extend strategic co-operation.

During the year under review, your Company has signed MOUs with eight educational universities and institutions - Amity Business School (Uttar Pradesh), Banasthali University (Rajasthan), Chitkara University (Punjab), Christ University (Karnataka), ITM Group of Institutions (Maharashtra), KIITS School of Rural Management (Odisha), Kredent Eduedge (West Bengal) and N. L. Dalmia Institute of Management Studies and Research (Maharashtra) thereby re-emphasizing its commitment toward financial literacy in commodity derivatives and its endeavour in reaching out to a larger number of market participants.

Subsequently, since April 01, 2016, MoUs have been signed with Mandsaur University in Madhya Pradesh, Marwari University in Gujarat and Vinobha Bhave University in Jharkhand.

In view of the need for spreading education about the commodity market, your Company started offering its flagship training and certification programme on commodity markets, MCX Certified Commodity Professional (MCCP) programme examination in two regional languages - Gujarati and Hindi, besides English. In all, during FY16, 1,228 candidates applied for taking the MCCP examination and 700 candidates had cleared the same.Till the date of this report since April 1, 2016, 228 candidates have applied for, out of which 135 candidates have cleared the MCCP examination. Your Company also conducted 5 development programs during the year for the faculty members of Banasthali University in Rajasthan, Christ University in Karnataka, ICFAI Institute for Higher Education in Telangana, KIITS School of Rural Management in Odisha and ITM Group of Institutions in Maharashtra. Additionally, awareness programmes for students pursuing higher education were conducted in 5 institutions during the year.

COMMITMENT TO QUALITY

With a quest to achieve excellence in products and services offered, your Company continues to monitor and maintain its effective and well-crafted Quality Management Framework (QFM). QFM is aligned to the business objectives of the Exchange, and ensures that your Company is focused on maintaining Quality Centric Approach for its members and clients. Your Company is focused on continually improving its existing robust processes and quality services. Over the years, your Company has evolved mature processes and improving them continuously, which assist in commendably reducing unpredictability across various business operations. Your Company successfully cleared the ISO 9001:2008 Surveillance Audit this year, after rigorous process audits across all its key operations. This showcases your Company''s dedication and commitment towards sustaining a customer centric and robust Quality Management System.

In line with your Company''s vision and commitment of ensuring information security and providing assurance to its stakeholders, your Company has developed and implemented simple, effective and robust processes and controls using latest international standard ISO/IEC 27001:2013 on Information Security Management System. It has also deployed a proactive Information Risk Management approach, and carries out risk assessment activities on a periodic basis. This year, Information Security Management System of your Company underwent stringent information security related audits, and successfully completed ISO/IEC 27001:2013 surveillance audit.

RESEARCH AND DEVELOPMENT

As a result of constant research and development, your Company continuously strives to offer new, innovative services and wide-ranging products using latest Information Technology in the realm of Commodity Futures. Moreover, your Company introduces various products like tick-by-tick data so as to meet the needs of a wide range of market participants. Your Company is also working on to shift its development and software test environments over cloud to make effective and efficient use of IT resources.

AWARDS

The initiatives for growth and market development taken by your Company have been recognized at various forums by several institutions. Your Company was honoured with the ''Best Commodity Exchange'' award at the 14th Commodity Futures Market Summit & Excellence Awards, organised by the Association of Chambers and Commerce of India (ASSOCHAM) in New Delhi on February 03, 2016. Your Company was also honoured with the ''Exchange of the Year for Investors Education and Awareness Award'' by the Commodity Participants Association of India (CPAI) on May 30, 2015 and with the ''Best Commodity Exchange'' award on December 01, 2015 at the India International Bullion Summit (IIBS) 2015 for its services to bullion industry.

ENVIRONMENTAL RESPONSIBILITY

Given the nature of its operations, your Company has a very low impact on the environment. Notwithstanding this, it is committed to minimising its environmental impacts through efficient use of natural resources, including electricity, which is the key touch point of the Exchange''s technology-driven business. Your Company has an effective Environmental Policy and is governed by it. Your Company believes that in order to meet the objectives of its Environmental Policy, employee commitment is imperative. Thus, your Company through its Corporate Social Responsibility (CSR) team creates awareness amongst employees and encourages them to adopt conservation practices. Your Company cleared the ISO 14001:2004 surveillance audit, and continues to monitor its Environment Management Plan, which is developed on the basis of the Environment Review conducted annually to assess the impact of the Company''s activities. Your Company has also developed an e-waste policy for the safe disposal of e-waste from its premises. Its tie-up with authorised e-waste recyclers helps it to dispose its e-waste in an eco-friendly manner. The e-waste disposal is in turn minimised through best practices in maintenance and re-use of resources.

CORPORATE SOCIAL RESPONSIBILITY

Your Board constituted a CSR Committee at its meeting held on December 26, 2013 and the same has been re-constituted from time to time. The Corporate Social Responsibility Policy guides the Company''s CSR approach including but not limited to rural development, women and children empowerment, promoting education, health care, sanitation, environment conservation, etc., and the same is available on your Company''s web link viz. URL: https://www.mcxindia.com/about-us/csr Your Company views CSR activities as an opportunity to serve the interest of community at large. The potential opportunities arising from CSR activities improve the welfare of the communities and people and enhance the value of your Company''s business interests and adds to the ''human touch''. This critical function goes beyond mere philanthropy, and promotes inclusion, the major plank of your Company''s business philosophy. Your Company has resolved to engage and motivate employees for active participation in the CSR activities of the Company. The CSR policy is in line with the activities mentioned under Schedule VII to the Companies Act, 2013. Your Company is implementing and monitoring the CSR activities in letter and spirit, and has approved projects for providing infrastructure for schools, empowerment/ training of women and youth, water shed programs, empowering farmers by strengthening the Gram Suvidha Kendra activities, etc. during the year.

During FY2016 the expenditure on CSR activities of the Company amounted to Rs.29.69 million, as against Rs.52.32 million, constituting 2% of the average of three years'' net profit (before tax) required to be spent in terms of Section 135(5) of the Companies Act, 2013.

The details of CSR activities and Annual Report on CSR activities under Section 135 of the Companies Act, 2013 along with the reasons for not being able to spend the balance of the prescribed amount are provided in Annexure X of this Report.

EXTRACT OF ANNUAL RETURN

An extract of Annual Return of your Company pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management & Administration) Rules, 2014 in Form MGT-9 is attached as Annexure XI to this Report.

CORPORATE GOVERNANCE

Your Company continues to be committed to good corporate governance aligned with the best corporate practices. The report on corporate governance, stipulated by Regulation 34 of Listing Regulations and certificate from a Practicing Company Secretary regarding compliance with corporate governance norms, forms part of this Annual Report. The Corporate Governance Report also contains certain disclosures required under the Companies Act, 2013.

ETHICS AND GOVERNANCE POLICIES

Your Company adheres to 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 Code of Conduct and Code of Ethics, Code of Conduct for Prohibition of Insider Trading, Vigil Mechanism/Whistle Blower Policy, Policy on Materiality of Related Party Transactions and on dealing with 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, Dividend Distribution Policy, Preservation and Retention of Documents Policy, Policy for Disclosure of Material Events or Information and policy relating to avoidance of conflict of interest.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Your Company believes in conduct of its affairs 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 Listing Regulations, the Board of Directors have implemented a vigil mechanism through adoption of Whistle Blower Policy. For further details, please refer Corporate Governance Report forming part of this Annual Report.

Your Company''s Board hereby affirms that no personnel of the Company have been denied access to the Audit Committee and that no complaints were received during the year under review.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The policy on materiality of related party transactions and dealings with related party transactions as recommended by the Audit Committee that was approved and adopted by the Board at its meeting held on February 13, 2015. The Policy is amended from time to time to incorporate the change/ amendments prescribed under various Laws, Rules and Regulations as are applicable to your Company. The same is uploaded on the website of your Company and may be accessed at the web link:

https://www.mcxindia.com/docs/default-source/investor-relations/ corporate-governance/amended_policy_on_related_party_transactions_ 05may2016.pdf?sfvrsn=2

All related party transactions entered into by your Company, are in the ordinary course of business and at arm''s length pricing basis.

All the related party transactions/financial commitments etc., entered into by your Company during the year under review, were placed and approved/ratified by the Audit Committee and/or by the Board, as applicable, in accordance with the Companies Act, 2013, the directions of FMC and Regulation 53(f) of Listing Regulations.

SEBI directions provide that every national commodity derivatives exchange shall credit penalties, other than the settlement related penalties, to its Investor Protection Fund, for all transactions executed on the Exchange. IPF is held in trust and managed by the Trustees, who are appointed as per the provisions of the Trust Deed and the Rules, Bye- Laws and Regulations of the Exchange. The transactions with IPF are regulated in accordance with the regulatory requirements/guidelines issued from time to time and is independently managed. Except for complying with the regulatory requirements, your Company does not have any pecuniary relationship with IPF. However, in view of clarification issued by Institute of Chartered Accountants of India, IPF is being treated as a related party and as such, transactions entered into by your Company with IPF entails a reporting requirement without the need for following other concomitance of a Related Party Transaction Policy. Accordingly, approval of shareholders is being sought at the ensuing AGM for the related party transactions with IPF.

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 to be reported under Section 188 (1) of the Companies Act, 2013 is appended in Form AOC - 2 as Annexure XII to this Report.

All Related Party Transactions as required under Accounting Standards 18 (AS-18) are reported in Note no. 28 of Notes to Accounts of the standalone financial statements and Note no. 29 of Notes to Accounts of the consolidated financial statements of your Company.

MEETINGS OF THE BOARD

During FY16, ten meetings of the Board of Directors were held. For further details, please refer Corporate Governance Report forming part of this Annual Report.

DIRECTORS

Your Company being a commodity futures exchange and now recognised as a ''deemed stock exchange'' as per SCRA is, inter alia, regulated by SEBI. The appointment of all Directors on the Board of your Company, was earlier with the approval of FMC and post its merger with SEBI, effective September 28, 2015, by SEBI.

As on the date of this Report, your Board of Directors comprises fifteen Directors, of which seven Directors are categorized as Public Interest Directors, seven Directors are Shareholder Directors (including President and Whole Time Director) and the Managing Director.

''Public Interest Director'', for a recognised stock exchange, 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 SEBI, is in conflict with his role and accordingly such directors may be categorized as ''Independent Directors'' for the purpose of and for fulfilling the conditions prescribed by the Companies Act, 2013 and the Listing Regulations.

Non-executive Directors are paid sitting fees for attending meetings of the Board and its committees which is within the limit as specified under the Companies Act, 2013 and the rules framed thereunder. They are reimbursed out-of-pocket expenses, if any, relating to travel and hotel accommodation required for the purpose of attending meetings of the Board or Committees.

Your Company has received confirmations from all its Public Interest Directors to the effect that each of them meets the criteria of independence as prescribed under Regulation 16 of the Listing Regulations as well as under Section 149(6) of the Companies Act, 2013. The nomination/appointment of Independent Directors/Public Interest Directors on the Board of your Company is also in accordance with the eligibility conditions prescribed by FMC/SEBI.

Further, all Directors have confirmed that they are ''Fit and Proper'' persons in terms of the SECC Regulations. Your Company has also obtained from all its Directors affirmation of adherence to Schedule IV of the Companies Act, 2013, disclosure under Section 184 of the Companies Act, 2013 in Form MBP-1, disclosure under Section 164 (2) of the Companies Act, 2013, details of membership/chairmanship in committees, annual declaration of independence, code of conduct, annual declaration relating to shareholding, disclosure of entering, if any, into futures contract in commodities, code of ethics, non-association with trading/clearing member, etc.

The Selection Committee for the Appointment of Managing Director of your Company has, after following the process of short listing candidates, interviewed the short listed candidates for appointment of the Managing Director and Chief Executive Officer. Thereafter, upon receipt of prior approval of SEBI, Mr. Mrugank Madhukar Paranjape (DIN: 02162026) was appointed as the Managing Director and Chief Executive Officer for a period of three years with effect from May 09, 2016. Details of Mr. Mrugank Madhukar Paranjape and the terms of his appointment including remuneration payable to him is given in the notice convening the ensuing AGM whereby the Company is seeking your approval for his appointment as a Director and as the Managing Director and Chief Executive Officer.

Mr. Parveen Kumar Singhal (DIN: 01237602), Joint Managing Director, who was steering the affairs of the Company during the vacancy in the position of the Managing Director since May 10, 2014 has been re-designated by the Board of Directors as ''President and Whole Time Director'' with effect from April 01, 2016.

The shareholders at their Thirteenth Annual General Meeting held on Tuesday, September 29, 2015 had appointed, subject to approval of SEBI, Ms. Padma Raghunathan (DIN: 07248423), Ms. Madhu Vadera Jayakumar (DIN: 00016921), Mr. Amit Goela (DIN: 01754804) and Mr. Hemang Raja (DIN: 00040769) as Shareholder Directors. Subsequently, upon receipt of approval of SEBI, Ms. Padma Raghunathan, Ms. Madhu Vadera Jayakumar and Mr. Amit Goela were appointed as Shareholder Directors with effect from February 04, 2016 and Mr. Hemang Raja with effect from June 30, 2016.

Your Directors are pleased to inform that your Company has three women Directors on its Board as against the stipulation of having at least one woman Director as mandated under the Companies Act, 2013.

Mr. Satyananda Mishra (DIN: 01807198) was appointed as an Independent Director on November 19, 2013 by FMC for a period up to March 31, 2016. SEBI has, in accordance with the provisions contained in SECC Regulations which provides for a term of 3 years for Public Interest Directors, extended the tenure of directorship of Mr. Satyananda Mishra, Public Interest Director, up to November 18, 2016, being the full term of 3 years.

Similarly, SEBI extended the term of directorship of Mr. Dinesh Kumar Mehrotra (DIN: 00142711), Public Interest Director, up to July 02, 2016 as against the term up to March 31, 2016 approved by FMC while appointing him on July 03, 2013 and the term of directorship of Mr. G. Anantharaman (DIN: 02229822), Public Interest Director, up to October 16, 2016, as against the term up to March 31, 2016 approved by FMC while appointing him on October 17, 2013. Mr. Dinesh Kumar Mehrotra has since retired at the end of his term on July 02, 2016.

Your Board of Directors acknowledges the contribution made by Mr. Dinesh Kumar Mehrotra at the deliberations of the Board, its committees, especially for his contribution in successfully steering the Company during the fallout of National Spot Exchange Limited and towards the business development of the Company.

Pursuant to receipt of approval of SEBI for appointment of Mr. Saurabh Chandra (DIN: 02726077) in place of Mr. Dinesh Kumar Mehrotra, the Board of Directors has inducted Mr. Saurabh Chandra as a Public Interest Director with effect from July 03, 2016.

Since Public Interest Directors are appointed for a fixed term by the regulator, they are not required to retire by rotation and they are not being reckoned in the computation of number of directors to retire by rotation at every AGM. Further, pursuant to the Procedural Norms, approval of shareholders is not be necessary for appointment of Public Interest Directors.

Ms. Pravin Tripathi (DIN: 06913463), Mr. Arun Kumar Nanda (DIN: 00010029), Mr. Subrata Kumar Mitra (DIN: 00029961) and Dr. Govinda Rao Marapalli (DIN: 01982343) continue as Public Interest Directors on the Board.

In accordance with the provisions of the Companies Act, 2013, Mr. M. A. K. Prabhu (DIN: 03195461) and Mr. Ajai Kumar (DIN: 02446976), who were appointed as Shareholder Directors with effect from October 14, 2014 and who have been longest in office since their appointment as such, shall be subject to retire by rotation at the ensuing AGM. Mr. M. A. K. Prabhu has indicated, consequent upon his retirement from the services of Canara Bank, that he does not intend to offer himself for re-appointment, whereas Mr. Ajai Kumar has expressed his willingness to seek re-appointment. Further, your Company has received a notice under Section 160 of the Act proposing candidature of Mr. Chengalath Jayaram (DIN 00012214) as a Shareholder Director of the Company.

KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013, as at April 01, 2015, Mr. Parveen Kumar Singhal, Joint Managing Director, Mr. Ajay Puri, Company Secretary and Mr. Sandeep Kumar Sarawgi, Chief Financial Officer were the Key Managerial Personnel (KMP) of the Company.

The designation of Mr. Parveen Kumar Singhal was changed to ''President and Whole Time Director'' with effect from April 01, 2016 and the following senior officials of the Company were identified to be the KMPs for a period of three years from the date mentioned against their names: Mr. Narendra Ahlawat, Senior Vice President - Market Operations from February 04, 2016, Mr. Rahi Racharla, Senior Vice President - Technology, from February 04, 2016, Mr. Krishnan Vishwanathan, Chief Regulatory Officer, from March 11, 2016. Effective from May 09, 2016, Mr. Mrugank Madhukar Paranjape, MD & CEO, is the KMP of the Company.

Mr. Sandeep Kumar Sarawgi, consequent to his resignation from the services of the Company has ceased to be an employee as well as a KMP with effect from August 08, 2016.

PERFORMANCE EVALUATION OF THE BOARD AND THE EVALUATION CRITERIA

In accordance with the provisions of the Companies Act, 2013 and the Listing Regulations, your Company has formulated criteria for performance evaluation of individual Directors, Board Committees and the Board as a whole. Further, Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters are included in the Nomination and Remuneration Policy.

A statement indicating the manner in which formal annual evaluation of the Directors, the Board and Board Committees has been made is set out in Annexure XIII to this Report.

AUDIT COMMITTEE

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

STATUTORY AUDITORS

M/s. Shah Gupta & Co., Chartered Accountants, Mumbai (Firm Registration No. 109574W with the Institute of Chartered Accountants of India), was appointed as statutory auditors by shareholders at their Thirteenth Annual General Meeting held on Tuesday, September 29, 2015 for a period of five years with effect from September 29, 2015, subject to ratification by the shareholders at every annual general meeting, at a remuneration, as recommended by the Audit Committee and approved by the Board of Directors of the Company.

Your Company has received from them the required certificate, pursuant to Section 139 (1) of the Companies Act, 2013 and the rules made thereunder, confirming their eligibility to be the auditors of the Company. The ratification of shareholders is being sought at the ensuing AGM for their continuing to be the statutory auditors as well as approval for their remuneration for their assignment for the year ending March 31, 2017.

AUDITORS'' REPORT

M/s. Shah Gupta & Co., Statutory Auditors appointed under Section 139 of the Companies Act, 2013 have audited the accounts of your Company for FY16, which forms part of the financial statements.

There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in their reports. Hence the need for explanations or comments by the Board does not arise.

The Statutory Auditors have recorded a Matter of Emphasis, details of which are given below.

Auditors'' ''Emphasis of Matter''

"We draw attention to Note 34(a) to the Financial Statements regarding the Company carrying the investment in warrants of Metropolitan Stock Exchange of India Limited (MSEI) aggregating to Rs.415.92 million at face value of Rs.1/- per warrant (after making provision of Rs.425.89 million for diminution in value of warrants) on the basis of the interim order of the Hon''ble Bombay High Court restraining MSEI from acting in any manner directly or indirectly in cancelling and/ or extinguishing the warrants or any rights relating thereto and as per the order, MSEI has deposited Rs.200.00 million in the Court. The Hon''ble Bombay High Court has also asked MSEI to deposit balance Rs.215.92 million vide its order dated October 13, 2015. MSEI, however, has filed Notice of Motion seeking stay on the operation and implementation of the October 13, 2015 order. Pending outcome of the matter, the investment in warrants of MSEI aggregating to Rs.415.92 million is considered realisable by the management. Our opinion is not qualified in respect of this matter"

Management Response, as given in Note 34(a) to the standalone financial statements

The Company, along with Financial Technologies (India) Limited (FTIL), an erstwhile anchor investor/promoter of the Company, held equity shares and warrants in Metropolitan Stock Exchange of India Limited (MSEI), (formerly MCX-Stock Exchange). As per the applicable SEBI regulations, MSEI was required to adjust its shareholding pattern so as to bring it within the limits prescribed by the SEBI regulations within the time prescribed, i.e. June 19, 2015. Towards this end, the Company made serious efforts to dispose off the warrants. However, these efforts were significantly hampered by several factors that reduced the marketability of MSEI''s warrants, such as consistently reducing market share and net worth which reduced the value and demand for MSEI''s shares and warrants. This made it difficult to dispose off the warrants. Since these factors were outside the Company''s control, the Company approached SEBI seeking an extension of time to dispose off the warrants. Also, in view of the merger of the SEBI and the FMC, the Company also requested SEBI to consider treating the Company on par with recognized Stock Exchanges so that the Company could hold upto 15% shareholding/warrants in MSEI. SEBI, however, did not grant the Company''s request. Despite these factors, the Company continued to make vigorous efforts to dispose off the warrants. The Company''s efforts, however, were thwarted by MSEI, who announced a rights issue of equity shares on May 29, 2015 at par i.e. at Rs.1 per share. Since the rights issue remained open until July 9, 2015, it was virtually impossible to dispose off all the warrants before June 19, 2015. Apprehending that MSEI would cancel the warrants and misappropriate the deposit placed by the Company with MSEI against the warrants, the Company filed a Suit against MSEI before the Hon''ble Bombay High Court seeking an injunction against cancellation of the warrants and appropriation of the deposit. The Company also sought refund of the amount of Rs.415.92 million, being the amount of deposit presently held by MSEI against the warrants. Vide its interim orders dated July 9, 2015 and July 10, 2015, the Hon''ble High Court restrained MSEI from cancelling and/or extinguishing the warrants or any rights relating thereto, and from dealing in any manner with the remaining deposit of Rs.415.92 million till further orders. The Hon''ble Court also restrained MSEI from taking any steps in pursuance of any Board resolution that MSEI may have passed for cancellation of the warrants. By a further order dated August 3, 2015, the Hon''ble Court recorded MSEI''s statement that MSEI would deposit a sum of Rs.200.00 million in Court within a period of four weeks, on a without prejudice basis, to establish its bona fides. The matter was heard on October 8, 2015 and the order pronounced on October 13, 2015. The Hon''ble Court, inter alia, has held that although the Company may have been deprived of its rights to trade the warrants for shares or trade the warrants for consideration after June 19, 2015 this does not mean that the extinguishment of the warrants would entail appropriation of the deposit. The Hon''ble Court has also held that the money admittedly belongs to the Company and there is no provision in law or in contract whereby MSEI could appropriate the money towards its own capital reserves. In view of the above, the Hon''ble Court has concluded that it would not be desirable to allow MSEI to retain the deposit pending trial of the Suit. Accordingly, the Hon''ble Court has made the Company''s Notice of Motion absolute and directed MSEI to deposit an additional sum of Rs.21,59,17,672/- to the credit of the suit account, within a period of eight weeks from the date of the Order. Thus, the total amount deposited by MSEI would be equal to Rs.415.92 million. This amount is to be invested in a fixed deposit with a nationalized bank pending hearing of the Suit ("October 13 Order").

On December 9, 2015, MSEI filed Appeal No. (L) 927 of 2015 before a Division Bench of the Bombay High Court against the October 13 Order. MSEI also filed Notice of Motion (L) No.3471 of 2015 seeking a stay on the operation and implementation of the October 13 Order, pending final hearing and disposal of the Appeal, inter alia, on the grounds that (a) the Company was aware that it had to divest its excess shareholding in the form of Warrants by June 19, 2015;

(b) MSEI was required to ensure compliance of applicable laws and regulations, and thus only cancelled the warrants as otherwise it apprehended being derecognized by SEBI; (c) MSEI had established its bona fides by not acting on its Board Resolution dated June 27, 2015 and also by depositing a sum of Rs.200.00 million with the Bombay High Court; and (d) Given that the Company''s warrants have not been cancelled and MSEI has been restrained from implementing its Board Resolution dated June 27, 2015, MSEI cannot be additionally called upon to deposit a further Rs.215.92 million in Court. The matter was listed on 17.02.2016, for hearing on the Notice of Motion filed in the said appeal. On December 10, 2015, MSEI also filed Notice of Motion (L) 3486 of 2015 in the Suit before the Single Judge seeking a vacation of the October 13 Order on the ground that MSEI has now passed a resolution withdrawing their earlier resolution of cancellation.

Vide an interim order dated December 11, 2015, the Division Bench extended the time given to MSEI for deposit of the amount of Rs.215.92 million till the next date of hearing. As the matter is yet to be heard on merits, this interim order granting further time to MSEI to deposit the money has been extended from time to time. In March, 2016, the assignment of the Judges changed and the matter was listed before a different Bench. However, in view of the fact that the earlier Division Bench had already heard the matter and was aware of the facts, both parties made a representation to the Ld. Chief Justice of the Bombay High Court seeking assignment of the matter to the same Division Bench. The parties are still awaiting necessary directions from the Ld. Chief Justice for re-assignment of the matter.

In view of the above, the Company has valued the warrants at its face value of Rs.1 each and brought down the carrying cost by Rs.425.89 million. As the Company was only able to sell 148,277,938 warrants to various parties/entities at bids below its carrying cost, a loss of Rs.134.83 million was incurred on the sale of these warrants. Further, based on the market price determined on a weighted average basis for the sale of warrants by MCX, the equity shares have been brought to the lower of cost and this aforesaid market value. This is as per the Company''s Accounting Policy on current investments and accordingly a provision of Rs.33.30 million has been made. The aggregate loss, diminution and provision of Rs.594.02 million on account of the investments in MSEI are exceptional in nature and were accordingly disclosed in the financial results for the quarter ended June 30, 2015. Further provision of Rs.16.43 million has been made in quarter ended March 31, 2016 towards equity shares investments as per Company''s Accounting Policy. The aggregate loss, diminution and provision on account of the investments in MSEI for FY 2015-16 is Rs.610.45 million. As at March 31, 2016, the Company held 6,65,99,408 equity shares of MSEI (valued at Rs.57.25 million at the rate of Rs.0.86 per share) and 41,59,17,672 warrants of MSEI (valued at Rs.415.92 million) and 65,00,000 equity shares of Metropolitan Clearing Corporation of India Limited (MCCIL) (formerly known as MCX-SX Clearing Corporation Limited (valued at Rs.65.00 million).

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Board had appointed M/s. Rathi & Associates, Practicing Company Secretaries, Mumbai as Secretarial Auditors of your Company to conduct Secretarial Audit for FY16.

In accordance with Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith and marked as Annexure XIV to this Report.

There is no qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditors in their report and hence does not require any explanation or comment by the Board.

INTERNAL CONTROL AND THEIR ADEQUACY

The Board has put in place various internal controls to be followed by your Company to ensure that the internal control mechanisms are adequate and are effective. The Board has also put in place state-of-the-art technology and has automated most of the key areas of operations and processes, to minimise human intervention.

The design, implementation and maintenance of adequate internal financial controls are such that it operates effectively and ensures the accuracy and completeness of the accounting records, relevant to the preparation and presentation that gives a true and fair view of the state of affairs of the Company and are free from material misstatements, whether due to error of omission.

The operational processes are adequately documented with comprehensive and well defined Standard Operating Procedures which inter alia includes the financial controls in the form of maker and checker being with separate individuals.

The Board has approved a scheme of financial sub-delegation to officials of your Company for incurring expenses. The Board with a view to ensure transparency, has also formulated various policies and has put in place appropriate internal controls for the procurement of services, materials, fixed assets, monitoring income streams, investments and financial accounting.

Various other measures include adherence to systemic controls, information security controls as well as role-based/need- based access controls. Further, the existing systems and controls are periodically reviewed for change management in the situations of introduction of new processes/change in processes, change in the systems, change in personnel handling the activities, etc.

The Audit Committee of the Company, comprising Public Interest Directors, periodically reviews and recommends the unaudited quarterly financial statements as also the annual audited financial statements of your Company. Your Company has appointed a firm of chartered accountants to conduct independent financial and operational internal audit in accordance with the scope as defined by the Audit Committee. The reports from the Internal Auditors are reviewed by the Audit Committee on periodic basis and the Internal Auditors have been advised to issue flash reports, if required. Further, all related party transactions are placed before the Audit Committee and are approved/ratified by it after deliberations.

MATERIAL CHANGES AND COMMITMENT

Material changes and commitments affecting the financial position of your Company which have occurred after March 31, 2016 and up to the date of this Report are covered at different sections of this Report. An update of the following matter is being provided as given below -

A. Metropolitan Stock Exchange of India Limited (erstwhile MCX Stock Exchange of India Limited)

The Hon''ble Bombay High Court (the High Court), before which your Company had filed a Writ Petition against MSEI heard the parties and by its final order passed on October 13, 2015 directed MSEI to deposit the balance sum of Rs.21,59,17,672/- with the Prothonotary & Senior Master of the High Court by December 08, 2015.

However, MSEI submitted to the High Court that it has since reinstated the warrants of Rs.415.92 million earlier cancelled by it, for which your Company had filed the writ petition, and had petitioned for refund of Rs.200 million deposited by it. The High Court is yet to hear the matter.

Further to details contained in Note no. 34 (a) of the Notes to Accounts forming part of the standalone financial statements for the year ended March 31, 2106, your Directors have to inform that MSEI has meanwhile, without prejudice to its rights, contentions and remedies at large and pending disposal of dispute before the High Court, has proposed that since your Company under the new regulator is deemed as a recognised stock exchange, it can enhance its stake in MSEI by converting the appropriate number of warrants and the balance amount shall be refunded to the Company by cancelling the remaining number of warrants or in the alternative, the excess warrants held by your Company be converted into equity shares of Metropolitan Clearing Corporation of India Limited (MCCIL), a subsidiary of MSEI, which would result in increasing the shareholding of your Company in MCCIL as your Company would need to avail the services of a clearing and settlement company such as MCCIL instead of operationalizing its own clearing corporation (MCX CCL) to comply with the regulatory requirements.

The Company evaluated both the proposals submitted by MSEI and considering the long-term impact of prolonging the litigation and keeping the larger interest of its stakeholders, was of the view that a mutual settlement would be a better option given the circumstances of the case. Accordingly, based on mutual interaction between the Company and MSEI officials in consultation with the counsels of the respective companies, a tentative agreement for an out-of-court consent and settlement terms is being discussed and if agreed, your Company may enhance its stake in MSEI by conversion of appropriate number of warrants, subject to the requisite regulatory approvals and that your Company would get a refund for the balance MSEI warrants held by it, which would thereafter stand cancelled. The said proposal would be finalised in consultation with the counsels of the Company and MSEI before being submitted to the High Court for approval.

B. Metropolitan Clearing Corporation of India Limited

As at the beginning of FY16, your Company held 65,00,000 equity shares constituting 26.00% of the paid up capital in MCCIL. Consequent to the increase in the paid-up capital of MCCIL from Rs.250 million to Rs.450 million, by way of a Rights Issue, in which your Company had not participated, the holding of your Company in MCCIL got reduced from 26.00% to 14.44% with effect from July 02, 2015. Accordingly, MCCIL is no longer an associate of your Company effective that date, in terms of Accounting Standard 23 (AS-23). Subsequently, MCCIL has made yet another Rights Issue effective October 1, 2015 by which its paid-up capital was increased from Rs.450 million to Rs.700 million. As the Company did not participate in this Rights Issue, its shareholding decreased from 14.44% to 9.29%. Your Company is making efforts to further dilute its shareholding in MCCIL and fully divest its holding in MCCIL.

C. In the matter of criminal complaint lodged by Mr. Ketan Shah pursuant to PWC Report and writ filed by the Company in the Bombay High Court

Pursuant to the order dated April 21, 2015 passed by Ld. Additional Chief Metropolitan Magistrate of the 22nd Court, Andheri, in the matter of Mr. Ketan Shah in CC No. 25/SW/2015, MIDC Police Station has registered an First Information Report (FIR) on April 25, 2015 against the erstwhile management of your Company, Financial Technology (India) Limited and others under various sections of the Indian Penal Code, 1860. Upon the request made by your Company for re-opening of the 11 complaints earlier closed by MIDC Police Station, MIDC Police Station informed that the complaints filed by your Company pursuant to the PwC (Price Waterhouse Coopers) Report have also been tagged in the above mentioned FIR. The enquiry is under way and your Company is awaiting for response from MIDC Police Station in the matter. Meanwhile, your Company has filed a writ petition before the Hon''ble Bombay High Court against the State of Maharashtra and Others, seeking a direction, inter alia, to set aside the transfer of complaints by Economic Offences Wing (EoW), Mumbai Police to MIDC Police Station and further to direct EoW to carry out investigation into the complaints in a time bound manner and place a report on the investigation before the Court. The said complaints were initially filed before EoW by your Company which the EoW has transferred to MIDC Police Station.

Further, your Company was also in receipt of letters from Mr. Ketan Shah dated February 10, 2016, February 11, 2016, February 27, 2016 and July 01, 2016 requesting immediate actions to preserve the interests of the Company and its shareholders. Mr. Shah has further stated in his letters that a closure report (C Summary) has been filed by the Investigating Officer of Andheri MIDC Police Station in the said complaints.

Meanwhile, your Company has filed a criminal application in the aforesaid Writ Petition praying, inter alia, to pass an order and injunction, restraining MIDC Police Station from closing the investigation into the said complaints and to direct the Additional Commissioner of Police, Economic Offences Wing, Mumbai Police, to take over the investigation into the complaints.

Your Company has endeavoured to take all the possible legal measures in order to protect the interest of the Company and its stakeholders.

D. Mentha oil matters

The Deputy Commissioner of Commercial Tax, Division - 1, Chandausi, Uttar Pradesh, by his ex-parte orders dated October 29, 2010 directed your Company to pay a sum of Rs.288.73 million towards penalty for the alleged failure to deposit trade tax amount collected under the Uttar Pradesh Trade Tax Act, 1948 from the buyers of Mentha Oil traded on the Company''s trading platform during the years 2005-06, 2006-07 and 2007-08. Aggrieved by the said ex-parte orders and various subsequent orders/ex-parte orders/show cause notices your Company contested the same and finally again the Deputy Commissioner passed an ex-parte order on September 26, 2014 levying the same penalty for the aforementioned assessment years.

However, on January 22, 2015 the Deputy Commissioner vide his order has re-opened the matter. After hearing your Company and its reply, the Deputy Commissioner passed his orders dated July 20, 2015 (received by the Company on August 20, 2015) and modified the total penalty to Rs.144.36 million in the aforesaid matters. The Company successfully challenged the said orders before the First Appellate Authority and the said Appellate Authority vide its Order dated March 30, 2016 granted a stay in favour of your Company directing to deposit 50 (fifty) percent of the disputed amount of the penalty. Your Company further appealed against the First Appellate Authority orders before the Commercial Tax Tribunal and the said Tribunal vide its order dated April 29, 2016, inter alia, directed your Company to deposit 80 (eighty) percent of the disputed penalty amount. Your Company successfully argued the main appeals and the First Appellate Authority vide order dated June 01, 2016 has set aside the aforesaid orders of the Deputy Commissioner of Commercial Tax and remanded all three matters to Deputy Commissioner of Commercial Tax.

E. Status of compounding applications

During FY15, your Company had filed nine applications seeking compounding of offence of earlier years, under Section 621A of the Companies Act, 1956, against the Show Cause Notices received from the Registrar of Companies, Mumbai, Maharashtra. As on date of this Report, compounding has been effected in respect of seven applications by Regional Director, Western Region and Company Law Board, Mumbai Bench. The Compounding Authorities, have imposed an aggregate compounding fee of Rs.7,35,600/- on the Company, as stated herein below, and the amount has since been paid. The status of Compounding Applications as at March 31, 2016 is given in the Extract of the Annual Return in Annexure XI.

Sr. Compounding Authority Offence under the Companies Compounding fee no. Act, 1956 (Section No.) (Rs.)

1 Regional Director, Western Region 193 9,600

2 Regional Director, Western Region 301 26,000

3 Company Law Board, Mumbai Bench * 220 1,00,000

4 Company Law Board, Mumbai Bench * 224(8) 1,00,000

5 Company Law Board, Mumbai Bench * 297 2,00,000

6 Company Law Board, Mumbai Bench * 372A 1,00,000

7 Company Law Board, Mumbai Bench * 372(5) 2,00,000

* Copy of order is awaited

Further, on applications for compounding by the ex-Directors and the ex-Company Secretary of the Company consequent upon the Show Cause Notices issued to them by the Registrar of Companies, Mumbai, Maharashtra, the concerned authorities, i.e., the Regional Director, Western Region and the Company Law Board, Mumbai Bench have passed compounding orders towards the same.

F. Status of Special Audit

In continuation to the detailed analysis taken up by your Company pursuant to the Special Audit conducted of your Company during the previous financial year, appropriate actions were initiated including taking legal measures and filing of recovery suits as were deemed fit. Further, in respect of summons received during FY15 under Section 131 of the Income Tax Act, 1961 in relation to donation of Rs.10 million given by the Company to a Trust during the financial year 2013-14, the Company has submitted the details sought for and proceedings are still on.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

Save as except disclosed in this Report, 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.

HUMAN RESOURCE DEVELOPMENT

Your Company believes in strategic alignment of Human Resources to its business priorities and end objectives. As at March 31, 2016, your Company employed a dedicated team of 327 employees.

Your Company has in place an anti-sexual harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An internal Complaints Committee was formed in FY15 to redress complaints received regarding sexual harassment. No complaints were received during the year 2015- 16 in relation thereto.

Your Company continues to attract, retain and nurture talented people in its endeavour to be an employer of choice. It has, from time to time, been granting employees stock options (ESOP) representing equivalent number of equity shares of Rs.10/- each of the Company, to eligible employees under the Employees Stock Options Scheme - 2008 (ESOP 2008), adopted through the Trust route.

The disclosures pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, Section 62 of the Companies Act 2013 read with Companies (Share Capital and Debenture) Rules, 2014, as at March 31, 2016 in connection with the ESOP 2008 are set out in Annexure XV to this Report.

PARTICULARS OF REMUNERATION

Your Company has adopted a well-defined Nomination & Remuneration Policy for its Directors, KMPs and other employees, which forms part of this report as Annexure XVI.

The ratio of remuneration of each Director 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, are forming part of this report as Annexure XVII.

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 as per requirement of SEC Regulations, a statement containing particulars of employees as stipulated therein also forms part of this Directors'' Report as Annexure XVIII. Pursuant to Section 136 of the Companies Act, 2013, the same is open for inspection at the registered office of your Company

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 given as under:

A. CONSERVATION OF ENERGY

Your Company, though not being energy intensive, takes various measures to reduce its 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, for the Exchange servers, has installed in-row cooling system that cools equipment based on the heat generated, and ensures that no energy is wasted in running compressors excessively to maintain the desired temperature levels. Some of the policies implemented by your Company on an ongoing basis as a part of energy conservation/saving includes:

1. Maintaining adequate capacitor bank for non-linear electrical loads like air-conditioning plant, pumps and Heat Recovery System, thereby reducing the drawing of extra energy and improving power factor.

2. Preventive maintenance of air conditioning system on scheduled basis and ensuring that the heat sensors and electronic components are properly functioning for compressors to achieve variable compression linked to heat levels for reduction in power consumption.

(ii) Steps taken by your Company for utilising alternate sources of energy:

No alternate source of energy is utilized by your Company.

(iii) Capital investment on energy conservation equipment:

During the year under review, no capital expenditure is incurred in relation thereto.

B. TECHNOLOGY ABSORPTION:

(i) The efforts made towards technology absorption:

Technology is a key enabler and core facilitator for achievement of the major goals of your Company and is identified as one of the strategic pillars. Your Company hosts all mission-critical applications and the supporting infrastructure in its state-of-art Data Center which is supported by the best-of-breed network, security and other necessary infrastructure. Your Company''s technological infrastructure is built on the next generation technology mechanism, which can cater to all market participants by virtue of being fast, secure, cost effective, transparent and regulated. Your Company continues to make substantial investments in its technology platform and systems for meeting increasing market requirements and for keeping pace with the rapid technological developments and changes.

Your Company''s technology platform continues to be stable and robust and supports increasing transaction volumes. At present, the Exchange''s system has a handling capacity of 40,000,000 transactions (Orders and Trades put together) per day, which is well above the recorded volumes witnessed by the Exchange till date. Your Company has embarked on a program to equip its Exchange Technology Platform with more processing capacity and lower latency to meet the scale and transaction volume requirements in the coming years. Your Company provides various mode of connectivity solution to market participants including NPN-POP, VSAT, VPN, leased line, and internet and based on their specific needs of performance, redundancy and information security they opt for appropriate connectivity solution.

All departments within the Company use technology to deliver superior services to the internal customers and trading and clearing members of the Exchange. With a view to support operations of the Surveillance Department effectively, your Company has setup and augmented systems for real-time analytics and data warehouse.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution;

Your Company has implemented cutting edge technologies which are best in class IT systems and practices in order to ensure that its technology platform becomes a strategic business tool for building competitive advantage.

The Company''s robust technology infrastructure has continued to provide uninterrupted trading experience and ensures no single point of failure. Through use of carefully evaluated and implemented technology solutions, your Company has been able to offer quality services at optimal costs.

(iii) In case 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) Your Company has not incurred any expenditure on Research and Development during the year under review.

C. FOREIGN EXCHANGE EARNINGS/OUTGO DURING THE YEAR UNDER REVIEW

Your Company is engaged in the business of operating a commodity derivative exchange and endeavours to export its services as and when opportunities are available. The details of foreign exchange earnings and outgo forms part of the Significant Accounting Policies and Note no. 26 and Note no. 27 of Notes forming part of standalone and consolidated financial statements respectively.

DISCLOSURE UNDER LISTING REGULATIONS

Details of disclosures in terms of requirements under Schedule V of the Listing Regulations, as are applicable to the Company, are given in the Corporate Governance Report forming part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013 with respect to the Directors'' Responsibility Statement, your Directors state that:

a. in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. the Directors 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 March 31, 2016 and of the profit of the Company for the year ended on that date;

c. the Directors 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. the Directors have prepared the annual accounts on a ''going concern'' basis;

e. the Directors 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. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The above are to be read along with the section on Auditors'' Report, given earlier in this report.

ACKNOWLEDGMENTS

Your Directors place on record their sincere gratitude to the erstwhile Forward Markets Commission, the Securities and Exchange Board of India, Ministry of Finance, Department of Economic Affairs, Government of India, Reserve Bank of India, Foreign Investment Promotion Board, Ministry of Corporate Affairs, Department of Posts, Central Depository Services (India) Limited, National Securities Depository Limited, BSE Limited, the National Stock Exchange of India Limited, Karvy Computershare Private Limited, shareholders, financial institutions, banks, trading and clearing members of the Exchange and their clients, business associates and all other stakeholders for reposing their continued faith and support . Your Directors also place on record their appreciation for the contribution made by employees at all levels.



For and on behalf of Multi Commodity Exchange of India Limited



Satyananda Mishra

Chairman of the Board



Mumbai

August 10, 2016

---

Mar 31, 2014

Dear Shareholders,

The Board of Directors is pleased to present the Twelfth Annual Report on the business and operations of your Company along with the Audited Statement of Accounts and the Auditors'' Report for the financial year (FY) ended March 31, 2014. The highlights for the year under review are given below:

Financial Results

(in Rs. million, except for the per share data)

Standalone Consolidated

2013-14 2012-13 2013-14 2012-13

Total Income 4,399.36 6,446.95 4,403.19 6,451.90

Total Operating Expenditure 1,949.34 2,087.84 1,949.43 2,087.91

Profit before interest, depreciation, exceptional items and tax 2,450.02 4,359.11 2,453.76 4,363.99

Less: Depreciation 342.99 307.47 342.99 307.47

Less: Interest 10.60 0.31 10.60 0.31

Profit before tax 2,096.43 4,051.33 2,100.17 4,056.21

Provision for tax 568.86 1,064.94 568.86 1,064.94

Profit after tax 1,527.57 2,986.39 1,531.31 2,991.27

Add: Share of profits of associate - - 0.33 0.26

Less: Share of minority interest - - (0.01) (0.01)

Add: Balance of profit of earlier years 7,500.93 6,242.27 7,514.97 6,251.18

Balance available for appropriation 9,028.50 9,228.66 9,046.60 9,242.70

Less: APPROPRIATIONS

Final dividend (Proposed) 153.00 611.98 153.00 611.98

Interim dividend (Paid) 356.99 611.98 356.99 611.98

Tax on Dividend 86.67 203.29 86.67 203.29

Transfer to General Reserve 152.76 298.64 152.76 298.64

Transfer to Settlement Guarantee Fund (SGF) 1,036.39 1.84 1,036.39 1.84

Balance carried to Balance sheet 7,242.69 7,500.93 7,260.79 7,514.97

Earnings per share (Rs.) 30.14 59.00 30.22 59.10

(Basic & diluted) 30.12 58.76 30.20 58.86

FINANCIAL PERFORMANCE, BUSINESS OPERATIONS AND OVERVIEW

During the year under review, your Company—India''s leading commodity futures exchange—proved its mettle by retaining a market share of over 80 percent in terms of the value of commodities futures traded, despite a challenging environment. Some of these challenges included the imposition of Commodity Transaction Tax (CTT) at 0.01 percent of the transactional value, applicable on sellers of non-farm futures with efect from July 01, 2013; and the contagion efect of the crisis hit National Spot Exchange Limited (NSEL).

The total turnover of commodity futures traded on your Exchange stood at Rs. 86,114.49 billion in FY 2013-14, as against Rs. 148,810.57 billion in the previous fiscal. For the year ended March 31, 2014, your Company''s total income (standalone) stood at Rs. 4,399.36 million, as compared to Rs. 6,446.95 million during the last fiscal. The operating income during the period under consideration was Rs. 3,406.67 million, as against Rs. 5,239.62 million in FY 2012-13. Other income during FY 2013-14 was Rs. 992.69 million, as against Rs. 1,207.33 million in the previous fiscal .The net profit after tax for the year ended March 31, 2014 stood at Rs. 1,527.57 million as against Rs. 2,986.39 million in FY 2012-13. The net worth as on March 31, 2014 stood at Rs. 13,160.97 million.

Your Company, a fully electronic commodity futures exchange, enjoys a competitive edge due to its domain expertise, experienced leadership team, step ahead in innovation & product mix, multiple domestic and international alliances, robust business model and scalable technology platform framework, and extensive reach with more than 2000 members, operating through over 467,000 terminals including Computer to Computer Link (CTCL) across over 1900 cities and towns across India.

The number of contracts traded on your Exchange in FY 2013-14 stood at 214 million as compared with 375 million in FY 2012-13. While the average daily turnover stood at Rs. 278 billion in FY 2013-14, as compared with Rs. 487.9 billion in FY 2012-13, it is noteworthy that, on April 15, 2013 your Exchange recorded its highest daily turnover since inception of Rs. 1,199.41 billion.

MCX silver micro futures, MCX silver mini futures, MCX copper futures, MCX gold petal futures, MCX gold mini futures were among the top 20 metal futures & options contracts and MCX crude oil futures and MCX natural gas futures were among the top 20 energy futures & options contracts in the global ranking of commodity futures contracts in CY 2013. (Source: FIA Annual Volume Survey March 2014). During April 2014, your Company was advised to discontinue the contracts in Silver (30 Kgs), Silver (5 Kgs) and Silver Micro (1 Kg) due to regulatory reasons.

During the year under review, Forward Markets Commission (FMC), regulator of your Company, vide its order dated December 17, 2013 has inter alia, held that in the public interest, and in the interest of the commodity derivatives market, which is regulated under the Forward Contracts [Regulation] Act, 1952, Financial Technologies (India) Ltd (FTIL), is not a ''ft and proper person'' to continue to be a shareholder of 2 per cent or more of the paid-up equity capital of your Company as prescribed under the guidelines issued by the Government of India for capital structure of commodity exchanges post 5 years'' of operation.

Your Company is making all eforts to implement the aforesaid order of the Commission, as well as, to be fully compliant with the revised norms regarding Shareholding, Ownership, net worth, ft and proper criteria, etc. The details relating to the same are more particularly covered in the ''Compliance with the Equity Structure Guidelines'' section.

In accordance with the directions of FMC, a Special Audit of your Company was carried out by an external agency for the period between inception of the Company and September 30, 2013, and the Final Report thereof was received on April 21, 2014. The Company, on the basis of the report, has initiated actions and is carrying out an analysis of the observations made in the report and shall initiate such actions as may be deemed necessary after such an analysis.

Subsequent to the NSEL crisis, a majority of the Board has been reconstituted. Among the key changes efected was the then MD & CEO, Mr. Shreekant Javalgekar, ceased to be MD & CEO with efect from October 22, 2013. The other details of re-constitution in the Board of your Company are covered in the ''Directors'' section of this report.

An Oversight Committee of the Board was constituted, till a new incumbent is appointed as MD & CEO, to oversee operations of the Exchange and provide directions to the Management. The Oversight Committee, inter alia, had among other observations expressed reservations on the terms of the Agreements entered into by your Company with FTIL group, especially with respect to the undue infuence exerted by them, and the need to have a re-look at the said agreements. The remedial actions, wherever warranted on the fndings of the Oversight Committee has been initiated and shall be closed to the satisfaction of the Audit Committee. The Board constituted a Negotiation Committee to discuss and negotiate with FTIL Group all the technology related as well as other agreements entered into with them. The Company is in an advanced stage of negotiations.

The Securities and Exchange Board of India (SEBI) vide its Order dated March 19, 2014 has also held that FTIL is not a ''ft and proper person'', to acquire or hold any equity shares or any instrument that provides for entitlement of equity shares or rights over equity shares at any future date in a recognised Stock Exchange or Clearing Corporation, either directly or indirectly. Pursuant to the said SEBI Order dated March 19, 2014, your Company has been directed by SEBI to divest its holding in both MCX-SX and MCX-SX CCL.

As at 31 March 2014, your Company had investments in 27,165,000 equity shares and 634,170,000 warrants of MCX Stock Exchange Limited (MCX-SX) and investments in 6,500,000 equity shares of MCX-SX Clearing Corporation Limited (MCX-SX CCL). Your Company vide its letter dated April 4, 2014 had represented to SEBI that FTIL and your Company no longer act in concert and therefore your Company should not be required to divest its holding in MCX-SX and MCX-SX CCL. However, SEBI vide its letter dated June 24, 2014 has informed your Company that it does not fnd any ground or circumstance to show that the Company and FTIL are no longer acting in concert. In view of the same, the Company once again has made a representation to SEBI highlighting various developments that have taken place since October/ November 2013 and to reconsider its decision and not insist on MCX to divest its stake in MCX-SX. On the other hand, the Company has been scouting for buyers to sell its stake in MCX-SX and MCX-SX CCL but has not been able to do so given the dismal operational performance by MCX SX and MCX SX CCL as well as their depleting net worth.

However, in view of the aforesaid directive of SEBI, these investments have been reclassified from long term investments to current investments at their carrying values.

Your Company''s view of the estimated useful life of office equipments — that were depreciated in accordance with the rates as specified in Schedule XIV of the Companies Act, 1956 — represented useful life of approximately 21 years; however, the revised estimated useful life has worked out to be ranging from 12 to180 months. This change in the estimate has been prospectively given efect to in the financial statements for the year ended March 31, 2014. Accordingly, the revised unamortised value as at January 01, 2014 is being amortised over the revised remaining useful life, and this change increased the depreciation charge for the year by Rs. 45.91 million.

During the year, the Company received a letter from the Ministry of Corporate Afairs ("MCA") seeking explanation/ clarifcation under section 234(1) of Companies Act 1956 ("Companies Act") and regarding a notice for inspection under section 209A of the Companies Act. The Company has submitted the requested information to MCA. An inspection was thereafter conducted by Registrar of Companies (RoC) and Regional Director (RD), and after interim inspection, RoC issued show cause notices to the Company alleging contravention to certain provisions of the Companies Act. Your Company has replied to the said show cause notices and has fled and is in the process of fling requisite compounding applications under Section 621A of the Companies Act seeking compounding of ofence under the relevant Sections of the Companies Act for which the Notices have been received by the Company.

AMENDMENT TO MEMORANDUM OF ASSOCIATION (MOA) AND ARTICLES OF ASSOCIATION (AOA)

Your Company sought approval of its shareholders vide postal ballot Notice dated November 27, 2013 wherein the Members passed the resolution relating to deleting the clause of ''Non-retiring Directors'' in Article 30 of the Articles of Association of the Company with requisite majority, while the resolution relating to amendment to the MoA could not be passed with the requisite majority. The results of the said postal ballot were declared on January 24, 2014.

Subsequently, your Company by Postal Ballot notice dated May 09, 2014 sought approval of its shareholders for deleting the words ''securities'' and ''ready'' and incorporating the words ''including related eco-systems'' after the words ''all support services relating thereto'' in the main objects in clause III (A) (1) of the MoA; and inserting new articles viz. Article 26A, Article 26B and Article 26C, immediately after existing Article 26 in the AoA of the Company.

The said inserted Articles, inter alia, provide that, if a shareholder is declared not ''ft and proper'' and if he fails or neglects to divest his shares forthwith or within such time as may be prescribed by the Company, the said shareholder shall deemed to have irrevocably constituted, nominated and appointed the Board of Directors of the Company as his agents, who shall cause to transfer such shares immediately to an escrow account which would be opened and operated by the Board. It also provides that the Board shall act either by itself and/or through a registered intermediary, as an agent, to deal with and dispose of such shares in such manner as the Board may consider ft, and all the monies realised from such sale of shares held in escrow, shall be paid to the said shareholder, subject to the lien (if any) on such shares and after deducting the expenses incurred by the Company for disposing of the said shares.

The Members passed both the resolutions relating to alteration of MoA and AoA with requisite majority. The results of the aforesaid postal ballots were declared on June 18, 2014.

Your Company has received the approval of FMC and the same has been in efect from the date of publication in the Ofcial Gazette of India.

COMPLIANCE WITH THE EQUITY STRUCTURE GUIDELINES

Your Company has been in compliance with the applicable ''Guidelines on the Equity Structure of the Nationwide Multi Commodity Exchanges after 5 years of operation'' dated July 29, 2009, as amended from time to time issued by Department of Consumer Afairs, Ministry of Consumer Afairs, Food and Distribution, Government of India.

FMC on May 06, 2014 issued revised norms regarding shareholding, ownership, net worth, ft and proper criteria, etc., which, inter-alia, prescribes that in the event any person ceases to be a ''ft and proper person'' or is declared so by FMC, such person shall forthwith divest its shareholding and pending such divestment of shares, the voting rights of such person stands extinguished and any corporate benefit in lieu of such holding are to be kept in abeyance/withheld by Exchange.

In view of the FMC order dated December 17, 2013 and the revised norms dated May 06, 2014 regarding shareholding, etc. issued by FMC, your Company vide letter dated May 12, 2014 intimated FTIL that its voting rights stand extinguished and any corporate benefit in lieu of such holding shall be kept in abeyance/withheld. As mentioned earlier, to implement FMC''s order, your Company sought shareholders'' approval through postal ballot and passed the requisite resolution on June 18, 2014 for amending its AoA and to comply with the new Guidelines. On receipt of the approval as elaborated above the Company shall initiate such actions as may be required for ensuring due compliance.

FMC vide its letter dated May 8, 2014, inter alia, observed that your Company had not taken tangible and concrete measures to implement FMC''s order dated December 17, 2013, and fndings of the Special Audit and the Oversight Committee of the Board of Directors. The Commission decided that till such time these directives are implemented by your Company, no new contracts will be approved for trading and the contract launch calendar for 2015 will be kept in abeyance. However, the approved contracts as per the contract launch calendar for 2014 shall be available for trading. The ability of your Company to continue beyond calendar year 2014 is predicated on its compliance with the aforesaid FMC order dated December 17, 2013. Your Company is sparing no efort to comply with the order/directives of the Commission and is confdent of being fully compliant with the said FMC order shortly.

In another development, FTIL''s shareholding in MCX is expected, to come down to 5 per cent, with FTIL selling 6 per cent of its shareholding through stock exchange mechanism including bulk deals and entering into a Share Purchase Agreement with Kotak Mahindra Bank Limited on July 20, 2014 for selling 15 per cent of its stake in MCX. Your Company is regularly following up with FTIL to take efective steps to divest its entire shareholding in the Company.

INVESTOR (CLIENT) PROTECTION FUND (IPF)

Your Company has established an Investor (Client) Protection Fund Trust to protect and safeguard the interests of investors (clients), in respect of eligible/legitimate claims arising out of default by any Member of the Exchange and to impart investors (clients) education, awareness, research or such other programmes as may be seceded by FMC and/or your Company from time to time out of the interest earned on investments of the Fund. As on March 31, 2014, the IPF corpus stood at Rs. 430.42 million.

SETTLEMNT GUARANTEE FUND

In accordance with clarifcations/directives issued by FMC, the Exchange transferred the following to the Settlement Guarantee Fund (SGF) during the year:

a) A sum of Rs. 1,036.39 million (net of tax) from the surplus in profits for the years FY2007-08 to FY2012-13,

b) Settlement related penalties and fnes w.e.f. September 2013, amounting to Rs. 6.43 million (net of tax),

c) Base Minimum Capital of Rs. 624.55 million and

d) Income earned from earmarked SGF investments Rs. 31.59 million (net of tax).

Pursuant to the FMC circular dated August 23, 2013, your Company transferred Rs. 1,036.39 million to SGF from the Surplus in the Statement of profit and Loss, being the amount pertaining to earlier periods. During the nine-month period ended December 31, 2013 an amount of Rs. 171.47 million was charged to profits and transferred to the SGF. The aforesaid FMC circular was partially modifed on March 14, 2014, which interalia required a stress test to be performed to determine the adequacy of the balance in SGF at the end of the year. The balance in SGF at year end being adequate, your Company released Rs. 171.47 million in March 31, 2014.

TRANSFER TO RESERVES

Your Directors propose to transfer Rs. 152.76 million to the General Reserve and Rs. 1,036.39 million to SGF Reserve. An amount of Rs. 7,242.69 million is also proposed to be retained in the profit & Loss account.

DIVIDEND

After considering your Company''s profitability, your Directors declared and paid an interim dividend of Rs. 7 per equity share on a face value of Rs. 10 per share for FY 2013-14, which totalled to Rs. 356.99 million.

Your Directors have further recommended a final dividend of Rs. 3 per equity share on a face value of Rs. 10 per share, totalling to Rs. 153.00 million, subject to the approval of Shareholders at the ensuing Annual General Meeting. The total dividend, including interim and final (if approved), aggregate to Rs. 10 per share, amounting to Rs. 509.99 million for the financial year ended March 31, 2014.

The total appropriation on account of interim and final dividend (if approved) and corporate tax on dividend thereon would be Rs. 596.66 million. The dividend will be tax-free in the hands of shareholders.

SHARE CAPITAL

There was no change in the share capital of the Company during the year under review.

As on March 31, 2014, the paid up share capital of your Company stood at Rs. 509.99 million comprising 50,998,369 equity shares of Rs. 10 each fully paid.

DEPOSITS

Your Company had not invited any deposits from the public, and as such, no amount of principal or interest related thereto was outstanding on the date of the Balance Sheet as on March 31, 2014.

BUY BACK OF EQUITY SHARES

During the period under review, your Company did not announce any scheme for buying back equity shares from its Shareholders. Accordingly, the requirements as specified under Section 77A of the Companies Act, 1956 do not apply.

SUBSIDIARIES

The Consolidated financial statements presented by the Company include financial information of its subsidiaries, namely Multi Commodity Exchange Clearing Corporation Limited (MCXCCL) and SME Exchange of India Limited (SME).

MCXCCL, a wholly-owned subsidiary of the Company, was set up for the purpose of having a separate clearing house to provide services such as clearing and settlement of trades and guaranteeing counterparty risk. As on date, MCXCCL has not commenced operations, pending the amendment of Forward Contracts Regulation Act, 1952; and its present paid-up capital is Rs. 60 million.

SME, subsidiary (51%) of the Company, promoted jointly with Financial Technologies (India) Limited (49%), till date has not commenced its operations. SME''s paid-up capital is Rs. 1 million. SME has not commenced operations and there being no possibility of commencing the same in the foreseeable future, your Directors have recommended voluntary winding up of SME.

In terms of the general circular no. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Afairs in respect of section 212 of the Companies Act, 1956, the Board has accorded its consent for not attaching the balance sheet of your Company''s subsidiaries with the accounts of your Company at its meeting held on August 18, 2014. Pursuant to the Circular, the gist of financial details of the subsidiaries is included elsewhere in the Annual Report. The Consolidated financial statements prepared in accordance with Accounting Standard 21-Consolidated Financial Statements issued by Institute of Chartered Accountants of India and the Listing Agreement as prescribed by SEBI forms a part of this Annual Report, and are refected in the consolidated accounts of the Company. Annual accounts of subsidiaries and the related information shall be made available to members of the Company and those of its subsidiaries on request. Annual accounts of the subsidiary companies would also be kept at the registered office of the Company for inspection by any shareholder.

CONSOLIDATED FINANCIAL STATEMENTS

The audited Consolidated Financial Statements, based on the financial statements received from subsidiaries and associates, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard - 21 (AS-21) - "Consolidated Financial Statements" and Accounting Standard - 23 (AS-23) - "Accounting for Investments in Associates," in Consolidated Financial Statements as notifed under the Companies (Accounting Standard) Rules, 2006. The details of which are more particularly covered in the Notes to Accounts.

OUTLOOK

MCX ofers trading in futures of commodity segments including bullion, ferrous and non-ferrous metals, energy and agriculture. However, the Commodity Transaction Tax (CTT), implemented on non-agricultural futures trade with efect from July 01, 2013, has had an adverse impact on volumes of the exchange. The CTT imposed at 0.01%, increased the average cost of transaction by almost 300 per cent, and acted as a major disincentive for carrying out transactions. By increasing the cost of "hedging" transactions and impairing the hedging efciency of the market participants, the CTT led to a decline in the average daily volume and consequently the transaction revenue and profitability of your Company.

Certain state governments have increased stamp duties on commodity transactions, which have resulted in challenges. The West Bengal (which contributed 23 per cent of MCX''s volume in FY2013-14) government notifed a stamp duty of Rs. 1000 per crore of transactions by clients. This amount is significant to the extent of being twice the CTT and is about five times the maximum transaction fee charged by the Exchange (Rs. 210 per crore is the maximum fees charged for non-agricultural commodities).

Again, on July 30, 2014, the Rajasthan (which contributed 6.3 per cent of MCX''s volume in FY2013-14) government notifed an increase in stamp duty across commodities. The hike in stamp duty on non-agricultural commodities (Rs. 100 per crore) made the cost for trading twice as compared to agricultural commodities (Rs. 50 per crore). The increase in trading costs due to taxes, duties and other levies is likely to impact the Exchange''s performance.

In order to mitigate the impact of the tax and cater to demands of a large number of stakeholders, your Company initiated a number of steps during the year. Transaction charges on agricultural products were slashed to 75 paise per lakh for a turnover up to Rs. 20 crore and 50 paise per lakh for turnover above this quantum. Transaction charges on non-agricultural products were also reduced. Your Company expanded the list of acceptable sources for "Good Delivery in Gold", approving serially numbered gold bars (for Gold kg contracts and Gold mini contracts) supplied by "MMTC- PAMP" along with the supplier''s quality certifcate as good delivery. In the case of silver, your Company approved serially numbered silver bars of Grade 999 and Fineness 999 supplied by "MMTC-PAMP" along with the supplier''s quality certifcate as good delivery from October 09, 2013. Moreover, in its eforts focused on developing the silver futures market, MCX continued to exempt vaulting/storage charges for silver 1 kg bar stored in designated vaults at Exchange-specified delivery centres till March 31, 2014. Continuing its eforts to support trader''s participation on the MCX platform, your Company extended the spread benefit to diferent variants of copper (copper, copper mini) futures contracts. Similarly, MCX discontinued the annual charges of Rs. 20,000 per Algorithmic Trading Facility (ATF) per user ID with efect from April 01, 2013.

There has lately been a significant improvement in gold delivery, which reached a low in the month of February 2014 Gold 1Kg contract. The Exchange witnessed its highest delivery of 1100 kg in the MCX Gold 1Kg August 2014 contract, over the last one year. The significant increase in gold delivery in the benchmark contract is a clear indication of reinstatement of faith in the Exchange. The last time gold delivery in the contract crossed the 1000 kg-mark was in April 2013, much prior to the imposition of Commodity Transaction Tax and other events that led to turmoil in the commodity markets.

With a new government that has a clear mandate in place, it is being hoped that the long-pending Bill to amend the Forward Contracts (Regulation) Act, 1952 or FCRA will soon be placed and approved by the parliament. The earlier version of FCRA Amendment Bill, which was cleared by the relevant Department-Related Parliamentary Standing Committee, had noted, inter alia, that FMC should be made autonomous, and indices, intangible products and options should be allowed in India''s commodity derivatives market. The Committee also recommended that banks, insurance companies and mutual funds, etc. should be allowed to participate on commodity derivative exchanges. We hope these provisions are retained in the revised bill. Your Company has been making representations on the importance of this policy change and the urgency associated with it, and has been urging an early passage of the Bill in the parliament, at various forums.

While the notifcation on the Companies (Corporate Social Responsibility Policy) Rules, 2014, was issued by the Ministry of Corporate Afairs, on February 27, 2014, and came in to force on April 01, 2014, your Company has been focused on creating social value through its CSR activities. Your Company intends to achieve its CSR objectives by integrating its business processes with social processes, and developing innovative business models which create shared value.

To improve disclosure and instill confdence in market participants, the regulator and other stakeholders, since August 2013, your Company has started publishing quarterly statements detailing components of the Settlement Guarantee Fund (SGF) as per FMC Guidelines.

During the year, FMC took several regulatory initiatives to ensure integrity in the Indian commodity futures market while promoting its inclusive growth. While re-permitting algorithmic trading in gold mini contracts with efect from July 25, 2013, FMC empowered exchanges to allow algorithmic trading in other mini contracts based on criterion set by the regulator. It also issued revised guidelines for regulating algorithmic trading in the commodities futures market.

During the year, FMC also undertook various initiatives to improve market transparency and accessibility and to protect the interests of the clients. Some such initiatives are listed below:

For strengthening of warehousing facility, exchange-accredited warehouses were directed to compulsorily register with Warehousing Development and Regulatory Authority (WDRA);

Exchange members were asked to continue to refrain from ofering portfolio management services (PMS);

Exchanges were asked to keep trading platforms closed on Saturdays for all futures contracts;

The Risk Management Group of FMC was reconstituted and an Advisory Committee was constituted to look into issues arising out of technology-enabled trading facilities by exchanges;

Exchanges were issued directives on their contribution to the Settlement Guarantee Funds;

For reducing the cost of hedging, the market participants were exempted from paying margins (except mark-to- market) if they deposited certified goods to the exchange accredited warehouses;

Evening trade was permitted in ten internationally linked agricultural commodities;

Exchanges were issued directions on dealings in cash transactions and levying of diferential transaction charges;

A working group on common clearing for commodity exchanges was set up;

Fresh guidelines were issued on constitution of the board of directors and role of independent directors and appointment of chief executives at the nationwide multi-commodity exchanges;

Exchanges were directed to implement FSLRC''s recommendations on consumer protection;

Details of common /uniform client registration form/ process was spelt out;

Exchanges were issued instructions on disclosure of Investor (Client) Protection Fund Trust (IPFT) in the their financial statements;

Registration of each and every client for SMS and e-mail alerts was made mandatory;

Members were required to settle client accounts at least on a quarterly basis;

New guidelines were issued to enable commodity exchanges and their members use the Central KYC Registry.

During the year, your Company had knowledge-sharing opportunities with two foreign entities. On November 20, 2013,

MCX signed a Memorandum of Understanding with the China-based Dalian Commodity Exchange to facilitate potential collaboration in knowledge-sharing and research between the two large Asian exchanges. On March 31, 2014, a high level government delegation from Mongolia—the central Asian mineral-rich country—visited MCX to understand the various operational and self-regulatory aspects linked to operating a commodity exchange in their country.

COMMITMENT TO QUALITY

With a quest to achieve excellence in products and services ofered, your Company continues to monitor and maintain its efective and well-crafted Quality Management Framework. This Quality Framework is aligned to the business objectives of the Exchange, and ensures that your Company is focused on maintaining Customer and quality centric approach. Your Company is focused on continually improving its existing robust processes and quality services. Over the years, your Company has evolved mature processes, which assist in commendably reducing unpredictability across various business operations. Your company successfully cleared the iso 9001:2008 Surveillance Audit, after rigorous process audits across all its key operations. This showcases the Company''s dedication and commitment towards sustaining a robust Quality Management System.

In line with your Company''s commitment of ensuring Information Security and providing assurance to its stakeholders, your Company has a proactive Information Risk Management approach, and carries out risk assessment activities on a periodic basis. This year too, your company underwent stringent information security related audits, for its Information Security Management System, and retained its iso/ieC 27001:2005 certifcate.

ENVIRONMENTAL RESPONSIBILITY

Given the nature of its operations, MCX has a very low impact on the environment. However, MCX is committed to minimising its environmental impacts through efcient use of natural resources, including electricity, which is the key touch point of the Exchange''s technology-driven business. Your Company has an efective Environmental Policy and is governed by it. Your Company believes that to meet the objectives of the Environmental Policy, employee commitment is imperative. Thus, the Company through its CSR team creates awareness among employees and encourages them to adopt conservation practices. Your Company cleared the iso 14001:2004 re-certification audit, and continues to monitor its Environment Management Plan, which is developed on the basis of the Environment Review conducted annually to assess the impact of the Company''s activities. Your Company has also developed an e-waste policy for the safe disposal of e-waste from its premises. Its tie-up with authorised e-waste recyclers such as Eco Recycling Limited helps it dispose its e-waste in an eco-friendly manner. The e-waste disposal is in turn minimised through best practices in maintenance and re-use.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The details on the Corporate Social Responsibility (CSR) have been covered elsewhere in this Annual Report.

CORPORATE GOVERNANCE

Your Company continues to be committed to good corporate governance aligned with the best corporate practices. The report on Corporate Governance-stipulated by Clause 49 of the Listing Agreement-and certifcate from a Practicing Company Secretary regarding compliance with Corporate Governance norms, forms a part of this Annual Report.

MANAGEMENT''S DISCUSSION AND ANALYSIS STATEMENT

Management''s Discussion and Analysis Statement, as stipulated under the Listing Agreement, forms a part of this Annual Report.

DIRECTORS

Your Company being a commodity futures exchange is, inter alia, regulated by FMC. FMC has issued guidelines on the Constitution of the Board of Directors, Nomination and Role of Independent Directors and appointment of Chief Executives at the Nationwide Multi Commodity Exchanges, which were revised on May 17, 2013, August 12, 2013, September 13, 2013 and June 11, 2014. As mandated in the said guidelines, the appointment of all the directors on the Board of your Company is with the approval of FMC.

Pursuant to Section 149 (6) of the Companies Act, 2013 and the Listing Agreement, the Company has received independent directors'' declarations confirming that the respective independent director meets the criteria of independence. Further the Company has also obtained afirmation of adherence to Schedule IV of the Companies Act, 2013 and the Code of Conduct of the Company in accordance with the Listing Agreement from all the Directors as applicable.

Mrs. Usha Suresh, Independent Director, ceased to be a Director of the Company w.e.f. April 1, 2013. Mr. Dinesh Kumar Mehrotra was nominated by FMC as an Independent Director w.e.f. 03rd July, 2013 for a period upto March 31, 2016.

Mr. P. R. Barpande, Director appointed in casual vacancy, ceased to be a director w.e.f. August 30, 2013. Consequent to the directions of FMC vide letter dated August 29, 2013, Mr. Venkat Chary, Mr. C. M. Maniar and Mr. Shvetal Vakil, Independent Directors, ceased to be directors of the Company w.e.f. September 01, 2013. Mr. Lambertus Rutten, Non- Executive Director ceased to be a Director w.e.f. September 01, 2013. Mr. Prakash Apte, Independent Director, ceased to be a director with the concurrence of FMC w.e.f. September 01, 2013.

FMC vide letter dated August 28, 2013 appointed Mr. Santosh Kumar Mohanty, Director in FMC, as an Independent Director to represent the Central Government who shall hold office till August 31, 2014.

Mr. Joseph Massey ceased to be a director w.e.f. the conclusion of the AGM held on September 30, 2013.

Further, pursuant to the revision in FMC''s guidelines dated August 12, 2013, read with FMC''s letter dated September 13, 2013, mandating the appointment of shareholder directors with the approval of FMC, the following directors were appointed (including withdrawal/change thereof):

1. Mr. P. Paramasivam was appointed as a Shareholder Director to represent Corporation Bank w.e.f. October 22, 2013.

2. Mr. K. N. Reghunathan was appointed as a Shareholder Director to represent Union Bank of India w.e.f. October 22, 2013.

3. Mr. Rajiv S. Abhayankar was appointed on January 2, 2014 in place of Mr. Sanjaya Agarwal who was appointed on October 25, 2013, as Shareholder Director to represent Bank of Baroda.

4. Mr. M.A.K. Prabhu was appointed as a Shareholder Director to represent Canara Bank w.e.f. November 9, 2013.

5. Mr. B.V. Chaubal was appointed as a Shareholder Director to represent the shareholding of State Bank of India Group w.e.f. November 9, 2013.

6. FMC conveyed approval for continuation of Mr. P. Satish as a Shareholder Director to represent NABARD.

Mr. Shreekant Javalgekar ceased to be a Director and MD & CEO w.e.f. October 22, 2013.

The term of the Independent Director, Mr. G. Anantharaman, appointed on October 17, 2013, initially upto June 20, 2014, was extended by FMC till March 31, 2016. Mr. Pravir Vohra Independent Director appointed on October 17, 2013 for a term upto March 31, 2016, ceased to be a director w.e.f. June 26, 2014.

Mr. Jignesh Shah resigned w.e.f. October 31, 2013 as the Non-Executive Vice Chairman of the Company. Also, with the approval of shareholders through Postal Ballot and FMC, the clause pertaining to the permanent directorship (Non- Retiring Director) of Mr. Jignesh Shah in the Articles of Association of the Company has been deleted.

Mr. Satyananda Mishra has been appointed as an Independent Director with the approval of FMC on November 19, 2013 for a period upto March 31, 2016. FMC further approved the appointment of Mr. Mishra as the Chairman of the Board with efect from 27th November, 2013..

Mr. R. M. Premkumar, Independent Director and the then Chairman of the Board resigned w.e.f. December 12, 2013.

Consequent to the resignation of Mr. Paras Ajmera w.e.f. November 12, 2013 as Shareholder Director representing Financial Technologies (India) Limited (FTIL), Mr. Miten Mehta was appointed as a nominee of FTIL vide its letter dated November 26, 2013, and in accordance with FMC letter dated December 06, 2013. However, FMC vide its letter dated December 26, 2013 held that in view of its order dated December 17, 2013 wherein FTIL was held as not ''ft and proper person'', FTIL was not eligible for representation on the Board of the Company, and accordingly withdrew its approval granted earlier vide letter dated December 06, 2013.

Mr. S. N. Ananthasubramanian was nominated as an Independent Director by FMC w.e.f December 19, 2013 for a period upto March 31, 2016. However, he tendered his resignation letter dated 28th July, 2014 and FMC has accepted his resignation vide its letter dated August 01, 2014.

Pursuant to the process for appointment of MD prescribed by FMC, the Selection Committee recommended and the Board approved the appointment of Dr. Manoj Vaish for the post of MD & CEO, and was appointed as an additional Director w.e.f. January 02, 2014. Consequent to FMC''s approval he was appointed as MD & CEO for a period of three years w.e.f. February 01, 2014, subject to approval of shareholders. Dr. Vaish''s appointment and remuneration and variation thereof is being placed for approval of shareholders in the ensuing Annual General Meeting. However, Dr. Vaish resigned as the MD & CEO vide letter dated April 30, 2014. His resignation was accepted by the Board at its meeting held on May 09, 2014, and May 10, 2014, was his last day in office as the MD & CEO.

On resignation of Dr. Vaish, the Board again constituted an Oversight Committee consisting of Independent Directors to oversee the operations of your Company.

Further, pursuant to the Guidelines prescribed by FMC and in compliance thereof, Mr. Parveen Kumar Singhal, Executive Vice President of the Company, being the senior most executive of the Exchange, was appointed as the person responsible to take care of the day-to-day afairs of the Exchange under the direction and control of the Oversight Committee, until a new incumbent is appointed as the Managing Director/Chief Executive of the Company. The Company is in the process of appointing a new incumbent as the Managing Director /Chief Executive officer in accordance with FMC guidelines for Constitution of the Board dated June 11, 2014 and the provisions of the Companies Act, 2013. Ad interim, the resignation of the MD & CEO, and resumption of duty by Mr. Singhal, who was on leave, the Board constituted a Management Committee comprising of certain senior employees to look after the day-to-day afairs of the Exchange. The said Committee was disbanded efective May 23, 2014 on Mr. Parveen Kumar Singhal resuming his duties.

Consequent to Bank of Baroda (BoB) and Corporation Bank divesting their entire stake in the Company and the withdrawal and relinquishment of its right to nominate a representative on the Board of the Company, Mr. Rajiv Abhyankar, Shareholder Director representing BoB and Mr. P. Paramasivam, Shareholder Director representing Corporation Bank ceased to be Directors w.e.f. June 26, 2014 and August 11, 2014 respectively.

The Company received intimation from NABARD on July 04, 2014 towards withdrawal of nomination of Mr. P. Satish, and on NABARD''s recommendation, the Board has co-opted Mr. R. Amalorpavanathan as an Additional Director on August 18, 2014 to represent interest of NABARD subject to approval of the shareholders and FMC.

Ms. Pravin Tripathi was nominated as an Independent Director by FMC w.e.f. August 12, 2014 for a period up to March 31, 2017.

Pursuant to Section 10 (3) of the Forward Contracts (Regulation) Act, 1952, Guidelines for Constitution of the Board dated June 11, 2014 issued by FMC, Section 149(4) and other applicable provisions of the Companies Act, 2013 read with the clarifcation issued by FMC vide its letter dated August 11, 2014, Mr. Dinesh Kumar Mehrotra, Mr. Santosh Kumar Mohanty, Mr. Ravi Kamal Bhargava and Ms. Pravin Tripathi, being Independent Directors nominated by FMC are not being proposed for approval of shareholders in the ensuing AGM.

Pursuant to Section 160 of the Companies Act, 2013, notices have been received from Mr. Satynanada Mishra and Mr. G. Anantharaman, Independent Directors of the Company signifying their respective candidature for appointment, subject to such term as may be approved by FMC, as Independent Director on the Board of the Company along with the requisite deposit.

Notice has also been received from Canara Bank, shareholder of the Company signifying candidature of Mr. M. A. K. Prabhu to be appointed as Shareholder Director on the Board of the Company to represent its interest along with the requisite deposit under Section 160 of the Companies Act, 2013 and subject to approval of FMC.

The Board, at its meeting held on August 18, 2014, considered and recommended the appointment of Mr. P. K. Singhal as Joint Managing Director (JMD) of the Company for a period of three years on such remuneration as stated in the notice of the ensuing AGM of the Company, subject to approval of shareholders, FMC and other statutory approvals as may be required.

Accordingly, pursuant to Section 152 of the Companies Act, 2013, the appointment of the aforesaid Directors are being proposed for approval of shareholders to hold office as per the tenure mentioned in the Notice of the ensuing AGM of the Company.

During FY 2013-14, 13 Board meetings were held, details of which are available in the Corporate Governance report annexed to this Report.

AUDITORS

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (Regn. No. 117366W), submitted their resignation as Statutory Auditors of the Company in June 2014. To fll the casual vacancy, the Board at its meeting held on June 26, 2014 approved the appointment of M/s. Shah Gupta & Co., Chartered Accountants (Firm Regn. No.109574W) as Statutory Auditors, subject to the approval of shareholders at the ensuing Annual General Meeting. M/s. Shah Gupta & Co. has confirmed their eligibility and willingness to act as Statutory Auditors, if appointed, and the necessary certifcate pursuant to Section 139(1) of the Companies Act, 2013 and rules made thereunder has been received from them. Pursuant to Section 139(8) of the Companies Act, 2013, M/s. Shah Gupta & Co. shall hold office till the conclusion of the next annual general meeting to be held in 2015.

In terms of the provisions of the Companies Act, 2013, (Act) any appointment of the Statutory Auditors in the casual vacancy arising as a result of resignation of an auditor, has to be approved by the Company at a general meeting within 3 months from the date of recommendation of the Board of Directors of the Company and the said office shall be held till the conclusion of the next Annual General Meeting. Considering the coinciding of the General Meeting and the Annual General Meeting, the Board of Directors proposes/recommends the appointment of M/s. Shah Gupta & Co., Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of this Meeting until the conclusion of next Annual General Meeting to be held in calendar year 2015, subject to the approval of the members

Further, in order to comply with FMC directive that none of the past audit firms be considered for re-appointment, the Company appointed M/s M. P. Chitale & Co., Chartered Accountants as the Internal Auditors for the Financial Year 2014-15.

AUDITORS'' REPORT

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai(Regn. No. 117366W), have audited the accounts of your Company for FY 2013-14. The Auditors in their Report to the Members expressed qualified opinions on the financial statements. These opinions and the Management response to the same are as given below:

1. As stated in Note 35 to the financial statements, in accordance with the directions of the Forward Markets Commission (FMC), a special audit of the Company was carried out by an external agency for the period since inception of the Company to 30th September, 2013. Pending the completion of the detailed analysis of the Special Audit Report by the Management of the Company, ongoing internal enquiry and agreements/conclusions by the Negotiations Committee, the financial implications, if any, in this regard cannot at present be ascertained and, accordingly, no adjustments have been made by the Management of the Company in the financial statements.

In view of the above pending analysis and ongoing enquiries, the outcome of which is not known and is uncertain at this stage, we are not in a position to comment on the consequential impact, if any, on the financial statements.

Management response:

In accordance with the directions of the Forward Markets Commission (FMC), a Special Audit of the Company was carried out for the period since inception of the Company to 30 September, 2013. The terms of reference, inter alia, included identifcation of related parties (as Defined by FMC in the terms of reference and a working defnition arrived at for the purpose of the review), review of non-trading transactions between the Company and significant related parties, and review of transactions of expenses incurred (individually) above Rs. 25 Lakhs. As per the Report, the working defnition of related parties is not as may be Defined under any provisions of any prevailing laws or guidance from any professional bodies in India.

The Final Report of the Special Audit was received on 21 April 2014 and was placed before the Board of the Company on 26 April 2014. The Management of the Company is making a detailed analysis of the observations in the Report, and after ascertaining the facts in each case is in the process of taking legal and other action, as appropriate. The Board of Directors has constituted a Negotiation Committee to discuss the contracts with entities related to the erstwhile promoter group, in particular, Financial Technologies (India) Limited. Pending the completion of the detailed analysis of the Report, ongoing internal enquiry and agreements/conclusions by the Negotiation Committee, the financial implications, if any, for earlier years in this regard cannot at present be ascertained and, accordingly, no adjustments have been made in the financial statements.

The Company has currently identified amounts aggregating Rs. 119.70 million incurred during FY 2013-14 where corresponding services may not have been received. Accordingly, such expenses have been reversed and a provision for doubtful recoverable has been made in the books for an equivalent amount. While this does not have any impact on the net profit before tax for the year, the corresponding efect on provision for tax has been accounted for, resulting in a lower profit after tax for the year by Rs. 39.90 million.

2. As stated in Note 37 to the financial statements, in view of the directives from the Securities and Exchange Board of India, long term investments in warrants of MCX Stock Exchange Limited and equity shares of MCX-SX Clearing Corporation Limited, have been reclassified from non-current investments to current investments. The Management of the Company is of the view that the aggregate carrying amount of current investments in these companies of Rs. 1,375.71 million, which is equivalent to the cost of their acquisition, represents the fair value of these investments as on the balance sheet date.

In the absence of sufcient appropriate audit evidence to determine a fair valuation of the aforesaid investments at balance sheet date, we have not been able to validate whether the carrying amounts of these investments is the lower of cost and fair value as required by Accounting Standard 13 on Accounting for Investments.

Management response:

As at 31 March 2014, the Company has investments in 27,165,000 equity shares and 634,170,000 warrants of MCX Stock Exchange Limited (MCX-SX) and investments in 6,500,000 equity shares of MCX-SX Clearing Corporation Limited (MCX-SX CCL). Pursuant to the SEBI Order dated 19 March, 2014, the Company has been directed by SEBI to divest its holding in both MCX-SX and MCX-SX CCL. The Company vide its letter dated April 4, 2014 has represented to SEBI that FTIL and the Company no longer act in concert and therefore the Company should not be required to divest its holding in MCX-SX and MCX-SX CCL. However, in view of the aforesaid directive of SEBI, these investments have been reclassified from long term investments to current investments at their carrying values. In accordance with Accounting Standard 13 on Investments and the Company''s accounting policy, current investments are to be carried at the lower of cost and fair value in the balance sheet. Based on the latest available audited financial statements of these companies, the Management of the Company is of the view that the aggregate carrying value of Rs. 1,375.71million, which is equivalent to the cost of their acquisition represents the fair value of these investments as on the balance sheet date.

Besides the above Qualifications, the Auditors in their Report as an "Emphasis of Matter" have drawn attention to Note 36(iv) of the financial statements regarding the ability of the Company to continue as a going concern beyond calendar year 2014, which is predicated on Company''s compliance with the FMC Order dated 17 December, 2013 with respect to divestment of the shares held by Financial Technologies (India) Limited and the fndings of the Special Audit and Oversight Committee of the Board of Directors.

Management response:

The FMC vide its letter dated May 8, 2014 observed inter alia, that the Exchange (i.e. the Company) had not taken tangible and concrete measures to implement the directives of the FMC regarding their December 17, 2013 Order with respect to divestment of shareholding by FTIL in the Company and the fndings of the Special Audit and Oversight Committee of the Board of Directors. The Commission decided that till such time the directives are implemented, no new contracts will be approved for trading as well as the contract launch calendar for 2015 will be kept in abeyance. However, the approved contracts as per the contract launch calendar for 2014 shall be available for trading.

The ability of the Company to continue as a going concern beyond calendar year 2014 is therefore predicated on its compliance with the aforesaid FMC Order dated 17 December, 2013. The Company is taking steps for implementing the FMC directives and is confdent of being fully compliant before the end of the calendar year.

Further, M/s. Shah Gupta & Co., Chartered Accountants have also subjected the Limited Review Report for the quarter ended June 30, 2014 similarly.

PARTICULARS UNDER SECTION 9(2) OF THE FORWARD CONTRACTS (REGULATION) ACT, 1952 READ WITH RULE 12 OF THE FORWARD CONTRACTS (REGULATION) RULES, 1954

In terms of the provisions of Section 9(2) of the Forward Contracts (Regulation) Act, 1952 read with Rule 12 of the Forward Contracts (Regulation) Rules, 1954, Commodity Exchanges are required to include certain particulars in their Annual Reports. These particulars for your Company are presented as Annexure I to Annexure VIII to the Directors'' Report.

HUMAN RESOURCE DEVELOPMENT

Your Company believes that an organisation''s most invaluable resource is its employees. As at March 31, 2014, your Company employed 277 permanent employees (excluding trainees, consultants and contract staf).

The Company''s focus has been on developing the core competencies of employees, and establishing a strong bond among them by providing a stimulating environment that enables sharing of knowledge, information, experience and resources, across all levels. Your Company believes that employee motivation and engagement are the key aspects of Human Resource Management. Every year, your Company assesses performance of employees based on well-Defined Key Result Areas (KRAs) to ascertain that employees are gainfully engaged and focused on Company''s core objectives. Their training and development needs are identified to further hone their understanding and skills.

The Company endorses a work environment which is fair, equitable and comfortable for its workforce. Your Company provides safe, secured and healthy work environment to all employees by conducting fre and safety drills, and ensuring the right level of indoor noise and air quality. In cognisance of the fact that employee satisfaction drives commitment, and commitment drives business performance, your Company has tried to create a cordial workplace atmosphere. Your Company continues to attract, retain and nurture talented people in its endeavour to be an employer of choice. Your Company also believes in treating employees with dignity and has put in place an Anti-Sexual Harassment policy.

During the year under review, the Compensation Committee of the Board at their meetings held on April 19, 2013 and February 19, 2014 considered and approved the grant of 25,300 and 10,000 stock options representing equivalent number of equity shares of Rs. 10/- each of the Company, respectively, to eligible employees under the Employees Stock Options Scheme-2008, adopted through the Trust route.

The details of the options granted and outstanding up to March 31, 2014 as required by clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure IX to this Report.

PARTICULARS OF EMPLOYEES

The particulars of the employees as required by the provisions of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, forms a part of the Directors'' Report as Annexure X.

CONSERVATION OF ENERGY, TECNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

a) Conservation of energy, Technology absorption

As your Company does not fall under any of the industries listed out in the Schedule appended to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, particulars required to be disclosed with respect to conservation of energy and technology absorption, are not applicable to the Company.

Although the operations of your Company are not energy intensive, your Company takes various measures to reduce energy consumption by using energy-efcient computer systems and procuring energy efcient equipment.

Your Company believes that energy is a prime resource and as an ongoing practice, it ensures adequate distribution of load on all phases, and has installed harmonic flters to maintain the power factor close to 0.99 to 1.

For the Exchange servers, your Company has installed In-Row cooling system that cools equipment based on the heat generated, and ensures that no energy is wasted in running compressors excessively to maintain the desired temperature levels. Further, as a part of building Specifications, your Company has installed VRV air cooled Air- conditioning system for comfort. The Company has also installed precision air-conditioning having inverter compressors and sensor units, which accurately detect the heat-level variations and release the required volume of coolant. Hence the compressor rotates at varied frequencies and speeds, thereby, saving energy.

As an ongoing process, your Company evaluates new technologies and techniques to make its infrastructure more energy efcient.

B) Foreign exchange earnings/outgo during the year under review

Your Company is engaged in the business of operating a Commodity Exchange and the Company endeavours to export its services as and when opportunities are available.

The details of foreign exchange earnings and outgo form a part of the significant accounting policies and note no. 27 of Notes to accounts.

RESEARCH AND DEVELOPMENT

As a result of constant research and development, your Company continuously strives to ofer new and wide-ranging products in the realm of commodity futures. Moreover, your Company customises products so as to meet the needs of a wide range of market participants. Extensive research is also conducted to sensitise policy makers of the required changes to further develop the commodity futures market.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors'' Responsibility Statement, your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of afairs of the Company at the end of the FY 2013-14 and of the profit of the Company for that period;

3. They have taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. They have prepared the annual accounts of the Company on a ''going concern'' basis.

The above have to be read along with the section on Auditors'' Report, given earlier in this Directors'' Report.

ACKNOWLEDGMENTS

Your Directors would like to place on record their sincere gratitude to the Forward Markets Commission, Ministry of Consumer Afairs, Food and Public Distribution, Department of Economic Afairs, Ministry of Finance, Reserve Bank of India, Foreign Investment Promotion Board, Securities and Exchange Board of India, BSE Limited, Ministry of Corporate Afairs, Department of Post, Shareholders, Financial Institutions, Bankers, Members of the Exchange and Business Associates for their continued support and faith in the Company. Your Directors also wish to place on record their appreciation for the contribution made by employees at all levels.

For Multi Commodity exchange of india limited

satyananda Mishra

Chairman Mumbai August 18, 2014

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Mar 31, 2013

Dear Shareholders,

The Board of Directors is pleased to present the Eleventh Annual Report on the business and operations of your Company along with the Audited Statement of Accounts and the Auditors'' Report for the financial year (FY) ended March 31, 2013. The highlights for the year under review are given below:

Corporate Results

(in Rs. million, except for the pershare data)

STANDALONE CONSOLIDATED

2012-13 2011-12 2012-13 2011-12

Total income 6,446.95 6,310.26 6,451.90 6,313.88

Total operating expenditure 2,087.84 1,936.50 2,087.91 1,936.65

Profit before interest, depreciation,exceptional 4,359.11 4,373.76 4,363.99 4,377.23 items and tax

Less: Depreciation 307.47 271.72 307.47 271.72

Less: Interest 0.31 0.03 0.31 0.03

Less: Exceptional item - 142.28 - 142.28

Profit before tax 4,051.33 3,959.73 4,056.21 3,963.20

Provision for tax 1,064.94 1,097.85 1,064.94 1,097.85

Profit after tax 2,986.39 2,861.88 2,991.27 2,865.35

Add: Share of profits of associate - - 0.26 1.78

Less: Share of minority interest - - (0.01) 0.05

Add: Balance of profit of earlier years 6,242.27 5,090.82 6,251.18 5,094.43

Balance available for appropriation 9,228.66 7,952.70 9,242.70 7,961.61

Less: APPROPRIATIONS

Final dividend (Proposed) 611.98 305.99 611.98 305.99

Interim dividend (Paid) 611.98 917.97 611.98 917.97

Taxon Dividend 203.29 198.56 203.29 198.56

Transfer to General Reserve 298.64 286.19 298.64 286.19

Settlement Guarantee Fund (SGF) 1.84 1.72 1.84 1.72

Balance carried to Balance Sheet 7,500.93 6,242.27 7,514.97 6,251.18

Earnings per share (Rs.) (Basic & Diluted) 58.56 56.12 58.66 56.22

Performance

Your Company continues to grow steadily, both in terms of business and earnings. As India''s leading commodity futures exchange with a market share of 87.3 per cent in terms of the value of commodity futures contracts traded in FY2012-13. Your Company has broadened and deepened India''s commodity futures market and continues to create enhanced value for all its stakeholders.

The Exchange was the third largest commodity futures exchange in the world, in terms of the number of contracts traded in the calendar year (CY) 2012, based on the Futures Industry Association''s annual volume survey released in March 2013. Moreover, as per the survey, during CY2012, MCX was the world''s largest exchange in silver and gold futures, second largest in copper and natural gas futures, and the third largest in crude oil futures.

During the fiscal, your Exchange launched three new contracts. On September 27, 2012, your Exchange launched Silver 1000, the first-of-its-kind deliverable 1 kg silver futures contract with New Delhi as the base delivery centre; and Kapasia Khalli (cotton seed oil cake) futures contract. In October 2012, your Exchange launched Mild Steel ingot/billet contract, which conforms to a BIS 2830 standard and is based on Raipur steel prices. On May 13, 2013, the commodity derivatives market regulator, Forward Markets Commission (FMC) allowed commodity futures exchanges to resume trading in guar seed and guar gum contracts, trading in which were discontinued a year ago. Subsequently, on May 14, 2013, MCX launched contracts in both these commodities.

With an aim to provide quick data access to its users, your Company adopted the Bloomberg Global Identifiers (''BBGID'') across all MCX traded contracts on its website. Bloomberg''s Open Symbology is useful for all commodity trackers, as this service can be leveraged for a wide array of functions, such as trading, research, and mapping, among others.

The number of contracts traded on your Exchange in FY2012-13 stood at 375 million as compared with 390 million in FY2011-12. While the average daily turnover stood at Rs.487.9 billion in FY2012-13 as compared with Rs.503.13 billion in FY2011-12, it is noteworthy that on April 15, 2013 your Exchange recorded its highest daily turnover since inception of 71,199.41 billion.

The total turnover of the commodity futures traded on your Exchange stood at 7148,810.57 billion in FY2012-13, as against 7155,970.96 billion in the previous fiscal. For the year ended March 31, 2013, your Company''s total income increased by 2 per cent to 76,446.95 million from 76,310.26 million during the last fiscal. The operating income during the period under consideration was 75,239.62 million, as against 75,451.08 million in FY2011-12. Other income during FY2012-13 was 71,207.33 million, as against 7859.18 million in the previous fiscal.

The net profit after tax for the year ended March 31, 2013 increased by about 4 per cent to 72,986.39 million from 72,861.88 million in FY2011-12. The net worth as on March 31, 2013 stood at 711,546.50 million.

Dividend

After considering your Company''s profitability and the dividend pay-out policy adopted by your Directors, shareholders will be pleased to note that your Directors have declared and paid an interim dividend of 712 per equity share on the face value of 710 per share for FY2012-13, totaling to 7611.98 million.

The Directors have further recommended a final dividend of 712 per equity share on the face value of 710 per share, totaling to 7611.98 million, subject to the approval of Shareholders at the ensuing Annual General Meeting. The total dividend, including interim and final (if approved), aggregate to 724 per share amounting to 71223.96 million for the financial year ended March 31, 2013.

The total appropriation on account of interim and final dividend and corporate tax on dividend thereon was 71427.25 million. The dividend will be tax-free in the hands of shareholders.

Share Capital

There was no change in the share capital of the Company during the year under review. As on March 31, 2013, the paid up share capital of your Company stood at 7509.99 million comprising 50,998,369 equity shares of 710 each fully paid.

Deposits

Your Company had not invited any deposits from the public, and as such, no amount of principal or interest related thereto was outstanding on the date of the Balance Sheet as on March 31, 2013.

Buy Back of Equity Shares

During the period under review, your Company did not announce any scheme for buying back equity shares from its Shareholders. Accordingly, the requirements as specified under Section 77A of the Companies Act, 1956 do not apply.

Compliance with the Equity Structure Guidelines

Your Company is in compliance with the applicable ''Guidelines on the Equity Structure of the Nationwide Multi Commodity Exchanges after 5 years of operation'' dated July 29, 2009, as amended from time to time, issued by Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Distribution, Government of India.

Subsidiaries

The Consolidated financial statements presented by the Company include financial information of its subsidiaries, namely Multi Commodity Exchange Clearing Corporation Limited (MCXCCL) and SME Exchange of India Limited (SME). MCXCCL, a wholly-owned subsidiary of the Company, was set up for the purpose of having a separate clearing house to provide services such as clearing and settlement of trades and guaranteeing counterparty risk. As on date, MCXCCL has not commenced operations, pending FMC approval; and its present paid-up capital is Rs.60 million.

The Company has subscribed up to 51 per cent of the equity of SME, pursuant to the approval received from FMC by letter dated September 12, 2011 for an initial investment of Rs.0.51 million in SME. SME''s paid-up capital is Rs.1 million and is yet to commence operations.

In terms of the general circular no. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs in respect of section 212 of the Companies Act, 1956, the Board has accorded consent for not attaching the balance sheet of the subsidiaries with the accounts of the Company. Pursuant to the Circular, the gist of financial details of the subsidiaries is included elsewhere in the report and forms part of this Annual Report. The Consolidated financial statements are prepared in accordance with Accounting Standard-21 - Consolidated Financial Statements issued by the Institute of Chartered Accountants of India form a part of this Annual Report and are reflected in the consolidated accounts of the Company. The Annual accounts of the subsidiaries and the related information shall be made available to the members of the Company and its subsidiaries on request, and also for inspection at the registered office of the Company.

Consolidated Financial Statements

The audited Consolidated Financial Statements, based on the financial statements received from subsidiaries and associates, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard - 21 (AS-21) - "Consolidated Financial Statements," and Accounting Standard - 23 (AS-23) - "Accounting for Investments in Associates" in Consolidated Financial Statements as notified under the Companies (Accounting Standard) Rules, 2006.

Outlook

Your Exchange offers trading in commodity futures from a diverse range of classes including bullion, ferrous and non- ferrous metals, energy and agriculture. Hitherto, your Exchange occupied a dominant position in metal and energy segments. However, your Exchange has stepped up efforts to attract participation in agri-commodities as well, due to the following:

- Commodities Transaction Tax (CTT)—introduced in the Finance Act 2013 and notified on June 19, 2013— of 0.01 per cent has been levied on the value of derivative transactions of non-agricultural commodities with effect from July 1, 2013

- The imposition of CTT will have its impact on the average daily volume and consequently the transaction revenue and profitability of the Company, as it will substantially increase the cost of transactions in commodity futures, which can disincentivise participation in CTT-levied commodities.

The FC(R) Amendment Bill, 2010 was cleared by the Cabinet on October 04, 2012 and the Parliamentary Standing Committee examining the FC(R) Amendment Bill, 2010 noted, inter alia, that FMC should be made autonomous, and indices, intangible Products and options be allowed to be introduced. The Committee also recommended that institutions such as banks, insurance companies, mutual funds, etc. should be allowed to participate on commodity derivative exchanges. Your Company has been making representations at various forums on the importance and the urgency associated with the early passage of this Bill in the Parliament.

While awaiting the notification on the Corporate Social Responsibility (CSR) Rules 2012, your Company intends to achieve CSR objectives by integrating its business processes with social processes, and developing innovative business models which create shared value.

Your Company, as per FMC''s direction to disclose information about the contracts traded on exchanges on their respective websites, has uploaded members''data on the Exchange''s website, www.mcxindia.com.

During the FY2012-13, FMC took many regulatory initiatives for risk management, orderly trading and investor protection. To ensure transparency in the Indian commodity futures market, the Commission emphasised on more disclosures by exchanges, issued guidelines for regulating algorithmic trading in commodities futures market, made the registration by exchanges of each and every client for SMS and e-mail alerts mandatory. Moreover, FMC approved the funding ofthe expenditure for publishing dabba trading advertisements through Multi Commodity Exchange Investor (Client) Protection Fund.

Further, algorithmic trading in micro and mini contracts was discontinued with effect from January 1, 2013, upon notification from FMC. It formulated broad guidelines for the regulation of algorithmic trading, wherein the eligibility criteria for traders to obtain registration under algorithmic trading has been set.

In addition, during the fiscal, FMC prescribed the base minimum capital requirements for the members of national-level commodity derivative exchanges.

Your Company has instituted market safeguards and risk management techniques to ensure that members meet their financial obligations promptly, and the market place is protected from undesirable events.

Commitment to Quality

Your Company has always maintained a customer and quality centric approach. With this in mind, it has successfully cleared the rigorous surveillance audit for certification to ISO 9001:2008 Quality Management Systems standard.

Further, your Company has a proactive Risk Management approach, and conducts risk assessment activities on a periodic basis. The Company maintains its commitment towards information security, and successfully cleared the ISO/IEC 27001:2005 surveillance audit too during FY2012-13. This certification provides reassurance to all stakeholders that MCX takes information security concerns very seriously, and all appropriate measures are taken to ensure that non- compliances do not occur. Your Company has an effective Environment policy and is governed by it. It has also cleared the ISO 14001:2004 re-certification audit, and continues to monitor its environment management plan, which is developed on the basis of the "Environment Review" conducted to assess the impact ofthe Company''s activities.

Environmental Responsibility

Your Company, an ISO 14001:2004 certified organisation, is committed to minimising its environmental impacts through the efficient use of natural resources, including electricity, which is the key touch point of the Exchange''s technology-driven business.

It strives to optimise energy use through state-of-the-art facilities in its office building and business operations. Some initiatives that have helped your Company reduce its energy consumption include: an environment friendly data centre; effective and efficient use of IT systems; automating manual processes to reduce the use of paper; capacity enhancement by optimising trading applications; minimising leakages to decrease the load on air conditioning units; and increasing employee awareness on various environmental issues.

Your Company has developed an e-waste policy for the safe disposal of e-waste—the main hazardous waste disposed from its premises. Your Company partners with authorised e-waste recyclers such as Eco Recycling Limited and Attero Recycling helps it dispose its e-waste in an eco-friendly manner. The e-waste disposal is in turn minimised through best practices in maintenance and re-use.

With the transaction volumes increasing, it was essential for your Company to enhance its system capacity. MCX has upgraded its trading software to maximise the use of the existing hardware, as deploying additional hardware entails incremental power consumption and additional rack space required for more servers.

Corporate Social Opportunities (CSO)

The interdependence between your Company''s business practices and the stakeholders of the Indian commodity market ecosystem define the sustainability of its business. In FY2012-13, we undertook a review of the impacts of our business on society and the environment. Based on this, instead of defining CSO only as its community initiatives, your Company realigned the function as an integral aspect of its business. This enabled your Company to co-create business and social value for its stakeholders at large. The detailed note on the sustainability and inclusion is covered in the section on Sustainability and Inclusion of this Annual report.

Awards and Recognition

Your Company received the following awards during the year under review:

- ''Best Commodity Exchange of the year''award at the Global Cotton Conference 2013

- MCX''s IPO was awarded the''Best Mid-cap Equity Deal''in the entire Asia-Pacific for 2012; it is the first exchange in Asia Pacific to receive this recognition

- MCX''s Gold Petal contract received the FOW award for''the most innovative contract launch by an exchange'' under the metals category

- Business Superbrand award

- Best Commodity Exchange of the year award by the Bombay Bullion Association at the 9th India International Gold Convention, held at Hyderabad

Corporate Governance

Your Company continues to be committed to good corporate governance aligned with the best corporate practices. The report on Corporate Governance, stipulated by Clause 49 of the Listing Agreement, along with the certificate from the Auditors of the Company regarding compliance with Corporate Governance norms form a part of this Annual Report.

Management''s Discussion and Analysis Statement

Management''s Discussion and Analysis Statement as stipulated under the Listing Agreement forms a part of this Annual Report.

Directors

FMC, vide its letter dated July 3, 2013, nominated Mr. Dinesh Kumar Mehrotra, under section 6(2)(b) of the Forward Contracts (Regulation) Act, 1952 as an Independent Director on the Board of the Exchange for a period upto March 31, 2016. FMC vide its letter dated April 2, 2012 had appointed Mrs. Usha Suresh, Economic Adviser in the Commission, as an Independent Nominee Director on the Board of your Company to represent Central Government for a term up to March 31, 2013. As her term expired, and no intimation regarding her term''s extension was received from FMC, Mrs. Usha Suresh ceased to be a Director of the Company w.e.f. April 1, 2013. The Board placed on record its appreciation for the valuable contribution made by Mrs. Usha Suresh during her tenure as a Director of the Company.

Pursuant to the Guidelines for Constitution of the Board of Directors, Nomination of Independent Directors and appointment of CEO at the Nationwide Multi Commodity Exchanges issued by FMC read with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. Venkat Chary, Mr. C. M. Maniar and Mr. Shvetal Vakil retire by rotation, and being eligible, offer themselves for re-appointment.

Auditors

The Auditors of your Company, Deloitte Haskins & Sells, Chartered Accountants, Mumbai (Regn. No. 117366W), will hold office until the conclusion of the ensuing Annual General Meeting of the Company. The Auditors have confirmed their eligibility and willingness to act as Auditors, if re-appointed, and the necessary certificate pursuant to Section 224(1B) of the Companies Act, 1956 has been received from them.

Auditors'' Report

Deloitte Haskins & Sells, Chartered Accountants, Mumbai (Regn. No. 117366W), have audited the accounts of your Company for FY2012-13. There are no qualifications in the Auditors'' Report.

However, the Auditors in their Audit observation have, as a "matter of emphasis" drawn attention to Note 35 regarding the Company''s stand of not treating member''s margins and income thereon as a part of the Settlement Guarantee Fund (SGF) contemplated under FMC''s directions, and instead crediting such margins to''Other current liabilities''and such income to the Statement of Profit and Loss (amounts unascertained).

The Company does not treat members margins and income thereon as part of SGF. On a review of international practices followed in this respect. In their submission to FMC, your Company has indicated that SGF is separate and distinct from deposits and margins placed by its members. MCX is awaiting FMC''s decision on this matter.

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, names and other particulars of employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information is being sent to all the shareholders of the Company and others entitled thereto. Shareholders who are interested in obtaining such particulars may write to the Company at its registered office.

Particulars under section 9(2) of the Forward Contracts (Regulation) Act, 1952 read with rule 12 of the Forward Contracts (Regulation) Rules, 1954

In terms of the provisions of Section 9(2) of the Forward Contracts (Regulation) Act, 1952 read with Rule 12 of the Forward Contracts (Regulation) Rules, 1954, commodity exchanges are required to include certain particulars in their Annual Reports. These particulars for your Company are presented as Annexure I to Annexure VIII to the Directors'' Report.

Human Resource Development

Your Company believes that an organisation''s most invaluable resource is its employees. The Company''s focus is on developing the core competencies of employees, and establishing a strong bond among them by providing a stimulating environment that enables sharing of knowledge, information, experience and resources, across all levels. The Company endorses a work environment which is fair, equitable and comfortable for its workforce. In cognisance of the fact that employee satisfaction drives commitment, and commitment drives business performance, your Company has tried to create a cordial workplace atmosphere. Regular employee interaction events and contests are conducted, which give employees the deserved break from the day-to-day demanding situations. The key objective of these events is to promote employee bonding, build higher levels of employee engagement and organisational synergy, and bolster the sense of belonging and pride in working for your Company. While the Company continues to attract, retain and nurture talented people in its endeavour to be an employer of choice, it is noteworthy that over the years many of its erstwhile employees have re-joined the Company.

During the year under review, the Compensation Committee of the Board at their meetings held on October 3, 2012 and April 19, 2013 considered and approved the grant of 10,000 and 25,300 stock options representing equivalent number of equity shares of Rs.10/- each of the Company, respectively, to eligible employees under the Employee Stock Option Scheme - 2008, adopted through the Trust route.

The details of the options granted and outstanding up to March 31, 2013 as required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure IX to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo A) Conservation of energy, technology absorption

As the Company does not fall under any of the industries listed out in the Schedule appended to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, particulars required to be disclosed with respect to conservation of energy and technology absorption, are not applicable to the Company.

The operations of your Company are not energy intensive. Your Company takes various measures to reduce energy consumption by using energy-efficient computer systems and procuring energy efficient equipment. As an ongoing process, your Company evaluates new technologies and techniques to make its infrastructure more energy efficient.

B) Foreign exchange earnings/outgo during the year under review

The Company is engaged in the business of operating a Commodity Exchange and the Company endeavours to export its services as and when opportunities are available.

The details of foreign exchange earnings and outgo forms a part of the significant accounting policies and note 26 of Notes to accounts.

Research and Development

As a result of constant research and development, your Company continuously strives to offer new and wide-ranging products in the realm of commodity futures. Moreover, your Company customises products so as to meet the needs of a wider range ofthe Indian commodity market''s participants. Extensive research is also conducted for informing policy makers about the required changes to further develop the commodity futures market.

Directors'' Responsibility Statement

As required by Section 217 (2AA) of the Companies Act 1956 your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the FY2012-13 and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. They have prepared the annual accounts on a''going concern basis''.

Acknowledgements

Your Directors would like to place on record their sincere gratitude to the Forward Markets Commission, Ministry of Consumer Affairs, Food and Public Distribution, Ministry of Finance, Reserve Bank of India, Foreign Investment Promotion Board, Securities and Exchange Board of India, BSE Limited, Department of Post, Shareholders, Financial Institutions, Bankers, Members of the Exchange and Business Associates for their continued support and faith in the Company. Your Directors also wish to place on record their appreciation for the contribution made by employees at all levels.

For and on behalf of the Board of Directors

Multi Commodity Exchange of India Limited

Mumbai Venkat Chary

July 29,2013 Chairman

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Mar 31, 2012

Dear Shareholders,

The Directors are pleased to present their report on the business and operations of your Company together with the Audited Statement of Accounts and the Auditors' Report for the financial year ended March 31, 2012. The highlights for the year under review are given below:

Corporate Results (in Rs. million, except for the per share data)

Standalone Consolidated

2011-12 2010-11 2011-12 2010-11

Total Income 6,289.07 4,472.87 6,292.69 4,475.60

Total Operating Expenditure 1,915.31 1,771.54 1,915.46 1,771.54

Profit before Interest, depreciation, exceptional items and tax 4,373.76 2,701.33 4,377.23 2,704.06

Less: Depreciation 271.72 246.59 271.72 246.59

Less: Interest 0.03 0.20 0.03 0.20

Less: Exceptional item 142.28 - 142.28 -

Profit before tax 3,959.73 2,454.54 3,963.20 2,457.27

Provision for tax 1,097.85 726.30 1,097.85 726.30

Profit after tax 2,861.88 1,728.24 2,865.35 1,730.97

Add: Share of profits of associate - - 1.78 2.59

Less: Share of minority interest - - (0.05) -

Add: Balance of profit of earlier years 5,090.82 3,832.89 5,094.43 3,831.18

Balance available for appropriation 7,952.70 5,561.13 7,961.61 5,564.74

Less: APPROPRIATIONS

Final Dividend (Proposed) 305.99 254.99 305.99 254.99

Interim Dividend (Paid) 917.97 - 917.97 -

Tax on Dividend 198.56 41.37 198.56 41.37

Transfer to General Reserve 286.19 172.82 286.19 172.82

Settlement Guarantee Fund (SGF) 1.72 1.13 1.72 1.13

Balance carried to Balance Sheet 6,242.27 5,090.82 6,251.18 5,094.43

Earnings per share (Rs.) (Basic & Diluted) 56.12 33.89 56.22 33.99

Performance

Your Exchange continues to strengthen its business and scale up the value chain, thereby broadening and deepening the commodity futures industry and delivering enhanced value to all its stakeholders. Your Exchange was the third largest globally, in terms of the number of commodity futures contracts traded during CY 20114.

The total value of commodity futures contracts traded on MCX during the FY 2012 was Rs.155,970.96 billion as against Rs.98,414.81 billion in FY 2011, reflecting a growth of about 58 per cent. According to the data maintained by the industry regulator, the Forward Markets Commission (FMC), during the FY 2012, your Exchange had a market share of 86 per cent of the Indian commodity derivatives market in terms of the value of commodity futures contracts traded during the period. During CY 2011, your Exchange was the world's largest exchange in silver and gold, second largest in natural gas, and third largest in crude oil, with respect to the number of futures contracts traded3 Your Exchange recorded its highest daily turnover since inception of Rs. 1,116.66 billion on September 23, 2011.

Your Exchange launched a futures contract in one gram gold called Gold Petal (Mumbai-based contract) April 2011, Gold Petal New Delhi contracts in November 2011 and copper mini and nickel mini contracts in December 2011, all of which offer trading in smaller lot sizes. In October 2011, your Exchange also launched cotton (29mm) futures contracts to meet the needs of the cotton value chain.

Your Company's operating income grew from Rs.3,688.92 million in FY 2010-2011 to Rs.5,262.01 million in FY 2011-12, reflecting a growth of about 43 per cent. Other income for FY 2011-12 was Rs.1,027.06 million as against Rs.783.95 million in the previous year.

The net profit after tax for the year ended March 31, 2012 increased by 66 per cent from Rs.1,728.24 million in fiscal 2011 to Rs.2,861.88 million in fiscal 2012 and the net worth stood at Rs.9,989.16 million as on March 31, 2012.

Dividend

After considering your Company's profitability and the dividend pay-out policy adopted by your Directors, shareholders will be pleased to note that your Directors have declared and paid an interim dividend of Rs. 18 per equity share on face value of Rs. 10 per share for the financial year 2011-12, totaling to Rs. 917.97 million.

Your Directors have further recommended a final dividend of Rs. 6 per equity share on face value of Rs.10 per share, totaling to Rs. 305.99 million, subject to the approval of Shareholders at the ensuing Annual General Meeting. The total dividend, including interim and final (if approved), aggregate to Rs.24 per share amounting to Rs.1,223.96 million for the financial year ended March 31, 2012.

The total appropriation on account of interim and final dividend and corporate tax on dividend thereon is Rs.1,422.52 million. The dividend will be tax-free in the hands of the Shareholders.

Share Capital

There was no change in the share capital of the Company during the year under review. As on March 31, 2012, the paid up share capital of your Company stood at Rs.509.99 million comprising 50,998,369 equity shares of Rs.10 each fully paid.

Deposits

Your Company has not invited any deposits from the public, and as such, no amount of principal or interest related thereto was outstanding on the date of the Balance Sheet as on March 31, 2012.

Buy Back of Equity Shares

During the period under review, your Company did not announce any scheme for buy back of equity shares from its Shareholders. Accordingly, the requirements as specified under Section 77A of the Companies Act, 1956 do not apply.

Initial Public Offer (IPO) / Listing of Equity Shares and Compliance with the Equity Structure Guidelines

Your Company successfully completed its IPO in February 2012, and we are glad to inform you that on March 9, 2012, your Company became the first exchange in India to be listed. The IPO, which was a pure offer for sale by certain existing shareholders, was a grand success and received an overwhelming response from all the segments of the market—retail, FIIs (foreign institutional investors), Indian banks & institutions and HNIs (high net worth individuals). The retail portion was oversubscribed on the opening day itself (February 22, 2012). On the closing day (February 24, 2012), the retail portion was subscribed over 23 times and became one of the best IPOs ever in terms of retail interest generated in the market.

Considering the overwhelming response, the shares of MCX, on March 9, 2012, listed on BSE at a premium of 34 per cent on the issue price of Rs.1,032 (opening price was Rs.1,387/- and intraday price reached a peak of Rs.1,426/-). Consequent upon the completion of the IPO, Financial Technologies (India) Limited, the promoter of your Company, and your Company duly complied with the 'Guidelines on the Equity Structure of the Nationwide Multi Commodity Exchanges after 5 years of operation' dated July 29, 2009, issued by FMC.

Subsidiaries

Multi Commodity Exchange Clearing Corporation Limited (MCXCCL), a wholly-owned subsidiary of the Company, was set up for the purpose of having a separate clearing house to provide services such as clearing and settlement of trades and counterparty risk guarantee. As on date, MCXCCL has not commenced operations, pending FMC approval; and its present paid-up capital is Rs. 60 million.

The Company has subscribed up to 51 per cent of the equity of the SME Exchange of India Limited (SME) pursuant to the approval received from FMC by letter dated September 12, 2011 for an initial investment of Rs. 0.51 million in SME.

In terms of the general circular no. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs in respect of section 212 of the Companies Act, 1956, the Board has accorded the consent for not attaching the balance sheet of the subsidiaries with the accounts of the Company. Pursuant to the Circular, the gist of financial details of the subsidiaries are included elsewhere in the report and forms part of this Annual Report. The Consolidated financial statements are prepared in accordance with Accounting Standard 21 – Consolidated Financial Statements issued by Institute of Chartered Accountants of India forms part of this Annual Report and are reflected in the consolidated accounts of the Company. The Annual accounts of the subsidiaries and the related information shall be available to the members of the Company and its subsidiaries on request and also for inspection at the registered office of the Company.

Consolidated Financial Statements

The audited Consolidated Financial Statements, based on the financial statements received from subsidiaries and associates, as approved by their respective Board of Directors, have been prepared in accordance with Accounting Standard - 21 (AS-21) on "Consolidated Financial Statements," Accounting Standard - 23 (AS-23) on Accounting for Investments in Associates issued by Companies (Accounting Standard) Rules, 2006.

Outlook

The India growth story is still credible as the drivers of growth—entrepreneurism, productivity, large consumer market with potentially large savings base, and strong legal system—are intact.

Your Company bears testimony to the growth and development witnessed by the Indian commodity futures market. Global demand and supply, increasing sophistication among participants, availability of innovative products, technological accessibility, deregulation and globalisation have paved the way for a sound global derivatives market growth. Although the Indian commodity markets have been restricted to domestic participation, the business practices and products and services offered can not only be globally referenced but are also highly correlated to the global commodity derivatives market.

Your Company aims to capitalise on its strengths to transform the markets through its relentless efforts focused on innovating, disseminating information, creating awareness and forging alliances with trade bodies and associations. These focused efforts would augment market participation, and concomitantly lead to the growth of the market, and strengthen India's footprint on the global canvas of commodity derivatives markets.

We are confident of bridging the gap created as a result of the current legal and regulatory restrictions in India's commodity derivatives market, once the FCRA Amendment Bill 2010 is passed into law. It is widely believed that the bill, which has been recommended by the Parliamentary Standing Committee of the Ministry of Consumer Affairs, Food and Public Distribution, on December 19, 2011, will be passed into law by the Parliament in the forthcoming session.

Anchored in our belief that listing on

an exchange is among the foremost attributes for a company aspiring for the best form of corporate governance, public scrutiny and transparency, MCX got listed on March 9, 2012. The Company now has the highest level of shareholder and public scrutiny, corporate governance and transparent trade practices, which are at par with global standards. We will continue to build upon our inimitable resource of trust and transparency.

Marketing, Educational And Awareness Efforts

Your Company employs various avenues to promote awareness and enhance knowledge about the commodity derivatives market. Various print and electronic media are employed for disseminating prices and spreading awareness. Your Company offers training and certification programmes to educate existing and potential market participants on commodity futures and equip them for various job opportunities in this industry. As a part of its continuing efforts to promote participation, your Company regularly interacts with brokers, physical market participants and other participants. A multitude of the awareness programmes for small and large participants, educational institutions, Government bodies, etc., are conducted by your Company jointly with FMC and other national exchanges. These awareness creation activities are partially supported by the Government and the FMC.

Your Company installs electronic tickers for price dissemination at various local mandis and other locations for wide-spread and efficient dissemination of price information to the physical market participants. In addition, your Company also disseminates futures prices through prominent commodity related websites, newspapers and electronic media channels, thus promoting availability of market information and intelligence.

Your Company strongly believes that increased awareness and understanding of the commodity derivatives market among the public would aid in building membership and user base.

Corporate Social Opportunities

Your Company treats its social responsibility as a strategic opportunity to make a difference in the communities it nurtures and to the society at large. Your Company performs two critical social responsibility functions: helping community development, and creating a long-term stakeholder constituency for strategic business needs. These functions are performed at two levels: at one level, this is performed within the Company; at another level, it reaches out to the broader community, thereby creating a critical interface between the your Company's core function and the society at large.

Using its domain expertise of commodity futures, your Company has devised projects with various partners thereby creating sustainable business models. Through its strategic alliances with several state postal departments of India Post, your Company has formed rural service centers, known as 'Gramin Suvidha Kendras'. Through this initiative, your Company provides farmers with information on spot and futures prices of their produce, expert advisory services, agricultural inputs, apart from advising them on new opportunities in agricultural marketing, risk management and finance. By providing farmers with future price information, your Company is spearheading a 'silent revolution'. Being armed with better information, farmers are able to make better decisions on production and marketing related activities. This model works on the principle and belief of expanding the farmers' role from the confines of 'producers' to broadened roles of 'marketers.'

The Gramin Suvidha Kendra project currently operates in six states - Rajasthan, Maharashtra, Madhya Pradesh, Uttar Pradesh, Karnataka and Gujarat. The project has 38 centres, which reach out to farmers through 575 branches of the Indian Postal department. To facilitate the project's initiatives, your Company supplies the information and communication technology infrastructure at each of the Gramin Suvidha Kendra centres.

In 2011, your Company became the first exchange in India to report its 'sustainability' performance for the year 2009-10. In 2012, your Company continued its sustainability journey and published an abridged version of its second Sustainability Report—'Commitment to Sustainability'—in January 2012. This Report describes your Company's approach to sustainability, environment and corporate governance process in its business. The report has been prepared in accordance with the level A of Global Reporting Initiative's (GRI) G3 Guidelines (2006) and is assured based on AA1000 Assurance standard 2008.

There are various other employee participatory programmes that signify the social concern of your Company. These include various initiatives such as 'HIV-AIDS' awareness drive, environment awareness drive, employee volunteerism, pay roll deduction, participation in the Mumbai Marathon, blood donation drive, and so on.

Corporate Governance

Your Company continues to be committed to good corporate governance aligned with the best corporate practices. The report on Corporate Governance stipulated by Clause 49 of the Listing Agreement, along with the certificate from the Auditors of the Company regarding compliance with Corporate Governance norms, forms part of this Annual Report.

Management's Discussion and Analysis Statement

Management's Discussion and Analysis Statement as stipulated under the Listing Agreement, forms a part of this Annual Report.

Directors

Mr. P. Satish was appointed as a Nominee of NABARD with effect from December 28, 2011 in place of Mr. S. Balan. Mr. K. Venugopal was appointed as a Nominee of State Bank of India (SBI) with effect from January 10, 2012 in place of Mr. B. Sriram. SBI relinquished its right of nomination on the Board and by a letter dated June 8, 2012, withdrew its nominee from the Board. Accordingly, Mr. K. Venugopal, nominee of SBI, ceased to be a director with effect from June 8, 2012.

FMC has extended the term of Mrs. Usha Suresh, Economic Advisor in the Commission, as Director on the Board to represent the Central Government till March 31, 2013. Consequent upon the expiry of the term of appointment as prescribed by the FMC, Mr. K.T. Chacko and Mrs. Ashima Goyal ceased to be Directors with effect from April 01, 2012. FMC, vide its letters dated June 13, 2012 and June 14, 2012, nominated Mr. Ravi Kamal Bhargava and Dr. Prakash Apte, respectively, as Independent Directors on the Board of your Company for the period till March 31, 2015.

Mr. P.G. Kakodkar and Mr. V. Hariharan ceased to be Directors of the Company with effect from June 28, 2012. In the casual vacancy created by the resignation of Mr. P. G. Kakodkar, Mr. P. R. Barpande is appointed as a Non-Executive Independent Director with effect from June 28, 2012.

Mr. Lambertus Rutten, on the expiry of his term as the MD & CEO on the close of business hours on June 30, 2012, ceased to be the MD & CEO of the Company, and he continues to be on the Board of Directors as Non- Executive Director with effect from July, 1, 2012.

Mr. Shreekant Javalgekar has been appointed as additional Director with effect from June 28, 2012 and the Board of Directors recommended his appointment as the MD & CEO of the Company, subject to the approval of FMC and Shareholders, for a period of three years with effect from July 01, 2012 or date of approval of FMC, whichever is later. Based on the FMC letter no. 4/5/2009-MD-I dated July 03, 2012, Mr. Javalgekar assumed office as MD & CEO of the Company from the date of his appointment, i.e. July 01, 2012.

The Board placed on record its sincere gratitude and support for the efforts of Mr. Lambertus Rutten during his tenure as the MD & CEO of the Company. The Board also placed on record its appreciation for the valuable contribution made by Mr. V. Hariharan, Mr. P.G. Kakodkar, Mr. S. Balan, Mr. K. Venugopal, Mr. B. Sriram, Mr. K.T. Chacko and Mrs. Ashima Goyal, during their respective tenures as Directors of the Company.

Pursuant to the Guidelines for Constitution of the Board of Directors, Nomination of Independent Directors and appointment of CEO at the Nationwide Multi Commodity Exchanges issued by FMC read with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. Paras Ajmera, Mr. Lambertus Rutten and Mr. P. Satish retire by rotation and, being eligible, offer themselves for re- appointment.

Auditors

The Auditors of your Company, B S R and Company, Chartered Accountants, Mumbai, hold office until the conclusion of the ensuing Annual General Meeting. The retiring Statutory Auditors, M/s. B S R and Company, Chartered Accountants, Mumbai (Regn. No. 128900W) have informed that they do not wish to seek reappointment as the Statutory Auditors of the Company at the ensuing Annual General Meeting.

As recommended by the Audit Committee and the Board of Directors at their respective meeting held on July 26, 2012, subject to the approval of the shareholders at the ensuing Annual General Meeting, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai (Regn. No. 117366W) is proposed to be appointed as the Statutory Auditors of the Company. Deloitte Haskins & Sells, Chartered Accountants, have confirmed their eligibility and willingness to act as auditors, if appointed, and necessary certificate pursuant to section 224(1B) of the Companies Act, 1956, has been received from them.

Auditors' Report

M/s. B S R and Company, Chartered Accountants, have audited the accounts of the Company for the FY 2011-12. There are no qualifications in the Auditors' Report. The comments in the Auditors' Report read with the notes to accounts are self explanatory.

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, names and other particulars of the employees are required to be set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information, is being sent to all the shareholders of the Company and others entitled thereto. Shareholders who are interested in obtaining such particulars may write to the Company at its registered office.

Human Resource Development

MCX believes in providing a stimulating environment that helps develop core competencies of its employees and equips them to excel in a dynamic business environment. Sharing of knowledge, information, experience and resources across all levels ensures development of core competencies.

Your Company enjoys cordial employee relations across all levels. It fosters a culture of learning, innovations and collaboration, and focuses on offering a combination of benefits such as performance based compensation, career planning, providing for growth opportunities, and so on. The Human Resources department focuses on making work an enjoyable experience by providing the right balance between work and fun.

As of March 31, 2012, the total employee strength stood at 266.

During the year under review, the Compensation Committee, at its meeting held on October 24, 2011 granted 331,750 options under the Employee Stock option Scheme ESOP – 2008 to the eligible employees and Directors.

The details of the options granted and outstanding up to March 31, 2012 as required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure IX to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo

A) Conservation of energy, technology absorption

As the Company does not fall under any of the industries listed out in the Schedule appended to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, particulars required to be disclosed with respect to conservation of energy and technology absorption, are not applicable to the Company.

The operations of your Company are not energy intensive. Your Company takes various measures to reduce energy consumption by using energy-efficient computer systems and procuring energy efficient equipment. As an ongoing process, your Company evaluates new technologies and techniques to make its infrastructure more energy efficient.

B) Foreign exchange earnings/outgo during the year under review

The Company is engaged in the business of operating a Commodity Exchange and the Company endeavours to export its services as and when opportunities are available. The details of foreign exchange earnings and outgo form a part of the significant accounting policies and note 26 of notes to accounts.

Research and Development

As a result of constant research and development, your Company continuously strives to offer new and wide-ranging products relating to futures trading in commodities. Moreover, your Company customises products so as to attract a broader base of participants and meet the needs of the Indian commodity market participants.

PARTICULARS UNDER SECTION 9(2) OF THE FORWARD CONTRACTS (REGULATION) ACT, 1952 READ WITH RULE 12 OF THE FORWARD CONTRACTS (REGULATION) RULES, 1954

In terms of the provisions of Section 9(2) of the Forward Contracts (Regulation) Act, 1952 read with Rule 12 of the Forward Contracts (Regulation) Rules, 1954, Commodity Exchanges are required to include certain particulars in their Annual Reports. These particulars for your Company are enclosed as Annexure I to Annexure VIII to the Directors' Report.

Directors' Responsibility Statement

As required by Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the FY 2011-12 and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. They have prepared the annual accounts on a 'going concern basis'.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their sincere gratitude to the Forward Markets Commission, Ministry of Consumer Affairs, Food and Public Distribution, Ministry of Finance, Reserve Bank of India, Foreign Investment Promotion Board, Securities and Exchange Board of India, BSE Limited, Department of Post, Shareholders, Financial Institutions, Bankers, Members of the Exchange and Business Associates for their continued support and faith in the Company. Your Directors also wish to place on record their appreciation for the contribution made by employees at all levels but for whose hard work, solidarity and support your Company's growth would not have been possible.

For and on behalf of the Board of Directors

Multi Commodity Exchange of India Limited

Mumbai Venkat Chary

July 26, 2012 Chairman

---

Mar 31, 2011

TO THE MEMBERS OF MCX STOCK EXCHANGE LIMITED

The Directors have pleasure in presenting their Third Annual Report and the Audited Statement of Accounts and AuditorsRs. Report for the period commencing from April 1, 2010 to March 31, 2011.

1. FINANCIAL RESULTS

(Rs. in crore) Particulars Period ended Period ended March 31, 2011 March 31, 2010

Total Income 39.15 29.52

Less: Expenditure 96.95 85.73

Loss Before Tax 57.80 56.21

Less: Provision For Tax - -

Loss After Tax carried to Balance Sheet 57.80 56.21

During the year under review, the Company registered a Total Income of Rs. 39.15 crore as against Rs. 29.52 crore during the previous year. The loss after tax for the year under review was Rs. 57.80 crore as compared to Rs. 56.21 crore in the previous year.

The loss, which has been continuing from the previous years, has been incurred due to lack of any operational revenue streams in the Currency Derivatives (CD) segment of the Exchange, which is currently, its only operational trading segment. This has arisen out of an inability of the Exchange to charge any transaction fee which is the mainstay revenue of any stock exchange. This was in turn caused by the abuse of a superdominant position by the ExchangeRs.s main competitor through adoption of a predatory zero pricing policy in its CD segment alone, which has now continued for more than two and a half years.

The Company had approached the Competition Commission of India for relief against the anticompetitive practices of the competitor and the Commission has now passed an order dated June 23, 2011, finding the competitor to be in contravention of several clauses of section 4 of the Competition Act, 2002 and inter alia directing under Section 27 of the Act as under -

a) directing the competitor to cease and desist from unfair pricing, exclusionary conduct and unfairly using its dominant position in other market/s to protect the CD market;

b) directing the competitor to maintain separate accounts for each segment from April 1, 2012;

c) directing the competitor to modify its zero price policy and ensure that appropriate transaction costs are levied - to be implemented within 60 days of the order;

d) imposing a penalty of Rs. 55.5 crore on the competitor;

Your Company hopes to do much better in the next year as conditions of free and fair competition are expected to be restored in the stock exchange services market in view of the above order.

The ExchangeRs.s applications for grant of regulatory approvals for commencement of trading in other segments and products have been rejected by an order dated September 23, 2010 passed by the Securities and Exchange Board of India (SEBI). The Exchange has challenged the said order by way of a writ petition filed before the HonRs.ble High Court of Bombay, which is pending admission. Granting of relief by the competition regulator in the CD segment and commencement of other segments, subject to outcome of the proceedings before the HonRs.ble High Court, would open up operational revenue streams for the Company.

2. CORPORATE AND BUSINESS BACKGROUND

MCX Stock Exchange Ltd., IndiaRs.s New Stock Exchange, was granted recognition by the Securities and Exchange Board of India (SEBI) under the Securities Contracts (Regulation) Act, 1956. It commenced trading in the CD segment on October 7, 2008, under the regulatory framework of SEBI and Reserve Bank of India (RBI).

Within a year of its launch, MCX-SX has proved its mettle as the thought leader and innovator of the industry by introducing innovative services and pioneering market development initiatives.

Currently, the Exchange provides a trading platform only for the CD segment. It offers currency futures contracts in four currency pairs

- USDINR, EURINR, GBPINR and JPYINR. The Exchange is poised to extend the offer to Interest Rate Futures (IRF), Equities (Cash & F&O), Indices and ETF, Debt and SME products, subject to regulatory approvals.

The Exchange has an on-line screen based order matching system which is hosted on a fully Fault Tolerant Stratus Server. This Stratus Server has "continuous processing" features, providing continuous availability. MCX-SX trading system is an order driven system. The identities of buyers and sellers are not disclosed as it is an anonymous order matching system. Orders entered into the trading system are subject to various validation requirements including trading parameters, turnover limits, and/or other restrictions placed, if any. Orders that do not meet the validation checks are not accepted by the trading system.

Among hosts of benefits, this state-of-the-art transparent national trading platform offers to a wide range of financial market participants - hedgers (i.e. exporters, importers, corporates and banks), investors and arbitrageurs -- price discovery and price risk management are of foremost importance.

TURNOVER AND MEMBERSHIP GROWTH

It was observed that the Average Daily Turnover in the Currency Futures segment has shown a marginal decrease from April 2010 to March 2011 i.e. the Average Daily Turnover which was at Rs.19651.14 crore in April 2010 fell to Rs.18359.02 crore in March 2011. The reduction in the turnover of Curren cy Futures volume was also experienced by the other major exchanges operating in the market. As USD/INR options has been included in the CD segment as per extant guidelines, the overall volumes of Currency Futures contract exclusively has shown a moderate decline.

However, as on March 2011, the Exchange had 734 members through 4556 users spread across 555 centers, as against 658 members through 4473 users spread across 498 centers as on March 2010. As such the number of users have increased, indicating broad based participation in the Currency Futures platform.

The turnover and open interest for the period April 01, 2010 to March 31, 2011 is reflected in the graph below

MARKET STATISTICS OF MCX-SX FOR THE PERIOD

Performance March 2011 March 2010

Approved no. of members (Registered with SEBI) 734.00 658.00

Centers participating across India 555.00 498.00

Average daily turnover (Rs. in cr.) 18,359.02 18,167.24

Highest turnover (Rs. in cr.) 26,741.38 22,756.36

Average daily volume (no. of contracts) 4,005,549 3,824,972

Highest no of contracts (no. of contracts) 5,865,789 4,771,129

MONTHLY TRADING STATISTICS

Currency Futures Segment at MCX-SX

Month/ Year No. of Contracts Trading Value Average Daily Open Interest at Traded (Rs. In Crs.) Trading Value the end of the month (Rs.in Crs.) (in lots)

0ct-08 11,19,968 5,521.21 324.78 60,055

Nov-08 30,54,640 15,114.21 839.68 55,711

Dec-08 47,01,492 22,936.59 1,092.22 1,19,233

Jan-09 49,89,594 24,415.10 1,220.75 2,38,887

Feb-09 65,00,630 32,194.85 1,694.47 2,04,217

Mar-09 94,81,245 48,644.02 2,560.21 1,94,265

Apr-09 75,47,128 37,858.10 2,366.13 1,05,957

May-09 1,20,53,551 58,469.29 2,923.46 2,08,805

Jun-09 1,41,98,087 67,984.93 3,090.22 1,93,771

Jul-09 1,81,88,940 88,290.01 3,838.70 3,46,072

Aug-09 1,86,48,790 90,292.29 4,514.61 4,82,549

Sep-09 2,26,36,371 109,665.81 5,771.88 4,13,206

0ct-09 3,28,49,655 153,629.82 7,681.49 4,74,485

Nov-09 3,46,66,197 161,641.09 8,082.05 5,02,301

Dec-09 4,25,13,360 198,497.62 9,452.27 4,25,451

Jan-10 6,35,91,431 292,344.89 14,617.24 5,95,355

Feb-10 6,47,73,311 322,635.46 16,980.81 5,37,524

Mar-10 7,64,99,457 363,344.81 18,167.24 4,23,314

Apr-10 8,16,07,363 373,371.63 19,651.14 5,54,539

May-10 8,97,51,764 423,075.05 21,153.75 5,57,883

Jun-10 8,88,14,522 425,087.62 19,322.16 8,32,531

Jul-10 6,64,15,185 320,015.51 14,546.16 7,80,189

Aug-10 6,09,67,200 291,018.50 13,858.02 7,93,594 Sep-10 7,88,07,686 366,194.76 18,309.74 9,00,451

Oct-10 8,00,26,906 358,428.74 17,068.04 8,09,412

Nov-10 7,29,63,218 332,252.82 15,821.56 9,08,559

Dec-10 6,03,88,799 276,019.30 12,546.33 8,14,370

Jan-117 40,71,176 341,912.84 17,095.64 8,67,501

Feb-11 6,12,49,728 282,742.21 14,881.17 7,56,052

Mar-11 8,81,22,092 403,898.50 18,359.02 7,94,788

Apr-11 5,96,20,093 270,380.70 16,898.79 8,11,777

May-11 7,76,11,606 357,484.50 17,023.07 7,20,828

Period No. of Contracts Traded Tading Valu (Rs. In Crs.)

2008-09 (Oct-Mar) 2,98,47,569 148,825.98

2009-10 (Apr-Mar) 40,81,66,278 1,944,654.11

2010-11 (Apr-Mar) 90,31,85,639 4,194,017.48

2011-12 (Apr-May) 13,72,31,699 627,865.20

MEMBERSHIP

Membership on MCX Stock Exchange Ltd. is of three types:

Trading Members (TM): Can trade on their own account and also their clients, but cannot clear the trades. They have to clear the trades through a clearing member by becoming its constituent.

Trading-cum-Clearing Members (TCM): Can trade and clear the trades on their own account and also on account of their clients.

Professional Clearing Members (PCM): Can only clear the trades of other members. They cannot trade either on their own account or clients.

TECHNOLOGY

The IT infrastructure at the Exchange has been designed with performance, reliability, redundancy and security as the key parameters.

The technology deployed includes the latest fault tolerant servers and a hybrid network (nationwide satellite network, terrestrial point to point, nationwide MPLS network and Internet links) which enables members

CERTIFICATIONS

In continuation with its commitment to provide quality-driven services to members, MCX-SX has successfully cleared the ISO 9001:2008 Surveillance Audit and has been recommended for continuation of this certification. Further, information security being a crucial aspect of day to day business to connect to the Exchange from any location across the length and breadth of the country. The IT components are hosted in a state of the art datacenter that is designed to support mission critical operations. The datacenter and all its components are monitored 24x7x365.

The global technology platform enables our members to undertake uninterrupted dealing even during sun outage time experienced by other exchanges.

Processes, MCX-SX continues to retain the ISO/IEC 27001:2005 certification for its effective Information Security Management System. As a step towards demonstrating its dedication towards sustaining the Environment, MCX-SX has also cleared the Surveillance Audit for ISO 14001:2004, and continues to hold the certification for the same.

Sr. No. Certificate Purpose / Scope Certificate Date Validity

1. ISO 9001:2008 Quality Management System (QMS) 16-09-2009 15-09-2012

2. ISO/IEC Information Security Management 16-09-2009 15-09-2012 27001:2005 System (ISMS)

3. ISO 14001:2004 Environmental Management System 16-09-2009 15-09-2012

NEW INITIATIVES

The Stock Exchange continues its initiatives to spread knowledge and awareness on Financial Markets. Some of the key initiatives taken in the Exchange in the last year include:

- Communique - Monthly Exchange Newsletter giving important developments across various Exchanges of the world.

- Market Update - Encompasses the happenings around the Global Financial Markets & Macro view on Indian Financial Markets.

- Conduct of Training & Seminars across the length and breadth of the country continued during the last year also.

THE WAY FORWARD

The Exchange is fully committed to introduce trading in new asset classes under the extant regulatory framework subject to necessary regulatory approvals. The Company was not allowed to commence operations in other segments or products by an order dated 23rd September, 2010, passed by SEBI. The Company has challenged the above mentioned order of SEBI before the HonRs.ble High Court of Bombay by way of writ petition and the matter is pending for admission.

The introduction of other asset classes and products would be done subject to necessary regulatory approvals with best research and enhanced dissemination of Financial Literacy by educating the market participants about the usefulness as well as the risk involved in various asset classes.

The finances of the company would improve with the order of the Competition Commission of India mentioned above and the Company hopes to play a more fulfilling role in the Indian economy & securities market.

3. DIVIDEND AND RESERVES

In view of the fact that the Company is in its nascent stage of operations and is currently incurring losses, the Board of Directors do not recommended any dividend on the equity capital of the Company. For the same reason, no amounts are available for carrying to reserves

4. SHARE CAPITAL

The Authorised Share Capital of the Company is Rs. 250,00,00,000/- divided into 250,00,00,000 equity shares of Rs. 1/- each.

The Paid up Capital of the Company is Rs. 54,33,03,000/- divided into 54,33,03,000 equity shares of Rs. 1/- each. The shareholding pattern is under:

Sr. No. Category of Shareholder No. of shares held Percentage of share holding

1. Promoters 5,43,30,000 10.00%

2. Banks 38,45,00,000 70.77%

3. Financial Institutions 9,90,40,000 18.23%

4. MCX Stock Exchange ESOP Trust 54,33,000 1.00%

Total 54,33,03,000 100.00%

A total of 119,66,30,000 transferable warrants issued under the scheme of reduction cum arrangement which was sanctioned by the

5. DIRECTORS

With a view to meet the requirements of the Board composition as specified by the SEBI and after obtaining requisite approvals from it, three Additional Directors Mr. S.U. Kamdar, Mr. P.R. Barpande and Prof. (Mrs.) Ashima Goyal, were appointed as Public Interest Directors in the Board Meeting held on March 12, 2011. With their appointment, the strength of the Board has risen to 18, which is the maximum sanctioned strength under Articles of the Company.

The three Additional Directors, Mr. S.U. Kamdar, Mr. P. R. Barpande and Prof. (Mrs.) Ashima Goyal will cease to hold office at the Third Annual General Meeting of the Company and are eligible for appointment as Directors. The Company has received a notice in writing together with requisite

HonRs.ble High Court of Bombay are presently held by two shareholders. deposit from a Member under Section 257 of the Companies Act, 1956 proposing their candidature for the office of Directors of the Company. Your Board recommend their appointment as Directors of the Company.

Mr. A. A. Badshah (representing Bank of India), Mr. V.K. Khanna (representing Union Bank of India), Mr. C. VR. Rajendran (representing Corporation Bank) and Mr. P.K. Chhokra (representing Punjab National Bank) were appointed as Directors at the last Annual General Meeting till the third Annual General Meeting in accordance with a rotational representation policy. However, having regard to the current status of the Exchange, it is proposed for the sake of continuity that the same directors may continue. The Company has received a notice in writing from a Member under Section 257 of the Companies Act, 1956 proposing candidature of Mr. A.A. Badshah, Mr. V.K. Khanna, Mr. C. VR. Rajendran and Mr. P.K. Chhokra for the office of Directors of the Company. Your Directors recommend their appointment as Directors of the Company.

Mr. B.D. Sumitra, Mr. C.M. Maniar, Dr. Nitish Sengupta and Mr. Atul Rai are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

6. MANAGEMENT

The management of the Company is headed by Mr. Joseph Massey, Managing Director & CEO, who is in overall charge of the affairs of the Company, subject to the superintendence and oversight of the Board of Directors. The CD segment, which is the currently operational segment of the Exchange, is headed by Mr. U. Venkataraman, CEO-CD Segment & Whole-time Director, who reports to the Managing Director. There is a team of highly experienced and effective senior management personnel leading different Departments of the Exchange, which reports to the Managing Director and the Whole-time Director.

7. HUMAN RESOURCES AND PARTICULARS OF EMPLOYEES

During the period under review, emphasis was placed on Human Resource Planning with the objective of optimum utilization of existing manpower. Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the DirectorsRs. Report for the period ended March 31, 2011, is given in Annexure A to this Report.

8. SUBSIDIARY

The CompanyRs.s subsidiary, MCX-SX Clearing Corporation Limited (MCX-SXCCL), was jointly promoted by your Company, Multi Commodity Exchange of India Ltd. (MCX) and Financial Technologies (India) Ltd. (FTIL), as a new age Clearing Corporation constituted to undertake clearing and settlement of deals in multi asset classes. MCX-SXCCL offers best-in- class services to its clearing members with the help of its state of the art risk management framework and unparalleled clearing and settlement systems with dedicated linkages with clearing partners.

The subsidiary was incorporated on November 7, 2008 and was permitted by SEBI to undertake clearing and settlement functions of trades done in MCX-SX on Januar y 2, 2009. The subsidiary commenced its operations on February 16, 2009 after completion of requisite formalities including opening of accounts and execution of agreements with participants. The subsidiary currently clears the deals entered in the CD segment of MCX-SX.

During the financial year 2010-11, the subsidiary has registered a total income of Rs. 121,086,568/- as against Rs. 120,575,406/- during the previous year. The profit after tax for the year under review was Rs. 9,963,090/- compared to Rs. 11,390,067 /- in the previous year.

During the financial year, the MCX-SXCCL had successfully carried out 249 settlements amounting to Rs. 2086.73 crore without any delay and shortages. On account of its robust risk management practices, Settlement Guarantee Fund has never been put to use. Some other highlights of the year are:-

a) Based on an assessment carried out by reputed consulting agency, Deloitte Touche Tohmatsu India Private Limited ("DTTIPL"), MCX-SXCCL observes CPSS- IOSCO recommendations for Securities Settlement Systems - an international benchmark for central counterparties.

b) MCX-SXCCL has retained LAAA (SO) by ICRA, indicating the highest level of safety of collaterals parked with a Clearing Corporation.

c) MCX-SXCCL became the first Indian Clearing Corporation to obtain ISO certifications for quality management sys tem (I SO 9001 -2 008) a n d information security management system (ISO 27001-2005) in its first year of operations.

d) During the financial year, MCX-SXCCL has empanelled IDBI Bank as a clearing bank, and Stock Holding Corporation of India Limited as a custodian of collaterals to provide wider choice to members at competitive terms.

e) MCX-SXCCL has implemented Risk Analysis & Management System (RAMS) to strengthen its Risk Management Capabilities. RAMS system provides for simulation of margins considering various scenarios of prices and volatility. A dedicated module for collateral management was introduced during the year. MCX- SXCCL has also introduced Secured FTP, an interface which offers high level of security for transfer of files with various clearing intermediaries.

Information regarding the subsidiary, in accordance with the provisions of Section 212 of the Companies Act, 1956 is attached to the Balance Sheet.

9. COMPLIANCES

The Company is recognized as a stock exchange by SEBI under Section 4 of the Securities Contracts (Regulation) Act, 1956 (SCRA). The Company being a stock exchange adheres to SEBI Act, 1992 and SCRA, 1956 and also the various circulars as prescribed by the SEBI and RBI from time to time. The Company follows an internal policy of comprehensive compliance reporting.

10. DEPOSITS

The Company has not accepted any public deposits since its inception.

11. AUDITORS

Consequent upon implementation of the scheme of reduction cum arrangement in March 2010, the shareholding pattern of the Company had undergone a change whereby about 67% of the companyRs.s equity capital came to be held by public sector banks.

Consequently, as per the provisions of Section 619B of the Companies Act, 1956 the auditors of the Company for the current financial year, M/s Chaturvedi & Shah, Chartered Accountants, Mumbai were appointed by the Comptroller and Auditor General of India (CAG). In view of continuance of the same shareholding pattern, the auditors for the FY 2011-12 would also be appointed by the CAG.

12. COMPOSITION OF AUDIT COMMITTEE

As per Section 292A of the Companies Act, 1956, the Company has constituted an Audit Committee of the Board, comprising of four directors, of which three are independent directors. The composition of the Audit Committee is as follows:

1. Mr. C. M. Maniar - Chairman

2. Mr. B. D. Sumitra - Member

3. Mr. Joseph Massey - Member

4. Mr. P. R. Barpande - Member

The Audit Committee met five times during the financial year 2010-11 to transact business.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of activities which are being carried out on by the Company, Rules 2A and Rules 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, concerning conservation of energy and technology absorptions are not applicable to the Company.

There was no foreign exchange earnings during the period ended March 31, 2011. The foreign exchange outgo during the year ended March 31, 2011 cumulatively amounted to Rs. 1,88,57,790/- as compared to Rs. 29,78,895/- in the year ended March 31, 2010.

The Company does not directly contribute to export growth, as it is not allowed to export its services. However, the Company provides a platform to the small and medium enterprises (SMEs) and resident Indians, who hitherto did not have easy access to the currency market and takes necessary initiatives to educate these potential users on the benefits of risk management using currency futures through seminars and events. By providing a hedging mechanism, it indirectly encourages exports. The Company has tied up with the Federation of Indian Export Organisations (FIEO) for creating awareness amongst its members on risk management of volatility in foreign currency.

14. DIRECTORSRs. RESPONSIBILITY STATEMENT

Pursuant to Section 21 7(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:-

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

iii. they have taken proper and sufficient care, to the best of their knowledge and ability, to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv. They have prepared the annual accounts on a going concern basis.

15. BUY-BACK OF SHARES

As during the last financial year, your Company did not have any scheme of buyback of shares, the requirements specified in Section 217(2B) read with Section 77A of the Companies Act, 1956 are not applicable to the Company.

16. EMPLOYEES STOCK OPTION PLAN

The Company had formulated the Rs.MCX Stock Exchange Employee Stock Option Scheme, 2009, pursuant to the authorization of shareholders granted at the First Annual General Meeting of the Company, and in order to attract, encourage, motivate and retain talent in the Company. The MCX Stock Exchange ESOP Trust has begun the process of granting options to eligible employees under the scheme. A further authorization for additional allocations under the said scheme or one or more new schemes is being sought from shareholders at the Third Annual General Meeting. The requisite disclosures in terms of Clause 12 and other provisions of the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 are given in Annexure B to this Report.

17. ACKNOWLEDGEMENTS

The Directors would like to place on record their gratitude for the valuable guidance and support received from the Government of India, particularly Ministry of Finance and Ministry of Corporate Affairs, Securities and Exchange Board of India, Reserve Bank of India, participating banks, clearing banks, NSDL, CDSL, FEDAI, FIMMDA, FIEO, CII, FICCI, ASSOCHAM, IMC, IOSCO, SAFE, IGIDR, ICRIER, WFE, FIA , TIE, FISME and various other international, national and regional chambers of commerce, trade associations and all other broker-members, vendors, technology partners and all other business associates for the continuous support given by them to the Company.

The Directors also wish to convey their appreciation to the CompanyRs.s employees for their enormous personal efforts as well as their collective contribution which enabled the Company to meet the challenges set before it, including the fierce competition in the sector. The Board also acknowledged the contributions of the agencies, such as FTKMC, ICAI, ICSI, ICWAI, Door Darshan, Delhi University etc., who have inked Memoranda of Understanding with the Company to work towards the goal of "Financial Literacy and Financial Inclusion"

For and on behalf of the Board of Directors

Ashok Jha

Chairman

Date: June 30, 2011

Place: Mumbai

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Mar 31, 2010

TO THE MEMBERS OF MCX STOCK EXCHANGE LIMITED

The Directors have pleasure in presenting their Second Annual Report and the Audited Statement of Accounts and Auditors' Report for the period commencing from April 1, 2009 to March 31, 2010.

1. Financial Results (Rs. in crores)

Period ended Period ended March 31, 2010 March 31, 2009

Total Income 29.52 7.58

Less: Expenditure 85.73 37.33

Loss Before Tax 56.21 29.75

Less: Provision For Tax - 0.12

Loss After Tax carried to Balance Sheet 56.21 29.87

During the year under review, the Company has registered a Total Income of Rs. 29.52 crore as against Rs. 7.58 crore for the previous year. The loss after tax for the year under review was Rs. 56.21 crore as compared to Rs. 29.87 crore for the previous year.

The loss has been mainly due to lack of any operational revenue streams in the Currency Derivatives Segment of the Exchange, which is its only currently operational trading segment. This has arisen out of an inability of the Exchange to charge any transaction fee which is the mainstay revenue of any stock exchange. This was in turn caused by the abuse of a super dominant position of the Exchange's main competitor by adoption of a predatory zero pricing policy in its Currency Derivatives Segment alone, which has now continued for more than 20 months.

The Company has approached the Competition Commission of India for relief and the Commission has found a prima facie case against the competitor and initiated investigations. The Exchange has also applied to SEBI for approvals to commence other trading segments, post compliance with the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006. Granting of relief by the competition regulator in the CD Segment and commencement of other segments would open up operational revenue streams for the Company as it is unlikely that the competitor will implement a predatory zero pricing policy in those segments.

In view of the above, your Directors are confident that the Company could perform better in the next year.

2. Corporate and Business Background

MCX Stock Exchange Ltd India's New Stock Exchange was granted recognition by the Securities and Exchange Board of India (SEBI) under the Securities Contracts (Regulation) Act, 1956. It commenced trading in the Currency Derivatives Segment on October 7, 2008, under the regulatory framework of Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI).

Within a year of its launch, MCX-SX has proved its mettle as the thought leader and innovator of the industry by introducing innovative services and pioneering market development initiatives.

Currently the Exchange provides trading platform only in Currency Derivatives Segment for trading in currency futures contracts in four currency pairs - USDINR, EURINR, GBPINR and JPYINR. The Exchange is poised to extend the offer to Interest Rate Futures (IRF), Equities (Cash & F&O), Indices and ETF, Debt and SME products, subject to regulatory approvals.

The Exchange has an on-line screen based order matching system which is hosted on a fully Fault Tolerant (FT) Stratus Server. This Stratus Server has “continuous processing” features, providing continuous availability. MCX-SX trading system is an order driven system. The identities of buyers and sellers are not disclosed as an anonymous order matching system. Orders entered into the Trading System are subject to various validation requirements including trading parameters, turnover limits, and/or other restrictions placed, if any. Orders that do not meet the validation checks are not accepted by the Trading System.

Among hosts of benefits, this state-of-the-art transparent national trading platform offers to a wide range of financial market participants -- hedgers (i.e. exporters, importers, corporates and banks), investors and arbitrageurs -- price discovery and price risk management are of foremost importance.

GROWTH

The Exchange has witnessed an impressive growth since its inception which continued during the financial year 2009-10. Average daily turnover increased from Rs. 2366.13 crore in April 2009 to Rs. 18167.24 crores in March 2010.

As on June 30, 2010 the Exchange had 672 members participating through 4132 users spread across 501 centers. The Exchange is the No.1 Currency Futures Exchange in India with a market share of 54.05% (May 2010).

The Exchange achieved the highest turnover of Rs. 25523.33 crores with 5,510,862 contracts across all exchanges in Currency Derivatives on May 11, 2010.

Market Statistics of MCX-SX for the Period...

Performance April 2009 March 2010

Approved no of members (Registered with 545 658 SEBI)

Centers participating across India 451 498

Average daily turnover (Rs in Crs.) 2366.13 18,167.24

Highest turnover (Rs in Crs.) 3912.08 22,756.36

Average daily volume (no. of contracts) 471,695 3824,972

Highest no of contracts (no. of contracts) 775,953 4771,129

The turnover and open interest for the period April 01, 2009 to March 31, 2010 are reflected in the graph below:

MONTHLY TRADING STATISTICS

Currency Futures Segment at MCX-SX

Open Interest No. of Average Daily Trading Value at the end of Month/ Year Contracts Trading Value (Rs. Cr) the month (in Traded (Rs.Cr) lots)

Oct-08 11,19,968 5,521.21 324.78 60,055

Nov-08 30,54,640 15,114.21 839.68 55,711

Dec-08 47,01,492 22,936.59 1,092.22 1,19,233

Jan-09 49,89,594 24,415.10 1,220.75 2,38,887

Feb-09 65,00,630 32,194.85 1,694.47 2,04,217

Mar-09 94,81,245 48,644.02 2,560.21 1,94,265

Apr-09 75,47,128 37,858.10 2,366.13 1,05,957

May-09 1,20,53,551 58,469.29 2,923.46 2,08,805

Jun-09 1,41,98,087 67,984.93 3,090.22 1,93,771

Jul-09 1,81,88,940 88,290.01 3,838.70 3,46,072

Aug-09 1,86,48,790 90,292.29 4,514.61 4,82,549

Sep-09 2,26,36,371 109,665.81 5,771.88 4,13,206

Oct-09 3,28,49,655 153,629.82 7,681.49 4,74,485

Nov-09 3,46,66,197 161,641.09 8,082.05 5,02,301

Dec-09 4,25,13,360 198,497.62 9,452.27 4,25,451

Jan-10 6,35,91,431 292,344.89 14,617.24 5,95,355

Feb-10 6,47,73,311 322,635.46 16,980.81 5,37,524

Mar-10 7,64,99,457 363,344.81 18,167.24 4,23,314

Apr-10 8,16,07,363 373,371.63 19,651.14 5,54,539

May-10 8,97,51,764 423,075.05 21,153.75 5,57,883

June-10 8,88,14,522 425,087.62 19,322.16 8,32,531

2008-09 (Aug-Mar) 2,98,47,569 148,825.98

2009-10 (Apr-Mar 40,81,66,278 1,944,654.11

2010-11 (Apr-June) 26,01,73,64 1,221,534.30

# Data across all underlying

MEMBERSHIP

Membership on MCX Stock Exchange Ltd. is of three types:

Trading Members (TM): Can trade on their own account and also their clients, but cannot clear the trades. They have to clear the trades through a clearing member by becoming its constituent. Trading-cum-Clearing Members (TCM): Can trade and clear the trades on their own account and also on account of their clients.

Professional Clearing Members (PCM): Can only clear the trades of other members. Cannot trade either on their own account or clients.

The Exchange had 672 members registered with SEBI as on June 30, 2010.

TECHNOLOGY

The IT infrastructure at the Exchange has been designed with performance, reliability, redundancy and security as the key parameters.

The technology deployed includes the latest fault tolerant servers and a hybrid network (nationwide satellite network, terrestrial point to point, nationwide MPLS network and Internet links) which enables members to connect to the Exchange from any location across the length and breadth of the country. The IT components are hosted in a state of the art datacenter that is designed to support mission critical operations. The datacenter and all its components are monitored 24x7x365.

The global technology platform enables our members to undertake uninterrupted dealing even during sun outage time experienced by other exchanges.

TRADING APPLICATION

Financial Information Exchange ("FIX") Protocol: MCX-SX was the first Stock Exchange to provide this facility in India w.e.f February 5, 2009.

The Financial Information exchange ("FIX") Protocol is a series of messaging specifications for the electronic communication of trade-related messages. FIX is a specification around which software developers can create commercial or open-source software.

MCX-SX supports trading using CTCL/IBT solutions (through FIX Gateway) developed using FIX API provided by the exchange. Exchange supports version 4.2 of the FIX protocol.

CERTIFICATIONS

1. ISO 9001:2008 -- The ISO 9001 standard addresses continual improvement in the performance of the organization. It emphasizes on enhancing Customer satisfaction and strengthening processes that would provide measurable results.

2. ISO/ IEC 27001:2005 - The ISO 27001 assists an organization in defining its Information Security management Systems (ISMS).The Standard provides guidelines to set up adequate and proportionate security controls, which protect Information assets of the organization, and give confidence to interested parties.

3. ISO 14001:2004 - “The ISO 14001 standard addresses “Environmental management “. It defines steps taken by the organization to minimize harmful effects on the environment, caused by its activities, and to achieve continual improvement of its environmental performance.

NEW INITIATIVES

The stock exchange has taken various pioneering initiatives to spread knowledge and awareness about the financial markets and to encourage participation by making processes simpler, more efficient and access to price information easier. Some of the key initiatives taken by the exchange are:

- Enabling price information of currency futures via SMS

- Reducing the gap of collections of mark-to-market (M2M) margins to the same day

- Deployment of superior technology for continued operation during sun outage

- Joining hands with various partners for Financial Literacy for Financial Inclusion

- Releasing the 1st handbook and CD on currency futures and interest rate futures

THE WAY FORWARD

The Exchange is committed to continuously expand its menu of offerings by introducing trading in new asset classes under the extant regulatory framework. To begin with, the Exchange will introduce trades in Equity, Debt, Interest Rates, Index and Exchange Traded Funds, subject to regulatory approvals. After achieving compliance with the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 through the scheme of reduction cum arrangement as explained subsequently, the Exchange had applied to SEBI for such regulatory approvals. In view of there being no further progress in the matter, the Exchange has filed a writ petition in the Hon'ble High Court of Bombay seeking a direction to SEBI to grant the regulatory approvals.

The introduction of all the stated assets and their variants would be done with best research and education, product innovation and enhanced dissemination of financial literacy for financial inclusion.

3. Dividend and Reserves

In view of the fact that the Company is in its nascent stage of operations and is currently incurring losses, the Board of Directors do not recommended any dividend on the equity capital of the Company. For the same reason, no amounts are available for carrying to reserves.

4. Share Capital

The Authorised Share Capital of the Company is Rs. 250,00,00,000/- divided into 250,00,00,000 equity shares of Re. 1/- each. The Paid up Capital of the Company is Rs. 54,33,03,000/- divided into 54,33,03,000 equity shares of Re. 1/- each. The shareholding pattern is under:

Sr. No. of shares Percentage of Category of Shareholder No. held shareholding

1. Promoters 5,43,30,000 10.00%

2. Banks 38,45,00,000 70.77%

3. Financial Institutions 9,90,40,000 18.23%

4. MCX Stock Exchange ESOP Trust 54,33,000 1.00%

Total 54,33,03,000 100.00%

In order to comply with the shareholding restrictions laid down in Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the “MIMPS Regulations”), the Company had, with the unanimous approval of its Board and shareholders and after sanction of the Hon'ble High Court of Bombay, implemented a Scheme of Reduction cum Arrangement under Sections 100-104 and 391-393 of the Companies Act, 1956, whereby the shares held by shareholders in excess of the permissible limits were cancelled and extinguished and warrants were issued to the said shareholders.

Consequent upon implementation of the Scheme, the total shareholding of banks increased to 89% and that of Financial Technologies (India) Ltd. and Multi Commodity Exchange of India Ltd. got reduced to 5% each with the ESOP Trust holding 1%. In all 119,66,30,000 shares were reduced and cancelled. There was no cash outflow from the Company under the Scheme and the reducing shareholders were allotted an equivalent number of warrants (119,66,30,000 warrants) in terms of the Scheme.

5. Directors

Pursuant to approval of its shareholders, the Company had, during the Financial Year 2009-10, amended its Articles of Association to increase the strength of its Board of Directors from 12 to 18 to include representation from a larger number of stakeholders and persons representing public interest, after obtaining requisite approvals from the Securities and Exchange Board of India (SEBI) and the Central Government.

In view of implementation of the Scheme of Reduction cum Arrangement, it was decided to provide Directorships on rotational basis to Banks and Financial Institutions who were holding equity shareholdings in the Company, in order to benefit from their experience in financial market for period of one year each.

Mr. P. G. Kakodkar resigned from the Board w.e.f December 19, 2009. The Board appointed Mr. Atul Rai, CEO & MD of IFCI Ltd. as a Director in the casual vacancy caused upon the resignation as per Section 262 of the Companies Act, 1956.

Dr. S. A. Dave and Mr. S. Rajendran had tendered their resignations and ceased to be Directors of the Company from March 31, 2010 and June 22, 2010 respectively.

In pursuance of Section 260 of the Companies Act, 1956, Mr. C. VR. Rajendran (representing Corporation Bank), Mr. A. A. Badshah (representing Bank of India) and Mr. Shahzaad Dalal (representing IL&FS Financial Services Ltd.) were appointed as Additional Directors of the Company by the Board on April 30, 2010. Mr. P. K. Chhokra ( representing Punjab National Bank) and Mr. V.K. Khanna (representing Union Bank of India) was appointed as Additional Directors of the Company by the Board on June 23, 2010, in replacement of Mr. S. Rajendran (who earlier represented Union Bank of India), as desired by the Bank. All of them will cease to hold office at the Second Annual General Meeting of the Company and are eligible for appointment as Directors. It is proposed that they may be appointed as Directors for a period of one year till the next Annual General Meeting, as they could not complete their full year due to their recent appointments.

The Company has received notices in writing from Members under Section 257 of the Companies Act, 1956 proposing their candidature for the office of Directors of the Company. Your Directors recommend their appointment as Directors of the Company, for a period of one year. Upon their ceasing to hold office at the end of one year, directorships shall be offered to other shareholders in accordance with the policy of rotation.

Mr. Vepa Kamesam and Mr. V. Hariharan are liable to retire by rotation at the ensuing Annual General Meeting. Being eligible, Mr. Vepa Kamesam and Mr. V. Hariharan offer themselves for re-appointment.

6. Management

The management of the Company is headed by Mr. Joseph Massey, Managing Director & CEO, who is in overall charge of the affairs of the Company, subject to the superintendence and oversight of the Board of Directors. The Currency Derivatives Segment, which is the currently operational segment of the Exchange, is headed by Mr. U. Venkataraman, CEO-CD Segment & Whole-time Director, who reports to the Managing Director. There is a team of highly experienced and effective senior management leading the different Departments of the Exchange, which reports to the Managing Director and the Whole-time Director.

7. Human Resources

During the period under review, emphasis was placed to Human Resource Planning with the objective of optimum utilization of existing manpower. The total strength of employees of the Company as on March 31, 2010 was 164.

8. Subsidiary

The Company's subsidiary, MCX-SX Clearing Corporation Limited (MCX-SXCCL), was jointly promoted by your Company, Multi-Commodity Exchange of India Ltd. (MCX) and Financial Technologies India Ltd. (FTIL), as a new age Clearing Corporation constituted to undertake clearing and settlement of deals in multi asset classes. The Company offers best-in-class services to its clearing members with the help of its state of the art risk management framework and unparalleled clearing and settlement systems with dedicated linkages with clearing partners.

The subsidiary was incorporated on November 7, 2008 and was permitted by SEBI to undertake clearing and settlement functions of trades done in MCX-SX on January 2, 2009. The subsidiary commenced its operations on February 16, 2009 after completion of requisite formalities including opening of accounts and execution of agreements with participants. The subsidiary currently clears the deals entered in the Currency Derivatives Segment of MCX-SX.

During the financial year 2009-10, the Company has registered the total income of Rs. 12,05,75,406/- as against Rs. 1,58,26,458/- for the previous year. The Profit after tax for the year under review was Rs. 1,13,90,067/- as compared to Rs. 14,42,659/- for the previous year.

During the financial year, the Clearing Corporation had successfully carried out 240 settlements amounting to Rs. 937.53 Crores without any delay and shortages. On account of its robust risk management practices, SGF has never been put to use. Some other highlights during the year are:-

a) MCX-SX CCL was rated LAAA (SO) by ICRA, indicating the highest level of safety of collaterals parked with the Clearing Corporation.

b) MCX-SX CCL became the first Indian Clearing Corporation to obtain ISO certifications for quality management system (ISO 9001-2008) and information security management system (ISO 27001-2005) in its first year of operations.

c) MCX-SX was the first in India to start collection of MTM pay-in prior to start of next day trading in the currency derivatives market, which is being implemented by MCX-SX CCL since the transfer of clearing and settlement functions to it.

d) With effect from February 01, 2010, MCX-SX CCL started clearing and settlement services on the three newly introduced currency pairs viz, EUR-INR, GBP-INR and JPY- INR, after putting in place all requisite changes in the systems.

e) MCX-SX CCL had initiated an innovative method called BGS (Bank Gateway System) for accepting cash collateral from the clearing members through the clearing banks.

9. Compliances

The Company is recognized as a stock exchange by Securities and Exchange Board of India under section 4 of the Securities Contracts (Regulation) Act, 1956 (SCRA). The Company being a stock exchange adheres to SEBI Act, 1992 and SCRA, 1956 and also the various circulars as prescribed by the SEBI and Reserve Bank of India from time to time.

10. Deposits

The Company has not accepted any Public deposits during the Financial Year ended March 31, 2010.

11. Auditors

Consequent upon implementation of the scheme of reduction cum arrangement, as mentioned above, the shareholding pattern of the Company had undergone a change whereby about 67% of the company's equity capital is now held by public sector banks.

Consequently, the provisions of section 619B of the Companies Act, 1956 have been attracted to the Company, whereby the auditors of the Company for the current financial year would have to be appointed by the Comptroller and Auditor General of India (CAG).

The Exchange is shortly writing to CAG for appointing an auditor under section 619B read with 619 of the Companies Act, 1956.

12. Composition of Audit Committee

As per Section 292A of the Companies Act, 1956, the Company has constituted an Audit Committee of the Board, comprising of three directors of which two are independent, non- executive directors. The composition of the Audit Committee is as follows:

1. Mr. C.M. Maniar - Chairman

2. Mr. B. D. Sumitra - Member

3. Mr. Joseph Massey - Member

The Audit Committee met four times during the Financial Year 2009-10 to transact business.

13. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In view of the nature of activities which are being carried out on by the Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, concerning conservation of energy, technology absorption and foreign exchange earnings outgo, respectively, are not applicable to the Company.

The Company does not directly contribute to export growth, as it is not allowed to export its services. However, The Company provides a platform to the small and medium enterprises (SMEs) and resident Indians, who hitherto did not have easy access to the currency market and takes the necessary initiative to educate these potential users on the benefits of risk management using currency futures through seminars and events. By providing a hedging mechanism, it indirectly encourages exports. The Company has tied up with the Federation of

Indian Export Organisations (FIEO) for creating awareness amongst its members for risk management of volatility in foreign currency.

There were no foreign exchange earnings during the period ended March 31, 2010. The foreign exchange outgo during the period ended March 31, 2010 cumulatively amounted to Rs. 2,978,895/- as compared to Rs. 694,801/- in the period ended March 31, 2009.

14. Particulars Of Employees

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors' Report for the period ended March 31, 2010, is given in Annexure A to this Report.

15. Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:-

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

iii. they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv. they have prepared the annual accounts on a going concern basis.

16. Buy-Back Of Shares

As during the last financial year, your Company did not have any scheme of buyback of shares, the requirements specified in section 217(2B) read with section 77A of the Companies Act, 1956 are not applicable to the Company.

17. Employees Stock Option Plan

The Company had formulated the 'MCX Stock Exchange Employee Stock Option Scheme, 2009', pursuant to the authorization of shareholders granted at the First Annual General Meeting of the Company, and in order to attract, encourage, motivate and retain talent in the Company. The MCX Stock Exchange ESOP Trust has begun the process of granting options to eligible employees under the scheme.

The requisite disclosures in terms of Clause 12 and other provisions of the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 are given in Annexure B to this Report.

18. ACKNOWLEDGEMENTS

The Directors would like to place on record their gratitude for the valuable guidance and support received from the Government of India, particularly Ministry of Finance and Ministry of Corporate Affairs, Securities and Exchange Board of India, Reserve Bank of India, participating banks, clearing banks, NSDL, CDSL, FEDAI, FIMMDA, FIEO, CII, FICCI, ASSOCHAM, IMC, IOSCO, SAFE, IGIDR, ICRIER, WFE, FIA and various other international, national and regional chambers of commerce, trade associations and all other broker-members, vendors, technology partners and all other business associates for the continuous support given by them to the Company.

The Directors also wish to convey their appreciation to the Company's employees for their enormous personal efforts as well as their collective contribution which enabled the Company to meet the challenges set before it, including the fierce competition in the sector. The Board also acknowledged the contributions of the agencies, such as FTKMC, ICAI, ICSI, ICWAI, Door Darshan, Delhi University etc., who have inked Memoranda of Understanding with the Company to work towards the goal of “Financial Literacy and Financial Inclusion”.

On behalf of the Board of Directors

Ashok Jha Chairman

Mumbai, July 17, 2010

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Mar 31, 2009

TO THE MEMBERS OF MCX STOCK EXCHANGE LIMITED

The Directors have pleasure in presenting their First Annual Report and the Audited Statement of Accounts and Auditors' Report for the period commencing from August 14, 2008 to March 31, 2009.

1. FINANCIAL RESULTS

(Rs. in crores) Period ended March 31, 2009

Total Income 7.58

Less: Expenditure 37.33

Loss Before Tax 29.75

Less: Provision For Tax 0.12

Loss After Tax carried to Balance Sheet (29.87)

As these are the first financial results of the Company, prior year comparatives have not been given.

2. CORPORATE AND BUSINESS BACKGROUND

The Company was incorporated on August 14, 2008 and recognized as a stock exchange by Securities and Exchange Board of India (SEBI) under section 4 of the Securities Contracts (Regulation) Act, 1956 with effect from September 16, 2008. The Exchange was promoted by Multi Commodity Exchange of India Limited (MCX) and Financial Technologies (India) Ltd. (FTIL). The Exchange currently has approval to operate its Currency Derivatives Segment and presently USD-INR contracts of 1-12 months maturity are being traded on the Segment, in terms of the regulatory structure laid down by SEBI and Reserve Bank of India (RBI). The Exchange also holds necessary authorization from RBI under section 10 of the Foreign Exchange Management Act, 1999. The Exchange intends to commence further Segments upon receiving requisite approval from SEBI.

The Exchange through its Currency Derivatives Segment (CD Segment) provides a platform to the banks, corporates, importers, exporters, small and medium enterprises (SMEs) and resident Indians to hedge their currency risk. The Exchange has taken and would continue to take pioneering initiatives to educate investors and potential users on the benefits and risks of trading in currency futures through various seminars and events organized across the length and breadth of our country. The results are seen in the increase of volumes in trading on the CD Segment. The daily average turnover has increased from Rs. 324.78 crores in the first month of its operations to Rs. 2923.46 crores in May 2009.

Your Directors are pleased to inform that the National Institute of Securities Market (NISM), a public trust promoted by SEBI has appointed the Exchange as Test Administrator for its Certification Programme.

3. DIVIDEND AND RESERVES

In view of the fact that the Company is in its nascent stage of operations and is currently incurring losses, the Board of Directors has not recommended any dividend on the equity capital of the Company. For the same reason, no amounts are available for carrying to reserves.

4. OPERATIONS AND OUTLOOK

During the Financial Year 2008-09, the Company had a total income of Rs. 7.58 crores and incurred a net loss after tax of Rs. 29.87 crores. The primary reason for this is the Exchange's inability to charge transaction fee (which is the main revenue stream for any stock exchange operating this Segment) on account of the predatory pricing practices adopted by the competitors. The magnitude of loss can also be attributed in part to the initial cost of set-up of the Exchange and due to expenditure involved in creating awareness of MCX Stock Exchange and the Currency Derivatives Segment. The Exchange has granted waiver of transaction fee in the Currency Derivatives Segment to match the pricing of the competitor and maintain the existing market share. This waiver was introduced and was extended from time to time in line with the actions of competitors. The Company is expected to perform better in the next year with additional segments.

The exchange traded currency derivatives market is at a nascent stage in India, which has rapidly picked up in terms of volumes. This can be attributed in part at least to the various initiatives of the Exchange to spread awareness and expand the reach across geographical regions of the country.

The RBI-SEBI Standing Technical Committee has recently proposed introduction of interest rate futures contracts on the CD Segment of stock exchanges. The Exchange has taken the necessary initiative and indicated to SEBI its preparedness for introducing the new product for trading on its platform. Though interest rate futures contracts have already been in vougue in another Exchange in India for six years now, the product has not taken off due to various factors. This situation is likely to change in light of the revised framework proposed by RBI and SEBI. Upon approval of SEBI to introduce the product, the Exchange would continue its usual initiatives to spread awareness and education about the new product also and nurture a market therefor.

5. SHARE CAPITAL

The Company was promoted as a 51% subsidiary of MCX with FTIL holding 49%. The Authorised Share Capital of the Company was increased from time to time to meet the growing needs of the Exchange. The Company was incorporated with a paid-up Share Capital of Rs. 10 lakhs. The outstanding equity shares of the Company of Rs. 10/- each were subdivided into corresponding number of equity shares of Re.1/- each on September 20, 2008.

As at March 31, 2009, the paid-up Share Capital of the Company was Rs. 135,00,00,000 divided into 135,00,00,000 Equity Shares of Re.1/- each. Subsequent to the balance sheet date, 2.5 crore shares and 6.25 crore shares respectively have been allotted to two banks. The Exchange is taking further steps to broad base its shareholding.

6. DIRECTORS

The Company at its Extraordinary General Meeting held on August 14, 2008 appointed Mr. Joseph Massey, Mr. V. Hariharan and Mr. P.G. Kakodkar as the first directors of the Company. One of them shall retire by rotation at the first AGM of the Company in terms of section 255 of the Companies Act, 1956. On a drawal of lots it has been decided that Mr. P.G. Kakodkar would retire by rotation at the first AGM. Being eligible, he offers himself for re-appointment.

In pursuance of Section 260 of the Companies Act, 1956, Mr. Jignesh Shah, Mr. Vepa Kamesam, Mr. B. D. Sumitra, Mr. S. S. Thakur and Mr. C.M. Maniar were appointed as Additional Directors on the Board of the Company, w.e.f., October 6, 2008. Mr. U. Venkataraman had joined as an Additional Director and Whole-time Director w.e.f., February 16, 2009. Mr. Ashok Jha, Dr. S.A. Dave and Dr. Nitish Sengupta were appointed as Additional Directors of the Company by the Board on June 26, 2009. All of them shall cease to hold office at the First Annual General Meeting of the Company and are eligible for appointment as Directors.

The Company has received notices in writing from Members under Section 257 of the Companies Act, 1956 proposing their candidature for the office of Directors of the Company. Your Directors recommend their appointment as Directors of the Company.

7. MANAGEMENT

The key managerial personnel of the Company are Mr. Joseph Massey, Managing Director & CEO and Mr. U. Venkataraman, CEO-Currency Derivatives Segment & Whole-time Director. Previously Mr. Massey held top positions at Multi Commodity Exchange of India (MCX), Interconnected Stock Exchange of India (ISE) and Vadodara Stock Exchange (VSE). His expertise greatly helps the new exchange to establish itself in the fiercely competitive environment. He also has good international exposure also in the exchange sphere and had officially visited all prominent overseas exchanges including New York Stock Exchange, NASDAQ, New York Mercantile Exchange, London Stock Exchange, London Metal Exchange and Singapore Stock Exchange. Mr. Venkataraman prior to joining the Exchange as its CEO- CD Segment, was the Head-Treasury, IDBI Bank Ltd., where he was in overall charge of treasury operations of the Bank. He represented the Bank as a Member in the Managing Committee of FEDAI and in FIMMDA. Mr. Venkataraman had travelled widely and is a veteran in the fields of money markets and forex markets.

8. HUMAN RESOURCES

During the period under review, emphasis was given to Human Resource Planning with the objective of optimum utilization of existing manpower. The total strength of employees of the Exchange as on March 31, 2009 was 115 and as on date is 141.

9. SUBSIDIARY COMPANY

MCX-SX Clearing Corporation Ltd. (MCX-SX CCL), is the Company's sole subsidiary. The Company holds 51% equity stake in the subsidiary with the balance being held by Multi Commodity Exchange of India Limited (26%) and Financial Technologies (India) Limited (23%). The Subsidiary was set up to operate as an independent clearing corporation as envisaged in section 8A of the Securities Contracts (Regulation) Act, 1956 and the Report of the RBI-SEBI Standing Technical Committee on Exchange Traded Currency Futures.

MCX-SX CCL presently functions as an independent clearing corporation for clearing and settling the trades taking place in the Currency Derivatives Segment of MCX Stock Exchange Ltd., as required by SEBI. It acts as a central counterparty to such trades and provides full novation in respect of such trades. The Company has been authorized by SEBI and RBI to undertake the clearing and settlement functions in respect of trades done on Currency Futures Segment of MCX-SX. The Company commenced its operations on February 16, 2009. The documents as specified in Section 212 of the Companies Act, 1956 are attached in respect of the subsidiary.

10. COMPLIANCES

The Company is recognized as a stock exchange by Securities and Exchange Board of India under section 4 of the Securities Contracts (Regulation) Act, 1956 (SCRA). The Company being a stock exchange adheres to SEBI Act, 1992 and SCRA, 1956 and also the various circulars as prescribed by the SEBI and Reserve Bank of India from time to time.

11. DEPOSITS

The Company has not accepted any Public deposits during the Financial Year ended March 31, 2009.

12. AUDITORS

At the extra-ordinary general meeting of the Company held on May 21, 2009, the Company appointed M/s B S R and Company, Chartered Accountants, Mumbai, as the auditors of the Company in place of M/s Mukesh P. Shah & Co., Chartered Accountants.

M/s B S R and Company, Chartered Accountants have confirmed that their appointment will be within the limits as prescribed under section 224(1B) of the Companies Act, 1956. The Directors recommend that they may be re-appointed as auditors of the Company for the second financial year also.

If appointed, M/s B S R and Company, Chartered Accountants shall hold office till the conclusion of the second Annual General Meeting of the Company.

13. COMPOSITION OF AUDIT COMMITTEE

As per Section 292A of the Companies Act, 1956, the Company has constituted an Audit Committee of the Board, comprising of three directors of which two are independent, non- executive directors. The composition of the Audit Committee is as follows:

1. Mr. P.G. Kakodkar - Chairman

2. Mr. C.M. Maniar - Member

3. Mr. Joseph Massey - Member

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of activities which are being carried out on by the Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, concerning conservation of energy, technology absorption and foreign exchange earnings outgo, respectively, are not applicable to the Company.

The Exchange does not directly contribute to export growth, as it is not allowed to export its services. However, MCX-SX provides a platform to the small and medium enterprises (SMEs) and resident Indians, who hitherto did not have easy access to the currency market and takes the necessary initiative to educate these potential users on the benefits and risks of trading in currency futures through seminars and events. By providing a hedging mechanism, it indirectly encourages exports.

There were no foreign exchange earnings during the period ended March 31, 2009. The foreign exchange outgo during the period ended March 31, 2009 cumulatively amounted to Rs. 6.95 lakhs.

15. PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors' Report for the period ended March 31, 2009, is given as an Annexure to this Report.

16. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:-

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period; they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iii. they have prepared the annual accounts on a going concern basis.

17. BUY-BACK OF SHARES

As during the last financial year, your Company did not have any scheme of buyback of shares, the requirements specified in section 217(2B) read with section 77A of the Companies Act, 1956 are not applicable to the Company.

18. EMPLOYEES STOCK OPTION PLAN

In order to attract, develop, retain and reward talented workforce, your Directors propose to institute a Employee Stock Option Plan (ESOP) Scheme, whereby employees of the Company including its executive and non-executive Directors and Directors and employees of any subsidiary of the Company would be granted options, which may be exercised on a later date to acquire the Company's shares at a pre-determined price. As a matter of best practice and good governance, the Company proposes to follow the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended and as applicable to a listed company. The Scheme would be administered by the Compensation Committee of the Board of Director, which consists of a majority of independent directors through a trust to be formed for the purpose. The proposal is placed for approval of shareholders at the first Annual General Meeting of the Company.

19. ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the Company's employees for their enormous personal efforts as well as their collective contribution which enabled the Company to meet the challenges set before it, including the fierce competition in the sector. The Directors would also like to place on record their gratitude for the valuable guidance and support received from the Government of India, Securities and Exchange Board of India, Reserve Bank of India, participating banks, clearing banks, NSDL, CDSL, FEDAI, FIMMDA, FIEO, various chambers of commerce, trade associations and all other broker-members, vendors and all other business associates for the continuous support given by them to the Company and their confidence in its Management.

On behalf of the Board of Directors

Joseph Massey

Managing Director & CEO

U. Venkataraman

CEO-CD Segment & Whole-time

Director

Mumbai, June 26, 2009