Annual Report: 2023
The following is a comprehensive summary of the annual report for 2022-23 for the Indian Commodity Exchange Limited ("ICEX"), meticulously capturing all crucial information, key arguments, supporting data, methodologies, findings, conclusions, and actionable insights presented throughout the document:
Corporate Overview
ICEX, a recognized Commodity Exchange regulated by SEBI, operated with a demutualized structure, offering online trading, clearing, and settlement. The exchange suspended trading operations in Commodity Segment and Mutual Fund transactions from April 01, 2022, and April 14, 2022, respectively. SEBI withdrew the permanent recognition granted to ICEX, effective May 18, 2022, but the Securities Appellate Tribunal (SAT) set aside this order, allowing the exchange a year for revival. ICEX requested allowing new investors up to 51% stake in the equity shares to raise funds but Regulator did not acceded to this request. Ultimately, the Board approved Voluntary surrender of recognition to the Regulator to discontinue commodity derivatives business, with an EOGM approving this in May 2023. Management will consider other businesses appropriate for the exchange’s limited funds.
Financial Performance (2022-23)
The Exchange reported a challenging financial year. The operating income decreased to ₹0.25 Crore from ₹1.22 Crore in F.Y. 2021-22, while other income increased to ₹15.83 Crore (from ₹0.85 Crore). The net loss before tax was ₹58.27 Crore, compared to a loss of ₹21.73 Crore in the previous year. The net worth (including Exchange's initial Settlement Guarantee Fund contribution) as at March 31, 2023, stood at ₹23.36 Crore. No dividend is recommended.
Share Capital
The authorized share capital of ICEX is ₹368,00,00,000/- divided into 73,60,00,000 Equity shares of ₹5/- each. The issued, subscribed, and paid-up share capital is ₹266,75,37,380/- divided into 53,35,07,476 Equity shares of ₹5/- each fully paid up.
Investor Protection Fund
The ICEX Investor Protection Fund Trust (ICEX - IPF) aims to protect investors' interests by meeting legitimate claims arising from member defaults. The fund stood at ₹15,04,81,569/- as of March 31, 2023.
Governance and Directors
The board comprised independent and shareholder directors, including: Mr. Sushil Kumar Agrawal (Independent Director), Ms. Vaishali Kale and Mr. Suresh Babu Konakanchi (Shareholder Directors) and Mr. Ranjit Kumar Samantaray (Whole time director.) Several changes in composition occurred during the year due to resignations and appointments. The Board met eight times during the financial year.
The report includes details of directors seeking re-appointment, along with their qualifications and relationships. This section highlights Ms. Vaishali Kale, Mr. Shantanu Walke, and Mr. Gopala Ramaratnam.
The company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.
Key Managerial Personnel (KMP)
The KMP include: Mr. Ranjit Kumar Samantaray (Whole time director), Mr. Narayanaswamy Iyer (Chief financial officer), Ms. Poonam Chhikara (Company Secretary).
Committee Structure
The report details the composition and meetings of the Audit Committee, Nomination and Remuneration Committee, and Stakeholders Relationship Committee, including attendance details.
Related Party Transactions
No materially significant related party transactions occurred.
Corporate Social Responsibility (CSR)
Due to the exchange's net-worth and profitability not meeting certain thresholds, provisions of the Companies Act, 2013 regarding the constitution of a Corporate Social Responsibility Committee are not applicable.
Board Evaluation
The Board conducted an annual performance evaluation of its performance and individual directors. The criteria for evaluation included Qualification, Experience, Knowledge, Competency, etc.
Risk Management
A well-defined risk management framework is in place, with a Risk Management Committee authorized to monitor and review risk management plans.
Vigil Mechanism
The Company's Whistle Blower Policy enables stakeholders to report genuine concerns and provides safeguards against victimization.
Auditors
M/s. Chaturvedi and Shah LLP, Chartered Accountants, served as statutory auditors for FY 2018-19 to FY 2022-23. M/s A.R. Sodha & Co. Chartered Accountants have been recommended the appointment of statutory auditors of the company from financial year 2023 to 2028.
Material Changes & Commitments
No material changes or commitments occurred affecting the financial position of the exchange.
Energy Conservation
The company strives to optimize energy usage through initiatives like using LED lighting and installing HVAC Central Controller systems.
Significant and Material Orders Passed by Regulators
SAT passed an order June 13, 2022, allowing a year to ICEX to revive, but ultimately the board approved voluntary surrender of recognition.
Corporate Governance Report A Practicing Company Secretary's certificate is appended, confirming status of compliances.
Directors Responsibility Statement
The Directors confirmed adherence to accounting standards, proper accounting policies, sufficient care for maintenance of adequate records, preparation of accounts on a going concern basis, and adequate internal financial controls.
Annexures
Audit Reports
This comprehensive summary covers the annual report's key aspects, providing a detailed overview of ICEX's performance, governance, and financial standing in FY 2022-23.
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