National Commodity & Derivatives Exchange Shares Annual Reports

National Commodity & Derivatives Exchange Shares

The NCDEX (National Commodity & Derivatives Exchange Limited) Annual Report 2022-23 highlights the performance and activities of the exchange, focusing on building an inclusive commodity ecosystem. **Corporate Overview:** * **Financial Performance:** The report presents both standalone and consolidated financial results for FY 2022-23. The Exchange's standalone total income decreased by 39% to ₹4,884 Lakhs, while total expenses increased by 4% to ₹10,302 Lakhs. The NCDEX Group's consolidated total income decreased by 12% to ₹13,557 Lakhs, and total expenses increased by 11% to ₹19,624 Lakhs. The average daily traded value (ADTV) decreased to ₹834 Crores, and profit/loss after tax resulted in a loss of ₹4,445 Lakhs standalone and a loss of ₹4,237 Lakhs consolidated. * **Commodity Derivatives:** NCDEX maintained its leadership in the Agri derivatives ecosystem, increasing its share in Agri commodity derivatives to 97% from 86% in the last financial year. The exchange has a 6% increase in average daily open interest (ADOI) from ₹1,947 Crores to ₹2,069 Crores. * **Commodity Trading Statistics:** The Exchange offered trading in 23 agricultural commodities and 1 non-agri commodity with 6 options in agricultural commodities as of March 31, 2023. The top five traded commodities were Guar Seed, Guar Gum, Cotton Cake, Jeera, and Castor Seed. * **Membership:** NCDEX had 309 members, 3,611 terminals, and a client base of 5,368,028 million. * **FPO Engagement:** NCDEX onboarded 95 new Farmer Producer Organizations (FPOs), bringing the total to 500 FPOs from 16 states, representing over 10,67,700 farmers. 39 FPOs from seven states hedged eight commodities with a cumulative volume of 13,114 metric tons. 15 FPOs made delivery in five commodities for a volume of 1,295 MT. 166 FPOs have traded in 18 commodities and hedged about 1,19,690 Lakh tons of their produce since 2016. * **Physical Settlement:** NCDEX facilitated physical settlement for BIS grade Steel and had flawless physical settlements of contracts with no delivery concerns in the last financial year. * **Innovation and Product Offerings:** The exchange forayed into non-Agri space by launching Steel Futures and focused on developing products like Isabgol, Groundnut, Rubber, and Carbon Credits. **MD & CEO's Message:** * The message emphasizes the commitment to innovation, exploring new avenues, and leveraging emerging technologies to redefine commodity trading. Despite challenges like contract suspensions and global uncertainties, NCDEX focused on empowering farmers, strengthening industry connections, and advocating for commodity derivatives. **Strategic Initiatives & Updates:** * **Policy Advocacy:** NCDEX engaged with relevant ministries, creating awareness and connecting with stakeholders through research-backed and value-added engagements. * **Farmer Empowerment:** The exchange worked with agriculture universities, financial institutions, and government departments to connect with 1,300 new FPOs, marking a milestone by connecting 500+ FPOs to commodity derivatives. NCDEX is exploring opportunities to manage e-commodity price risk using put options supported by SEBI. * **Technology Updates:** The trading system uptime was 100%. BCP/DR capabilities were strengthened to restore operations from the Disaster Recovery site within 35 minutes. * **Digitization:** Introduced NEST, a user-friendly application for investor grievances, and a digitized process for member documentation. * **Awards and Recognition:** Won several awards for technology innovation and HR excellence. **Subsidiaries and Associate Companies:** * **NCDEX e Markets Limited (NeML):** NeML is engaged with State and Central Government organizations for procurement and disposal remits, and NeML has also identified ESG as a key driver of its growth for the future. * **National Commodity Clearing Limited (NCCL):** A summary of trading, settlement and collaterals processed during the FY 2022-23 is given. * **NCDEX Institute of Commodity Markets and Research (NICR):** NICR realigned its focus on Consultancy, Research, and Education & Awareness. * **Rashtriya e Market Services Private Limited ('ReMS'):** ReMS has progressively introduced its UMP in 162 regulated markets in the State of Karnataka for competitive price discovery of the produce brought by farmers in to markets. * **Power Exchange India Limited ('PXIL'):** PXIL is one of the three power exchanges operating in the country and total market share of PXIL was 9.38%. **Corporate Governance and Compliance:** * The report includes details on the Board of Directors, Board Committees, meetings held, and compliance with various regulations (Companies Act, SECC Regulations, Listing Regulations). * **Auditors:** Khandelwal Jain & Co. were appointed as Statutory Auditors, and Makarand M. Joshi & Co. served as Secretarial Auditor. Compliance with Secretarial Standards was maintained. * The Exchange has in place a Nomination and Remuneration Policy. The policy deals with matters like Directors' appointment and their remuneration, criteria for determining qualifications, positive attributes and independence of director, remuneration of Key Managerial Personnel and other employees. * The Authorized Share Capital of the Exchange is ₹70,00,00,000, comprising: 7,00,00,000 equity shares of ₹10/- each. The Issued, Subscribed and Paid-up Capital. **Financial Statements Analysis:** * A detailed breakdown of the Standalone Balance Sheet and Statement of Profit and Loss for FY 2022-23 is provided with comparative figures from FY 2021-22. This summary provides a comprehensive overview of NCDEX's performance, strategies, and future outlook, highlighting its role in promoting commodity derivatives and empowering stakeholders within the Indian agricultural ecosystem.

National Commodity & Derivatives Exchange Shares

Here's a comprehensive summary of the PDF document: **Overview** The document is the Annual Report for FY2021-22 of the National Commodity & Derivatives Exchange Limited (NCDEX), highlighting performance, key initiatives, and corporate governance aspects. NCDEX positions itself as an integral part of the Agri ecosystem, aiming to develop market-driven tools. **MD & CEO's Message** The MD & CEO's message emphasizes the relevance of commodity derivatives in the backdrop of post-pandemic demand shocks, supply bottlenecks, and rising energy costs. The message states that despite temporary suspensions of some top-traded contracts (Chana, Mustard Seed, Soybean, Refined Soybean Oil and Wheat), the exchange maintained its leadership in agricultural derivatives. * The Average Daily Turnover Value (ADTV) increased by 47% to ₹1,857 Crores, exceeding pre-pandemic levels. NCDEX maintained its leadership position in the agricultural derivatives segment with an 80% market share. The MD & CEO further acknowledges government efforts to double farmers income and NCDEX's role in complimenting those efforts. As such, the Exchange is linking over 400 Farmer Producer Organizations (FPOs) with over one million farmers. NCDEX also highlights technological upgrades like migrating its live trade data centre to a Tier-IV facility. The message expresses hope for the revocation of commodity suspensions and increased government participation in price risk management. **FPO Highlights for FY 2021-22** * The Exchange engaged with 89 promoting and resource institutions. * Over 1 million farmers are members of FPOs supported by these institutions. * NCDEX noted participation from 150 FPOs from 14 states. * 420,995 Farmers represented on NCDEX platform. * 255 FPOs have opened accounts but are yet to trade. * 1,06,576 MT of commodities traded across 18 commodities. * 12,282 deliveries based trades. **Company Information** The report lists the Board of Directors, Chief Financial Officer, Company Secretary, Statutory Auditor, Secretarial Auditor, Bankers, Registered Office, Branch Offices, and Registrar and Share Transfer Agents. Key personnel include Mr. Ashish Bahuguna (Chairman), Mr. Arun Raste (MD & CEO), and Mr. Atul Roongta (CFO). **Directors' Report** * **Performance:** The total income of the Exchange increased by 27% to ₹8,060 Lakhs, driven by higher ADTV. However, due to increased expenses, the Exchange incurred a loss after tax of ₹1,376 Lakhs. The highest turnover achieved in a day was ₹3,730 Crore. The top traded commodities were Soy Oil, Guar Seed, Guar Gum, Soybean, and RM Seed. * **Operations Review:** Despite commodity suspensions, NCDEX maintained leadership in agri futures, holding ~79% market share. Physical deliveries increased by 18% to 4.72 Lakhs MT. Sectoral indices for Guar and Soy complexes were launched, and Refined Castor Oil was added to the product basket. * **FPO Connect:** Over one million farmers were connected through FPOs. NCDEX actively works with NABARD, SFAC, NRLM, and other institutions to promote financial inclusion. SEBI waived regulatory fees for FPOs. * **Technology Upgrade:** NCDEX migrated its live trade data centre to a Tier-IV facility. * **Awards and Recognition:** NCDEX received technology awards for digital transformation, including recognition for its data centre migration and Options familiarization program. The MD & CEO was awarded 'CTO of the year - NBFC category’ by Quantic Group. * **Capital Structure:** The authorized share capital is ₹70,00,00,000, and the issued, subscribed, and paid-up capital is ₹50,67,60,000. * **Membership:** As of March 31, 2022, there were 339 members on the Exchange platform. * **Customer Service:** The Customer Service Group (CSG) implemented improvements to enhance customer experience. * **Dividend:** The Directors recommend a dividend of 5 per cent on equity shares. * **Board of Directors:** Lists appointments and retirements/cessations of directors during the year. * **Statement on Declaration by Independent Directors:** Confirms that all Independent Directors meet independence criteria. * **Annual Evaluation:** Formal annual evaluation of Board, Committees and Directors was conducted. * **Board Meetings:** Eight Board meetings were held during the year. * **Audit Committee:** The Exchange has a constituted Audit Committee. * **Corporate Social Responsibility:** The CSR activities focused on improving post-harvest quality and returns for farmers. The Exchange assisted several resource institutions with seed cleaning and grading machines. In FY22, ₹25 Lakhs was spent voluntarily on CSR activities. * **Auditors:** K. S. Aiyar & Co. completed their term, and Khandelwal Jain & Co. were appointed. * **Secretarial Auditor:** Makarand M. Joshi & Co. served as Secretarial Auditor. * **Internal Auditor:** KPMG Assurance and Consulting Services LLP" served as Internal Auditor. * **Compliance with Secretarial Standards:** Confirms compliance with applicable Secretarial Standards. * **Particulars of Loans, Guarantees or Investments:** Disclosed in financial statements. * **Related Party Transactions:** All transactions were at arm's length and disclosed in financial statements. * **Risk Management:** The Exchange has a risk governance structure overseen by the Board and a Risk Management Committee. * **Subsidiary and Associate Companies:** NCDEX e Markets Limited (NeML), National Commodity Clearing Limited (NCCL), NCDEX Institute of Commodity Markets and Research (NICR), and National E-Repository Limited (NERL) with details. * **NCDEX e Markets Limited (NeML)** In e-Markets for the agricultural sector turnover increased 52%. NeML is also at the forefront in integrating its platform with the VAHAN eRegistry of the Ministry of Road Transport & Highways to explore the opportunities arising from the newly announced rules for End of Life Vehicles and seamless lending to its participants. * **National Commodity Clearing Limited (NCCL):** Summary statistics of trading, settlement and collaterals processed are given. * **National E-Repository Limited (NERL):** Offers digital platform for eNWRs. Banks crossed INR 2,000 Crores finance against eNWR since inception. * **NCDEX Institute of Commodity Markets and Research (NICR):** Offered certification courses, educational and training programs, data analytics, research and consultancy projects. * **Power Exchange India Limited (PXIL):** One of two power exchanges in India. Volumes traded increased by 27%. * **Awards & Recognition:** The Exchange takes pride to inform that various Digital Transformation initiatives implemented by the Exchange has been very well recognized by the Tech Industry and the Exchange has received four Technology awards in FY 2021-22. **Capital Structure, Membership, Customer Service** Details on capital structure, membership numbers (339 members across the country), and initiatives by the Customer Service Group (CSG). **Dividend and Appropriations** The Directors recommend a dividend of 5% on equity shares. **Subsidiary, Associate and Related Party Transactions** Information on subsidiary companies, related party disclosures and other compliances. **Risk Management** Details on Exchange's approach to Risk management **Directors' Responsibility Statement** The Directors confirm responsibility for financial statement preparation, accounting standards compliance, and internal controls. **Auditors** Details of statutory, secretarial and cost auditors, as well as qualifications/reservations in their reports. **Capital Structure** Details of share capital, member details. **Awards & Recognition** The Exchange received four technology awards and the prestigious Golden Peacock award. **Key Developments** Highlights initiatives to promote financial inclusion for farmers and Farmer Producer Organizations. **Operational and Financial Highlights** * Total comprehensive loss of ₹1,417 Lakhs for FY22. * Total income was ₹8,060 Lakhs (27% increase y-o-y). * Total expenses: ₹9,916 Lakhs. * Average Daily Traded Value (ADTV): ₹1,851 Crore (47% increase). * Total number of FPOs on boarded for price risk management in Exchange platform is 405. * The highest turnover achieved in a day during FY 2021-22 was ₹3,730 Crores. * Total number of Trades is 7,369,902 and Traded Quantity is 9,832,463 Mts **Cautionary Notes and Risk Management** Report makes clear that the Exchange is exposed to a variety of risks, including market and credit risk. The Company highlights also potential fluctuations to future earnings based on market conditions.. **Corporate Governance Report** Details on corporate governance practices, board composition, committee structure, and compliance. In relation to Independent Directors, the code followed includes: • Formulation of the criteria for determining qualifications • To devise a policy on diversity of board of directors • To lay down policy for compensation of KMP in accordance with SEBI guidelines The report also details about a Risk Oversight Committee.. and that the Exchange complies with all applicable Secretarial Standards. **Financial Statements (Standalone and Consolidated)** Detailed financial statements for the year ended March 31, 2022, including the balance sheet, statement of profit and loss, statement of changes in equity, and statement of cash flow, along with notes to the financial statements. This includes a note about related party transactions and the statement of loans, guarantees or investments This summary is intended to provide a high-level overview of the report's contents. Please refer to the full text for specific details and figures.

National Commodity & Derivatives Exchange Shares

NCDEX Annual Report 2020-21 Summary: The NCDEX (National Commodity & Derivatives Exchange Limited) annual report for the financial year 2020-21 highlights a challenging yet transformative year for the organization and the country, influenced by the COVID-19 pandemic. Despite these challenges, NCDEX maintained 100% uptime of its trading platform and continued investing in strengthening its technology infrastructure by upgrading its core trading system (CTCL - NEXTRA) and significantly upscaling its Primary Data Center to a Tier 4 facility. **Corporate Overview:** NCDEX offers 24 commodities, one indices, and options for trading. It has 357 members, 3.494 million clients, and 9,491 terminals. The storage capacity is 6.60 Lakh MT with 155 WRDA (Warehousing Development and Regulatory Authority) approved warehouses. There were 135 FPOs (Farmer Producer Organizations) traded, and 322 FPOs registered. A record daily turnover of ₹2,736.28 Crore was achieved on March 10, 2021. The Average Daily Trade Value (ADTV) was ₹1,270.17 Crore, with an Average Daily Open Interest (ADOI) of ₹2,711.94 Crore. A total of 5,32,255 Tonnes of commodities were deposited, and 4.18 Lakhs Tonnes of commodities were delivered, also on March 10, 2021. **MD & CEO's Message:** Arun Raste, MD & CEO, acknowledged the impact of lockdowns on the physical economy, affecting the Average Daily Turnover (ADT) to ₹723 Crore in the first quarter. However, participation gradually recovered, leading to subsequent quarterly ADTVs of ₹1,069 Crore, ₹1,557 Crore, and ₹1,706 Crore. NCDEX maintained leadership in the agri-derivatives segment with a 74% market share. They emphasize Indian farmers are at the core of NCDEX’s socio-economic objectives. The FPO tally reached 322, with 135 actively trading. FPOs traded over 56,000 tonnes in 18 commodities, and the exchange aims to register 1 million farmers through FPOs. India's first tradeable commodity index, AGRIDEX, was launched. The Exchange launched a novel scheme for FPOs to lock in selling prices for rabi crops, receiving excellent response in key states. NCDEX e-Markets Ltd (NeML) procured 10 million tonnes of farm produce worth ₹500 Billion through the E-Samridhi portal. National e-Repository Ltd (NERL) saw loans against electronic Negotiable Warehouse Receipts increase five-fold, with total pledge loan portfolio increasing to over ₹700 Crores. Arun Raste highlights the potential of the three farm laws to revolutionize agriculture and enhanced allocation for agri-infrastructure spending as opportunities. **FPO Highlights:** * 77 promoting/resource institutions engaged. * 884,546 farmers are members of FPOs supported. * Operations span 14 states. * 135 FPOs participated on the NCDEX platform. * 323,220 farmers participated. * 187 FPOs opened accounts but have not yet traded. * 56,188 MT traded across 18 commodities. **Directors' Report:** Total income on a standalone basis was ₹6,324 Lakhs, down 23%. Total expenses were ₹9,648 Lakhs, down 6%. A loss before tax of ₹3,358 Lakhs was recorded. A loss after tax of ₹2,488 Lakhs occurred. The company's share of net profit from Rashtriya e Market Services Private Limited (ReMS), a joint venture between the State Government of Karnataka and NCDEX e-Markets Limited (NeML), for FY 2020-21, was ₹49 Lakhs as compared to ₹432 Lakhs in FY 2019-20. The share in net profit from the PXIL for FY 2020-21, was ₹320 Lakhs as compared to ₹523 Lakhs in FY 2019-20. Exceptional items included provisions for doubtful debts and reversals of impairment losses. AGRIDEX was launched as India’s first tradeable commodity index. Options in Goods were also introduced, enabling FPOs to lock in selling prices. NCDEX e-Markets Ltd (NeML) achieved a milestone of procuring 10 Million tonne farm produce worth ₹500 Billion through E-Samridhi portal. There were 357 members on the Exchange platform as of March 31, 2021. The Exchange website was revamped, and processes for authorized person transfers simplified. The Exchange proposed a dividend of 5%, amounting to ₹253 Lakhs. 322 FPOs were on-boarded. There was 56,188 MT FPO traded across 18 commodities. The Exchange conducted 145 IEPs and 119 investor awareness programs, and 14 webinars for institutional participants. Options Familiarization Program was implemented to enable farmers to use market tools to hedge price risk. NABARD is collaborating with the Exchange to connect primary producers. The trading engine NEXTGEN was upgraded, and an enhanced version of NEXTRA launched. The Exchange participated in and won the AIMA Innovation Practitioners Award 2020. The Exchange has filed a Draft Red Herring Prospectus (DRHP) with SEBI for an initial public offering of equity shares. 357 members as of the year's end. The Authorized Share Capital is ₹70,00,00,000. **CSR Activities:** The Exchange's Corporate Social Responsibility (CSR) policy focuses on the social and economic development of farmers by providing access to markets. CSR activities centered around creating awareness among farmers about post-harvest management activities and improving farm gate quality. For FY 2020-21, because of a negative average net profit balance, no funds were statutorily available for CSR, however, ₹25 Lakhs was spent on empowering farmers through equipment, and this was approved by the shareholders. **Board & Committees:** Ashish Bahuguna became Chairman. Manikumar S, was appointed Shareholder Director. The Seventeenth Annual General Meeting of the Exchange was held on September 25, 2020. The Audit Committee, Nomination and Remuneration Committee, and other Board committees were discussed. **Risk Management:** The Exchange is focused on a transparent trading platform, strengthening risk management. An independent risk governance structure is in place, overseen by the Board and a Risk Management Committee (RMC) comprising Public Interest Directors and External Experts. **NCDEX Subsidiaries:** Four subsidiary companies are mentioned, including NCDEX e Markets Limited (NeML) and National Commodity Clearing Limited (NCCL). NeML continues its mission of positively impacting lives of both the smallholder farmers and bottom-of-the-pyramid citizens dependent on Government support for their food security. The NCCL was granted recognition by SEBI to act as a clearing corporation. **Management Discussion & Analysis:** This section covers industry structure, development, and specific financial details. The industry saw the impact of COVID-19, and the measures taken to mitigate economic crises. The discussion focuses on the performance, opportunities, and threats in the agricultural sector. There were significant shifts in the financial market and related statistics. The government impetus helped to facilitate growth for farmers and in turn NCDEX. **Financial Statements:** The report includes detailed standalone and consolidated financial statements, including the balance sheet, statement of profit and loss, statement of changes in equity, and statement of cash flow. Independent auditor’s reports and significant accounting policies are also provided.