Financial Year: 2024
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Independent Auditor's Report and Consolidated Financial Results
Khandelwal Jain & Co., Chartered Accountants, issued an Independent Auditor's Report on the annual audited consolidated financial results of National Commodity & Derivatives Exchange Limited (NCDEX) and its subsidiaries for the quarter and year ended March 31, 2024. The report adheres to Regulation 33 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, read with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
Opinion
The auditor provides an opinion on the consolidated financial results of NCDEX ("the Parent") and its subsidiaries ("the Group") and its share of net profit/(loss) after tax and total comprehensive income of associate and jointly controlled entities for the quarter and year ended March 31, 2024, along with the statement of cash flow for the year and the statement of assets and liabilities on that date.
The financial results include:
Basis of Opinion
The audit was conducted in accordance with the Standards on Auditing ("SA"s) specified under Section 143(10) of the Companies Act, 2013. The auditor believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the audit opinion.
Emphasis of Matter
Attention is drawn to Note 3 regarding matters relating to pepper contracts. The Holding Company had paid Rs. 1,696 lakhs (net of recovery of Rs. 9 lakhs till March 31, 2024) in earlier years towards cleaning of pepper stock in warehouses and related costs. The Hon'ble High Court of Kerala allowed the Holding Company to clean the pepper stock with the right to recover these costs. An interim order dated April 13, 2018, restricts the Exchange from taking coercive actions against the holder. Management believes there is a fair chance of recovery due to court orders and considers the receivable good, with an existing provision of Rs. 260 lakhs for pepper-cleaning costs.
Note 10 addresses the recognition of net deferred tax assets of Rs. 5,186 lakh as at March 31, 2024, based on future taxable profits and the approved business plan.
Note 8 highlights the suspension on the launch of new contracts and fresh positions of major commodities between August 17, 2021, and December 20, 2024. Management believes that there is no impact on the carrying value of its assets, no material uncertainty exists, and the financial statements have been prepared based on the going concern assumption.
Note 17 references an Emphasis of Matter paragraph in the Independent Auditor's Report for NCDEX e Markets Limited (NEML), regarding an order received from the Director General of GST Investigation (DGGSTI) Delhi North for alleged non-payment/short payment of Tax Collected at Source (TCS) on Goods and Service tax (GST). Management is confident of a favorable outcome.
Management's Responsibility
The Board of Directors is responsible for the preparation and presentation of the Consolidated Financial Results in accordance with applicable accounting standards and in compliance with Regulation 33 of the Listing Regulations, 2015 and SECC Regulations.
Auditor's Responsibility
The auditor's objectives include obtaining reasonable assurance about whether the Consolidated Financial Results are free from material misstatement and issuing an auditor's report.
Other Matters
The auditor did not audit the consolidated financial statements of certain subsidiaries and a jointly controlled entity. Reliance is placed on other auditors' reports or unaudited information, where applicable. Specifically:
The statement includes consolidated financial results for the quarter ended March 31, 2024, being the balancing figure. The report has been prepared for complying with Regulation 33 of Securities Contracts (Regulation) (Stock Exchange and Clearing Corporations) Regulations, 2012.
Financial Results Summary (Consolidated)
Other Key Points
Segment Reporting
The company identifies and discloses the following operating segments: Commodity Exchange Services, Commodity Clearing Services, Repository Services, Research and Education Services, E-Market Service, Software Service, Corporate Buying/Trade Finance, Unallocable. Details on revenue, expenses, assets, and liabilities for each segment are provided.
The report is signed by Narendra Kumar R Rajkumar Jain, Partner, Membership No. 048725, and dated May 24, 2024, Mumbai. The financial results are approved by the Board of Directors and reviewed by the Audit Committee.
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