Indian Commodity Exchange Limited (ICEX)
ICEX’s business
(i) Indian Commodity Exchange Ltd. (“ICEX”), a recognized commodity exchange with demutualized corporate structure, online trading, clearing, and settlement using best practices, is governed by the Securities and Exchange Board of India (“SEBI“). The only Primary Reportable business segment for the company is “business of facilitating trading in commodities and incidental activities thereto,” as it only operates in one reportable business segment, “Commodity Exchange,” and one reportable geographical segment, which is within India.
(ii) On August 28, 2017, the Exchange launched the 1 carat Diamond Derivative contract in order to restart trading operations again, after approval from SEBI. The Diamond Derivative contract was first introduced by ICEX, the first exchange in the world. On August 28, 2018, the Exchange introduced the Steel Long contract, precisely one year after the trading operations were resumed.
(iii) On August 27, 2018, and August 31, 2018, the Hon’ble National Company Law Tribunal (“NCLT“) approved the merger of National Multi-Commodity Exchange of India Limited (“NMCE“) with ICEX through a common order. The merger became operative on September 7, 2018. The plan called for April 1st, 2017 as the scheduled date. NMCE and ICEX merged as a result during the year. By operation of law, the commodities traded on the former NMCE were immediately exchanged on the ICEX platform. There are currently sixteen distinct commodity derivatives contracts listed on the exchange’s platform for trading.
(iv) The Paddy Basmati derivative contract was also introduced on July 11, 2019. The Exchange intends to maintain its reputation as a creative Exchange by occasionally introducing novel contracts.
(v) By entering into a Clearing and Settlement agreement with Metropolitan Clearing Corporation of India Limited (“MCCIL“), the Exchange has outsourced its services related to clearing, settlement, deliveries, and risk management to MCCIL with effect from October 1, 2018, in accordance with SEBI regulations and the previous SECC Regulations, 2012.
(vi) The Exchange has effectively set up its technology and infrastructure with the help of its seasoned management team. ICEX has partnered with Millennium IT, a top technology supplier and a subsidiary of the London Stock Exchange Group, whose technologies are utilized by exchange companies globally. In order to take advantage of price discovery, risk management, and supply chain management in the commodity markets, farmers, traders, and actual users are encouraged to participate in the Exchange, which is in a prime position to capitalize on the market’s enormous potential.
Initiative by SEBI to Promote Commodity Business
(i) SEBI has recently implemented a number of initiatives to strengthen the commodity derivative market. In a significant move to fortify the commodities market, SEBI allowed mutual funds to trade alongside PMS in commodity futures. It made participation in the Agri and Non-Agri commodities derivatives segments (CDS) possible for mutual funds and portfolio managers. Prior to this, commodities futures trading was permitted for Alternative Investment Funds (AIFs).
(ii) Prominent regulations efforts include permitting commodity options, permitting foreign companies to use Indian commodity markets to hedge their exposure to commodities, and permitting the trading of commodity indexes.
(iii) The SEBI approved the operation of two additional exchanges to run commodities derivative markets for the 2018–19 fiscal year. As a result, ICEX is one of the five national electronic multi-commodity exchanges that SEBI has recognised to date.
(iv) ICEX will begin this segment during the current fiscal year after SEBI gave ICEX permission to begin Mutual Fund distribution using the Exchange’s infrastructure.
Performance Highlights for FY19–20:
1. Compared to FY 2018–19, operating income for FY 2019–20 is ₹ 3.23 crore, up from ₹ 1.90 crore.
2. Compared to ₹ 28.57 Crore for the year ended March 31, 2019, the net loss after taxes for the year ended March 31, 2020, was ₹ 42.32 crore.
3. The total net worth was ₹129.37 crores as of March 31, 2020.
4. The Company introduced the Paddy Basmati Futures Contract on July 11, 2019, which represents another significant achievement for FY19–20. The first structured, open, and regulated diamond derivatives market in the world has been established by ICEX.
5. During the 2019–20 fiscal year, ICEX Company planned and launched a business in the Mutual Fund Distribution Scheme and its associated activities.
6. With 7098 clients trading on the Exchange, the average daily turnover for FY 19–20 was ₹ 156.41 crores, compared to ₹ 93.62 crores for FY 2018–19 (single side).
7. Compared to ₹ 24000 crores in F.Y. 2018–19, the total turnover of commodity futures traded on the ICEX Exchange for F.Y. 19–20 was ₹ 40511 crores.
8. As of March 31, 2020, ICEX had 138 SEBI registered members, 1298 Authorized Persons, and 3340 terminals—including Computer to Computer Link (CTCL)—operating in 329 Indian cities and towns, giving it a nationwide reach.
Significant Developments on ICEX (13.05.2022)
Since Commodity’s net worth has dropped below the required 100 crores to operate an exchange, SEBI has revoked its ICEX license.
Buy Indian Commodity Exchange Limited, Sell Indian Commodity Exchange Limited, Buy ICEX Unlisted shares, Sell ICEX Unlisted shares
ABOUT INDIAN COMMODITY EXCHANGE LIMITED
INDIAN COMMODITY EXCHANGE LIMITED is a recognized Commodity Exchange of India regulated by SEBI (Securities and Exchange Board of India), having demutualized corporate structure, online trading, clearing, and settlement with best practices. Indian Commodity Exchange Limited aims to fulfill the objective of serving the benefits of the price discovery and risk management of the commodity derivatives market to the producers of that commodity.
In 2017, Indian Commodity Exchange Limited started its operations after obtaining permission from SEBI to re-commence its trading operations. In August 2017, it launched the Diamond Derivative contract of 1 carat. Indian Commodity Exchange Limited became the first exchange to launch the Diamond Derivative contract. In August 2018, the exchange launched Steel Long contract. In July 2019, the PaddyBasmati derivative contract was launched. Today, the Exchange has 14 commodities for trading on its platform. In December 2019, the ICEX MF Platform was launched, a mutual fund platform, to facilitate transactions in Mutual Funds.
The Exchange has outsourced the services of clearing, settlement, deliveries, risk management services, and any other applicable post-trade services to Metropolitan Clearing Corporation of India Limited.
Indian Commodity Exchange Limited is the first Exchange in India to adopt a global hi-tech platform that ensures automatic and seamless switchover from its Data Center (DC) to the Disaster Recovery (DR) site with zero data loss in case of exigencies. The technology platform has highly optimized processing techniques, which enables the system to handle very large orders with latencies under 300 microseconds.
Indian Commodity Exchange Limited has a network of 138 SEBI registered members, having 1298 Authorized Persons, operating through 3340 terminals including Computer to Computer Link (CTCL) across 329 cities/towns across India as of 31st March 2020.
INCORPORATION DETAILS
| CIN | U67120GJ2008PLC99142 |
| Registration Date | 18 August 2008 |
| Category/Sub-category of the Company | Company Limited by Shares |
| Address of the Registered office and contact details | 1st Floor, Office – 109, Nodh No.-1158 to 63/65/9, Hat Faliyu, Mahidharpura, Surat- 395003, Gujarat.
Tel. No: +91- 261-2609960/3009960 |
| Name, Address, and Contact Details of
Registrar and Transfer Agent, if any |
K Fin Technologies Private Limited
Selenium Tower B, Plot numbers 31 & 32 Nanakramguda, Financial District, Gachibowli Hyderabad – 500 032 |
PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
| Name and Description of main products/services | NIC Code of the product/service | % to total turnover of the Company |
| Exchange Operation | 66110 | 100% |
BOARD OF DIRECTORS
Mr. Vijay Kumar Sharma (Chairman, Public Interest Director)
Mrs. Chitra Shringare (Public Interest Director)
Mr. Suresh Kumar Agarwal (Public Interest Director)
Mr. Sanjit Prasad (Managing Director & CEO)
PARTICULARS OF SUBSIDIARY AND ASSOCIATE COMPANIES
INDIAN COMMODITY EXCHANGE LIMITED does not have any subsidiary or associate company.
SHAREHOLDING PATTERN (As of 31-03-2020)
| S. No. | Shareholders’ Name | Number of shares | % of total Shares of the company |
| 1 | Indiabulls Housing Finance Limited (Promoter) | 3,00,00,000 | 5.62% |
| 2 | MMTC Limited (Promoter) | 3,20,00,000 | 6% |
| 3 | Reliance Exchange next Limited (Promoter) | 8,71,00,000 | 16.33% |
| 4 | Reliance Corporate Advisory Services Limited (Promoter) | 1,73,06,671 | 3.24% |
| 5 | Central Warehousing Corporation | 5,89,63,956 | 11.05% |
| 6 | Deputy Director (PMLA), Director of Enforcement, Ahmedabad | 4,82,09,060 | 9.04% |
| 7 | Indian Potash Limited | 2,66,75,000 | 5.00% |
| 8 | Other Public Shareholding | 23,32,52,789 | 44.65% |
| Total | 53,35,07,476 | 100.00% |
INDUSTRY OUTLOOK
Until 2015, the commodity futures market was regulated by Forward Market Commission (FMC).In 2015, after the merger of FMC with the Securities and Exchange Board of India (SEBI), SEBI became the regulator of the commodity futures market. Commodity Exchanges play a vital role in promoting growth, transparency, and efficiency of the commodity futures markets. This role is defined by their functions, infrastructure capabilities, trading procedures, settlement, and risk management practices.
FY 2020 was steeped with uncertainties for India’s commodity markets. A slackened growth of the economy, the US-China trade war, weak currency due to frequent monetary easing and downgrades by multiple agencies, and a firm dollar as compared to the rupee and the aggravated US-Iran war-like conditions, are some of the factors which have led to the commodity markets lackluster performance.
In the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lockdowns on all economic activity. Despite the lockdown, a protracted return to normalcy was seen by August 2020. The unprecedented scale and scope of policy responses will undoubtedly help to limit the extent of the collapse and will help the post-crisis recovery.
Recently, SEBI has taken various steps to boost the commodity derivative market. In a major decision to strengthen the commodity market, SEBI permitted mutual funds to participate in commodity futures along with PMS. It enabled mutual funds and portfolio managers to participate in the Agri and non-Agri commodity derivatives segments (CDS). Earlier, Alternative Investment Funds (AIFs) were allowed to trade in commodities futures. Notablepoliciesinitiatives have been allowing commodity options, allowing foreign entities to hedge their exposure on commodities in Indian commodity exchanges, and allowing the introduction of commodity indices trade.
Other than the response to the Covid-19 pandemic, major factors to impact Indian commodity markets in the coming year include a resurrection in consumption demand, growth led by policy reforms, a move towards digitization, and the monetary stance of central banks of major economies, and the economic and trade policies. Coupled with strong demographic dividends and economic growth, consumer demand conditions in the country will remain strong for a long period. Additionally, a stable fiscal situation, moderate inflation rate, exports growth, and rising FDI inflow point towards fundamental stability in the economy, which augurs well for the markets.
Indian Commodity Exchange Limited Balance Sheet (Rs in thousands)
|
Particulars |
31-03-2023 |
31-03-2022 |
|
Assets |
|
|
|
Non-Current Assets |
|
|
|
Property, Plant and Equipment |
21,940.66 |
45,543.21 |
|
Intangible Assets |
– |
5,07,205.73 |
|
Non-Current Investments |
1,00,000.00 |
– |
|
Other Non-Current Assets |
2,716.06 |
5,12,754.40 |
|
Total Non-Current Assets |
1,24,656.72 |
10,65,503.34 |
|
Current Assets |
|
|
|
Investments |
1,17,280.59 |
1,43,180.78 |
|
Trade Receivables |
– |
10,721.91 |
|
Cash and Cash Equivalents |
1,034.35 |
7,573.40 |
|
Loans & Advances |
3,85,000.00 |
– |
|
Other Financial Assets |
10,190.99 |
1,157.80 |
|
Other Current Assets |
2,09,923.31 |
2,19,113.91 |
|
Total Current Assets |
7,23,429.24 |
3,81,747.80 |
|
Total Assets |
8,48,085.96 |
14,47,251.14 |
|
Equity and Liabilities |
|
|
|
Equity |
|
|
|
Equity Share Capital |
26,67,537.38 |
26,67,537.38 |
|
Other Equity |
-24,33,384.81 |
-18,44,047.27 |
|
Total Equity |
2,34,152.57 |
8,23,490.11 |
|
Settlement Guarantee Fund |
3,85,883.78 |
3,80,351.77 |
|
Liabilities |
|
|
|
Non-Current Liabilities |
|
|
|
Lease Liabilities |
– |
2,607.76 |
|
Other Financial Liabilities |
– |
52,275.00 |
|
Provisions |
678.02 |
2,468.17 |
|
Total Non-Current Liabilities |
678.02 |
57,350.93 |
|
Current Liabilities |
|
|
|
Financial Liabilities |
|
|
|
Lease Liabilities |
3,285.35 |
5,833.53 |
|
Total Outstanding Dues of Creditors Other than Micro Enterprises and Small Enterprises |
1,28,660.86 |
1,36,428.90 |
|
Other Financial Liabilities |
69,060.57 |
22,071.53 |
|
Other Current Liabilities |
25,829.73 |
21,724.37 |
|
Other Current Provisions |
535.08 |
– |
|
Total Current Liabilities |
2,27,371.59 |
1,86,058.33 |
|
Total Liabilities |
2,28,049.61 |
2,43,409.26 |
|
Total Equity and Liabilities |
8,48,085.96 |
14,47,251.14 |
Indian Commodity Exchange Limited Profit & Loss Statement (Rs in thousands)
|
Particulars |
31-03-2023 |
31-03-2022 |
|
Revenue |
|
|
|
Revenue from operations |
2,462.11 |
12,260.05 |
|
Other income |
15,829.42 |
8,593.91 |
|
Total income |
18,291.53, |
853.96 |
|
Expenses |
|
|
|
Employee benefits expense |
28,411.58 |
53,534.45 |
|
Operating cost |
17,869.00 |
1,08,138.18 |
|
Finance Cost |
677.58 |
1,027.70 |
|
Depreciation and amortization expense |
1,00,433.79 |
37,742.29 |
|
Impairment |
4,30,399.08 |
– |
|
Other expenses |
23,225.25 |
37,780.95 |
|
Total expenses |
601.016.28 |
2,38,223.57 |
|
Profit(loss) before tax |
(582,724.75) |
(217,369.61) |
|
Income tax for earlier years |
3,327.16 |
|
|
Profit(loss) for the year |
(586,051.91) |
(217,369.61) |
|
Remeasurement of Employee benefits obligations |
3,285.63 |
(1,201.92) |
|
‘Total comprehensive income for the year |
(589,337.54) |
(216.167.69) |
|
Earnings per equity share |
|
|
|
(Face Value of Rs. 5 each fully paid up) |
|
|
|
Basic |
(1.10) |
-0.41 |
|
Diluted |
(1.10) |
-0.41 |
Indian Commodity Exchange Limited Consolidated Cash Flow Statement (Rs in thousands)
|
Particulars |
31-03-2023 |
31-03-2022 |
|
Cash Flows from Operating Activities |
|
|
|
Net Profit/(Loss) Before Tax |
-5,82,724.75 |
-2,17,369.61 |
|
Adjustments for: |
|
|
|
Depreciation, Amortization, and Impairment Expense |
5,30,832.87 |
37,742.29 |
|
Finance Cost – Lease under Ind AS 116 |
677.58 |
1,027.70 |
|
Interest Income |
-9,035.67 |
-83.1 |
|
Provision for Doubtful Debts & Bad Debt |
13.27 |
16,062.65 |
|
(Gain)/Loss on Foreign Exchange |
6,058.86 |
82 |
|
Excess Provisions Written Back |
-2,540.00 |
– |
|
(Gain)/Loss on Redemption/Fair Valuation of Units of Mutual Funds |
-3,058.25 |
-8,190.59 |
|
Operating Profit/(Loss) Before Working Capital Changes |
-59,776.09 |
-1,70,728.66 |
|
Adjustments for: |
|
|
|
Trade Receivables and Other Current Assets |
22,439.24 |
-10,786.31 |
|
Other Current Financial Assets |
-13,668.32 |
0 |
|
Other Non-Current Assets |
5,10,038.34 |
-24,395.68 |
|
Other Non-Current Liabilities |
-1,790.15 |
-6,323.42 |
|
Trade Payables and Other Current Liabilities |
-15,214.27 |
43,869.23 |
|
Other Current Provisions |
-2,750.55 |
– |
|
Adjustment for Increase in Settlement Guarantee Fund |
5,532.02 |
24,939.33 |
|
Cash Generated from/(Used in) Operations |
4,44,810.23 |
-1,43,425.51 |
|
Net Income Tax Paid (Net of Refunds) |
-2,351.06 |
-1,126.93 |
|
Net Cash Generated from/(Used in) Operating Activities |
4,42,459.17 |
-1,44,552.44 |
|
Cash Flows from Investing Activities |
|
|
|
Purchase of Property, Plant, Equipment and Intangible Assets |
-30 |
-44.99 |
|
Proceeds from Sale of Property, Plant, and Equipment |
5.41 |
– |
|
Interest Received |
12,901.47 |
98.45 |
|
Investment in Non-Corporate Debenture |
-1,00,000.00 |
– |
|
Proceeds of Current Investments (Net) |
28,958.43 |
1,51,809.33 |
|
Loans and Advances Given |
-3,85,000.00 |
– |
|
Net Cash Generated from/(Used in) Investing Activities |
-4,43,164.69 |
1,51,862.79 |
|
Cash Flows from Financing Activities |
|
|
|
Lease Rent Payments |
-5,833.53 |
-6,280.08 |
|
Net Cash Generated from/(Used in) Financing Activities |
-5,833.53 |
-6,280.08 |
|
Net Increase/(Decrease) in Cash and Cash Equivalents |
-6,539.05 |
1,030.27 |
|
Cash and Cash Equivalents at the Beginning of the Year |
7,573.40 |
6,543.13 |
|
Cash and Cash Equivalents at the Close of the Year |
1,034.35 |
7,573.40 |
|
Note: Cash and Cash Equivalents as at the Close of the Year Comprise |
|
|
|
Cash on Hand |
5.01 |
4.8 |
|
Balances with Scheduled Banks |
|
|
|
In Current Accounts |
1,029.34 |
7,568.60 |
|
Cash and Cash Equivalents |
1,034.35 |
7,573.40 |
Here is a summary of the Cash Flow Statement for the years 2023 and 2022:
Cash Flows from Operating Activities
Analysis:
Net Profit/Loss: The loss before tax increased in 2023 compared to 2022, indicating worsening operational efficiency.
Adjustments: Significant adjustments include a large increase in depreciation, which has improved from the previous year.
Working Capital Changes: Positive changes in current assets and liabilities contributed to a substantial positive cash flow from operations in 2023 compared to a negative cash flow in 2022.
Net Cash from Operating Activities: In 2023, there was a significant positive cash flow, recovering from the negative cash flow in 2022. This indicates a strong operational improvement.
Cash Flows from Investing Activities
Analysis:
Investments and Receipts: There was a substantial investment in non-corporate debentures and a large loan given, which led to significant negative cash flow from investing activities in 2023.
Proceeds from Investments: Proceeds from current investments decreased from the previous year.
Overall Cash Flow: The cash flow from investing activities was negative in 2023 compared to a positive cash flow in 2022, reflecting increased outflows for investments and loans.
Cash Flows from Financing Activities
Analysis:
Lease Payments: There was a slight decrease in lease rent payments in 2023.
Overall Cash Flow: The cash flow from financing activities remained relatively stable but negative in both years, indicating ongoing outflows for lease payments.
Net Increase(Decrease) in Cash and Cash Equivalents
Analysis:
Change in Cash: There was a decrease in cash and cash equivalents at the end of 2023 compared to 2022. This decline is due to the negative cash flow from investing activities, despite a positive cash flow from operating activities.
Cash Position: The ending cash balance decreased significantly, showing that the company used up its cash reserves for investments and loans.
Financial Ratios of Skyline India Limited
|
Ratios |
31-03-2023 |
31-03-2022 |
|
Trade Payables Turnover Ratio |
0.18 |
0.31 |
|
Net Capital Turnover Ratio |
0.71 |
4.26 |
|
Net Profit Ratio (%) |
-32.04 |
-10.42 |
|
Return on Capital Employed (%) |
-175.33 |
-30.57 |
|
Return on Investment (%) |
0.12 |
0.04 |
|
Current Ratio |
3.18 |
2.05 |
|
Return on Equity Ratio (%) |
-110.83 |
-23.33 |
|
Trade Receivables Turnover Ratio |
0.46 |
0.88 |
Dividend history
|
Particulars |
31-03-2023 |
31-03-2022 |
|
Dividend paid |
– |
– |
|
Retained earnings |
-31,08,958.57 |
-25,22,906.66 |
|
Total |
-31,08,958.57 |
-25,22,906.66 |
The Company has not declared or paid any dividend during the year.
