MANAGEMENT'S DISCUSSION AND ANALYSIS

Economic Overview

The global economy showed an uptrend in 2014, although the performance was lower than initially expected. Growth picked up only marginally in 2014, to 2.6 per cent, from 2.5 per cent in 2013, according to the 'Global Economic Prospects', January 2015, published by the World Bank. However, there were divergent trends within the overall picture. While activity in the U.S. and the UK gathered momentum, recovery had been slow in the euro area and Japan. China too experienced a slowdown on the back of weak domestic and external demand. Soft commodity prices, particularly of crude oil, helped support economic activity in most developing economies, although the effect on oil-exporting economies was negative.

GDP growth in India recorded 7.3 per cent (provisional estimates) in 2014-15, up from a revised 6.9 per cent growth seen in 2013-14 at constant (2011-12) market prices. According to the latest data released by the Government of India, the cumulative growth in the Index for Industrial Production (IIP) stood at 2.8 per cent for 2014-15, compared to the de-growth of 0.1 per cent in 2013-14. Agriculture, however, performed less satisfactorily in 2014-15. The growth rate in gross value added (GVA) at basic prices in agriculture declined from 3.4 per cent in 2013-14 to 0.2 per cent in 2014-15, caused largely by inadequate monsoon.

Global Commodity Market

Continuing on past year's trend, trading in listed derivatives markets across the globe rose by 1.4 per cent in 2014 annually, similar to the growth (2.1 per cent) in 2013, according to FIA (Futures Industry Association) Annual Volume Survey, 2014. The total number of futures and options traded on exchanges worldwide stood at 21.867 billion contracts in 2014.

By region, North America (with 8.213 billion contracts) led the way with a 4.9 per cent increase in volume in 2014, driven by a rise of 8.9 percent jump in trading in U.S.-based CME Group. A moderate growth of 2.1 per cent was also seen in Europe; with the total number of derivatives lots traded standing at 4.450 billion contracts in 2014. In contrast, volumes in Asia (7.252 billion contracts) and Latin America (1.514 billion contracts) fell by 0.7 per cent and 10 per cent respectively in 2014.

By asset class, equity and equity index derivatives that form a major chunk of the total global derivative volumes, together increased by a significant 4.7 per cent to 12.321 billion contracts in CY 2014, up from 11.772 billion contracts traded in CY 2013. On the other hand, both interest rate derivatives trading and currency derivatives trading declined by 1.9 per cent and 15.1 per cent respectively in 2014 annually. Significantly, commodity derivatives trading continued to grow (5.6 per cent) in 2014, after registering a stellar growth (22.5 per cent) in 2013. Overall, commodity derivatives volume in 2014 stood at 3.804 billion contracts. Strong growth in China, especially in agricultural commodities futures trading and industrial commodities futures trading, helped the overall growth in global commodity derivatives trading.

Among global commodity derivatives, significant growth in trading was witnessed in non-brcious metals and agriculture, which more than countered the fall in brcious metals and energy.

Overall in 2014, barring equity and its indices derivatives trading, commodity derivatives was the next most-traded category, well-above derivatives trading in interest rates, currencies and others.

During CY 2014, volumes on MCX stood at 133 million contracts, that is, down by 49 per cent over CY 2013. The drop in volumes was largely attributed to the continued effect of commodities transaction tax (CTT) on non-agricultural commodities, effective July 2013; and to the payment crisis at National Spot Exchange Limited (NSEL) that dented interest in commodity trading as well.

Industry Structure and Development

Owing to the imposition of CTT and the payment crisis at NSEL in 2013-14, volumes in the commodity derivatives market continued to decline in 2014-15. The total value of commodity futures traded by all national commodity exchanges was Rs. 61.68 lakh crore, down from Rs.101.44 lakh crore clocked in the brvious financial year.

Opportunities and threats

The size, diversity, and commodity-intensity of India's economic growth ensure a lot of opportunities for the growth of MCX. Given the thrust of the government on economic reforms in some critical areas, particularly its push to manufacturing under the 'Make in India' initiative, the Indian economy is poised for a great leap forward. What is significant for the commodity derivatives market is that the growing economy will place a demand for commodities and risk management, which will provide ample opportunities for the company.

A very significant policy initiative by the government through the Finance Act, 2015, was the merger of the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (SEBI). The SEBI has penal powers of raid and search, and to impose punitive action against wrong-doers in the market under its jurisdiction. Thus, by placing commodity derivatives market under the wings of the SEBI, unregulated or dabba market, the size of which is multiple times that of the regulated commodity derivatives market, can be effectively curbed. Once such illegal markets are curbed, some of the volumes of these markets are sure to flow to regulated platforms like MCX.

The other gains of the FMC and the SEBI merger is that securities brokers who have memberships of commodity futures exchanges through their subsidiary companies could benefit, as being under a single regulator may reduce the duplication of activities resulting in reduced costs of administration and compliance. This may encourage them to divert human and financial resources for greater market penetration and facilitate financial inclusion.

Recent legislative measures pave the way for the introduction of financial products like options, which may facilitate trading in underlyings other than commodities on platforms like MCX. This is surely an opportunity that the company is looking for. On the flip side, this could also mean that other exchange platforms, which were not able to offer commodity derivatives till now, could do so in the future.

The other threats to MCX's business could arise from any increase in the existing taxes on commodity derivatives transactions or imposition of any new tax—either by the central or state governments Domestic or international factors affecting the price movements of commodities could also lead to low trading interest in commodity markets, and could affect the company's trading volumes. Government or regulatory interventions, such as suspension in trading in some commodities, which have the potential to disrupt commodity futures trading, could also affect the company's profitability.

MCX's business overview in 2014-15

With the support of all stakeholders, MCX has been able to withstand the brssure on its volumes and profitability arising from the imposition of CTT and the payment crisis at NSEL and retain its leadership position. With a market share of 84.04 per cent in FY 2014-15, MCX remained the undisputed leader. During the year, the company clocked an average daily turnover of Rs. 20,328.26 crore as against Rs. 27,778.86 crore in the brvious fiscal. The total turnover stood at Rs. 51.84 lakh crore in FY 2014-15, as compared with Rs. 86.11 lakh crore in the brvious year.

Market Development initiatives

MCX undertook a number of initiatives in 2014-15 for the development of the market and to propagate the benefits of trading on commodity derivatives exchanges.

• Awareness creation and capacity building

MCX undertook a number of focused measures to educate potential hedgers on the benefits and modalities of hedging. During 2014-15, the company conducted as many as 411 awareness programmes across the country, in addition to regular interactions of stakeholders with senior exchange officials. These programmes not only created awareness on the need and benefits of managing price risks by trading on commodity futures exchanges, but also trained the participants on hedging techniques, trading strategies, technical analysis, and so forth. MCX also associated itself with various universities and other educational institutions, besides undertaking 14 capacity building programmes for promoting financial literacy in the commodity ecosystem. Moreover, during 2014-15, the exchange conducted 396 farmers training programmes, covering 18,369 farmers. In a first of its kind, MCX has also initiated a series of compliance awareness programmes for the members, and the first such programme was conducted in Mumbai on 12th March 2015. Many such programmes have been planned for the months ahead.

MCX engages with print and electronic media to create awareness and sensitize policymakers on various matters affecting the market. MCX published a weekly advertorial series titled 'Commodity-wise' in multiple language editions of The Economic Times, which provided experts' insights on various aspects of commodity markets and commodities. Similarly, an educational series on 'risk management', which was created in-house, was published every week in the Mint. Both the commodity-wise and risk management series received very good response from the readers.

Another tool that enables the company to engage with commodity market participants is its periodic newsletters. Apart from the MCX newsletter, CommNews, another monthly publication, Commodity Connect was started during the year. These publications endeavour to make the learning more effective by providing insights on commodity markets, commodities, policies, regulations and recent developments in international and domestic markets along with an analysis of their effects. During the year, the company also started publishing commodity-specific brochures on hedging to educate the current and potential hedgers. For wide dissemination of the knowledge on hedging, the hedging brochures were published in English and many regional languages (that is, Hindi, Gujarati, and Tamil) and uploaded on the website.

• Stakeholder engagements

MCX regularly engages with trade bodies and other stakeholder associations for policy advocacy and market development. Often, such engagements lead to active participation in events organised by these bodies. Some of the events that the company participated in during FY 2014-15 included: FIA International Futures Industry Conference, 2015, 11th India International Gold Convention, Globoil India 2014, International Convention of CPAI, 13th Commodity Futures Market Summit & Excellence Awards of ASSOCHAM, Indian Cotton Conference 2014, 2nd International Indian Metal Recycling Conference of MRAI, 7th Metals Outlook and Market Trends by MMR, and so on.

• Research Studies

To make efforts at policy advocacy and market development more meaningful and effective, MCX undertakes evidence-based research studies. An impact analysis research study on the MCX cardamom contract was completed during the year, together with IIM Kozhikode.

Role of Technology

Your Company has striven to achieve sustainable growth by coalescing product innovation with cutting-edge technology in order to enhance access and participation. Technology has been the backbone of your Company's business, and the

Exchange's consistent efforts to upgrade and enhance its technology systems, has helped it to stay ahead of time in the dynamic commodity business.

Your Company has deployed scalable architecture capable of adapting to innovations and new market solutions. A well-designed system along with a structured technology road map ensures reliability, scalability, security and functionality of its trading system. The Exchange has kept pace with the rapid technological developments and changes. It is focused on developing, implementing and maintaining enhanced functionalities required by its members, while ensuring that such technology is not vulnerable to security risks. The upgraded version of the Exchange's system has enabled it to handle even the peak volumes with ease. At brsent, it has a handling capacity of 40,000,000 transactions (Orders and Trades put together) per day, which is well above the record volumes witnessed by the Exchange till date.

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. This has enabled your Exchange attain and retain its members' confidence and market leadership on a consistent basis. Your Company's high performance nationwide private network (NPN) provides end-to-end connectivity, which is robust, scalable and capable of servicing the growing connectivity requirements of the future. The architecture consists of POPs (Points of Presence) connecting to the core routers at your Company's Data centre (DC) and Disaster Recovery (DR) site. The DR site is located at Delhi, which falls under a seismic zone different from that of Mumbai. The Exchange's online trading platform is accessible to its members through trader workstations or computer-to-computer link (CTCL) using multiple connectivity including NPN-POP, VSAT, VPN, leased line, and internet.

The robust technology of the Exchange enables it to adopt market safeguards through real time risk monitoring system and execution of adequate mechanisms that track our members' margin utilisations and mark-to-market (MTM) losses online against their deposits made available to the Company. The system automatically generates alerts and takes br-decided actions.

As on 31 March 2015, your Company had 1,792 members on its Exchange platform, operating through more than 481,000 trading terminals (including CTCL/IBT), spanning over 1,879 cities and towns across India.

Strong Leadership Team

The exchange has emerged as a world-class institution through the direction provided by its leadership team - the management and the Board of Directors. Their guidance and thought leadership have been instrumental in the Exchange's growth and maintenance of its leadership position.

Product-wise Performance

Detailed product-wise performance of commodities is covered in the Annexures to the Directors' Report.

Risk Management and Surveillance System

Your Company uses market safeguards and risk management techniques to ensure that its members meet their financial obligations promptly and Exchange is protected from undesirable events. Some of the risk management mechanisms are listed below:

Insurance Coverage: To minimise operational risks, your Exchange advises its members to avail Indemnity Insurance Policy. The policy provides indemnity in respect of members' erroneous transactions, forgery, dishonesty of employees, computer crimes, electronic transmissions and electronic securities.

Minimum Net worth Requirements: Your Exchange necessitates all its members to have a certain minimum networth. Members are required to confirm their net worth on an annual basis, which enables the Company to monitor and ensure their financial strength.

Margin Requirements: To mitigate risks associated with daily price movements in commodities, the Exchange imposes margins. Your Company necessitates members to pay a security deposit at the time of registration, which serves as the initial margin. The initial margin requirement is computed using SPAN™, which is a portfolio-based margining system used under license from CME, to identify the overall risk in a portfolio of contracts for each client of a member. The margins are applicable at the client-level and grossed up at the member-level. Further, once a member's margin utilisation breaches the eligible deposits available with the Exchange, the system automatically shifts such member to square-off mode, where no order that can create any fresh position is accepted by the system. The system only allows order/s which can reduce or liquidate the member's outstanding position. This is monitored online on a real time basis by the system.

Mark-to-Market (MTM) Loss Monitoring: The trading system of your Exchange tracks losses incurred by a member on a real-time basis by comparing the difference between the contracted price and the last trade price on the market. Alerts are transmitted to a member whenever the member's MTM loss amounts exceed certain percentages of the MTM limit.

Warehousing

Forward Markets Commission (FMC) vide its letter No. Div III/FMC/WH/(3) dated November 21, 2014 had laid down various norms regarding accreditation of Warehouse Service Providers (WSPs) for Agri and Agri-processed commodities traded at National Multi-Commodity Exchanges (NMCEs). FMC had outlined various norms on eligibility of promoters, financial norms on net worth & security deposit, corporate governance, Facilities & Infrastructure requirements, Insurance, Inspection/Audit & MIS etc. for empanelment as WSP. MCX is operating with only a sole Warehouse Service Provider viz. Sohanlal Commodity Management Pvt Ltd. Accordingly, the norms and process for empanelment as WSP were put up on the website of the Exchange and an advertisement was issued on 19th February 2015 calling for applications to act as WSP. Out of the applications received, M/s Origo Commodities Pvt Ltd. and Yamada Logistics Pvt. Ltd. were empanelled as WSPs to the Exchange after approval by the Risk Management Committee of the Exchange in its meeting held on May 26, 2015. The FMC had also issued a directive that all warehouses accredited by the Exchanges should be registered with the Warehousing Development and Regulatory Authority as by June 30, 2015 which is now extended till October 31, 2015. MCX is thus brparing to get all its warehouses registered with WDRA within the timelines.

Regulation of warehouses remains a grey area : The Warehousing Development and Regulatory Authority (WDRA) is under the aegis of Department of Food & Public Distribution.

Warehousing is an important part of the commodity exchanges ecosystem and is required for delivery. For the commodity derivatives ecosystem to grow, more commodities need to be made delivery-based.

Risks and concerns

The company's business performance and financial position depends on various factors, of which the following are of particular importance:

• Macro-economic trends. India's commodity derivatives market is affected by both domestic and the global economic factors. Thus, as a part of the Indian commodity derivatives market, the results of the company's operations too are significantly influenced by these economic factors. Economic events such as the national industrial growth, global financial crisis and the speed of recovery, inflation, and so on influence commodity markets in India and globally. The demand and supply of commodities is driven by a growth in the economy, which in turn affects the overall volume of commodities being traded in India. Generally, an increase in demand for commodities along with increased price volatility has a positive effect on the company's operational results. The company keeps track of the emerging economic trends, and realigns its business strategy, as and when required.

• Imposition/enhancement of tax. The Indian Union Budget for FY2013-14 imposed CTT on the sale of non-agricultural commodity futures contracts at 0.01 per cent. This increased the cost of transactions and negatively affected volumes. Any increase in CTT, expansion of its coverage or imposition of a new tax on commodity derivatives trading can adversely affect volumes traded on the exchange, thereby affecting the company's profitability.

• Trading Volumes and Contract Values. As the transaction fee is calculated on the basis of the value of commodity futures contracts traded on the exchange, the volume and value of contracts traded on the exchange have a direct effect on the company's revenues. The trading volumes and value of contracts are affected by external factors, such as the construction of new production facilities or processes, new uses or the discontinuance of historical uses, mine/plant closures, adoption of new technology by the commodity-specific industry, weather, and natural disasters; trade policies and regulations; and geopolitical events involving governments or economic paradigms, among others.

• Regulatory Environment. All aspects of the company's operations are subject to regulatory oversights. If changes in laws, taxation, and so on are carried out, or new ones introduced by the market regulator or the government, which necessitate the company to allocate more resources to comply with them, they may impede the company's ability to operate and grow its business.

• Technological Advancements. Technology has played a key role in the performance of the exchange and has been its main differentiator among its competitors. The successful operations of your Company's business and operating results are dependent in part on the use and deployment of technology. Thus, maintenance of state-of-the-art technology is a cost your company has to continually expend on because technological obsolescence can have serious negative repercussion on the exchange's business. On the other hand, the company expects that advancements in technology, technological infrastructure and connectivity options will enable it to provide more efficient trade execution services, and increase its economies of scale. This is expected to have a positive impact on its revenues.

Outlook

India is already one of the largest consumers or producers in several commodities and therefore has the potential of emerging as the regional, if not the global, centre for commodity derivatives trade. As the largest exchange with an undisputed leadership position, MCX is uniquely placed to reap the opportunities of growth and expansion as and when the environment permits. With the passage of the Finance Bill, 2015, the re-definition of 'commodity derivatives'

may create such an environment where the company may be allowed to offer derivative products, such as options and indices, for trading. These products are particularly suitable to the risk management needs of the small stakeholders and may take MCX to a higher path of inclusive growth.

Similarly, if different types of institutions are allowed to participate in the commodity derivatives market, the move will boost volumes and profitability of the company. Indeed, in the current growth phase of the commodity derivatives market, institutional investors—both domestic and foreign—are absolutely necessary as they can inject liquidity in this market and help it grow. By reducing the bid-ask sbrad and improving hedging efficiency, liquidity in the futures market can attract hedging interest, particularly in the far-month contracts, making the market more inclusive. Besides, institutions such as banks can also hand-hold smaller participants to trade in this market to manage their risks.

MCX has been advocating with policymakers for the reduction, if not the elimination, of the CTT. The tax in the brsent form is the single largest component in the cost of transaction and multiple times of even the transaction charge levied by the exchange. If CTT is reduced, the market will get a fillip, boosting turnover and revenues of the company.

SWOT analysis: SEBI-FMC merger & regulatory developments

The SEBI-FMC merger was announced in the FY15-16 Union Budget by the Finance Minister. The merger is expected to have a far-reaching implication on the commodity exchanges ecosystem. In addition the government has also announced other regulatory and policy measures. Below is a SWOT analysis of the regulatory developments on the businesses of commodity exchanges:

Strengths:

1) New product launches to drive future growth: Commodity exchanges may come to be considered at par with stock exchanges, allowing the former to launch products such as options, exchange-traded funds, and indices. Leading commodity exchanges are said to be ready with products such as options and indices, which could be launched once the merger comes into effect, subject to regulatory approval.

2) Encourage greater institutional participation in commodity exchanges: The merger could result in financial institutions and foreign investors being permitted to participate in trading on commodity exchanges.

3) Reduce operational costs for brokers/members: It is hoped that the merger would enable members to streamline operations as they may need to comply with common rules/norms for registration with the merged regulator. In addition to reducing cost of compliance, this move could also result in fungibility of client margins, allowing the broker/member to better serve hedgers/investors who would typically be participants in both the equity and commodity markets.

4) Give penal power to the merged regulator; thereby curbing 'Dabba' trading: Following the merger, crackdown on off-market 'Dabba' trades could be more marked resulting in a gradual shift of business to commodity exchanges.

Weaknesses:

1) Non-rationalisation of CTT implies that Indian commodity exchanges remain price-takers: Despite path-breaking regulatory changes and a conducive policy framework, the commodities transaction tax (CTT) remains unchanged. India and Taiwan are the only two countries globally to have this tax. Due to CTT, Indian commodity exchanges would continue to remain price takers even in non-agricultural commodities where India's physical market demand remains the highest globally (that is, Gold).

Opportunities:

1) Enables commodity exchanges to launch complementary products: The merger could allow commodity exchanges to launch complementary products such as currency derivatives, subject to regulatory approval. This is of particular relevance to hedgers/investors who transact in non-agri commodity products, which have global pricing benchmarks (and hence currency risks).

2) Easing foreign ownership restrictions: Along with the merger, foreign investment restrictions too have been eased. The Union Budget proposed to do away with the distinction between different types of foreign investments such as foreign portfolio investment and foreign direct investment, which has subsequently been implemented. Such a move would permit greater participation of foreign investors in India's commodity exchanges. This is likely to result in greater transparency and accountability of Indian exchanges.

Threats:

1) Escalating competition: The merger could lead equity exchanges to launch commodity exchanges. The Bombay Stock Exchange has already announced plans to setup a commodity exchange, which could increase competition.

2) Curbs on algorithmic trading: The SEBI is mooting restrictions on algorithmic trading to curb market manipulation. Algorithmic trading contributes around 30-40% of traded value on exchanges, which is essential for liquidity in the market. While commodity exchanges have stringent margin requirements and price fluctuation limits, curbs on algorithmic trading could reduce market liquidity.

Other emerging positive factors

• GIFT City potential could provide a more conducive environment for exchanges: The government has envisaged Gujarat International Finance Tec-City (GIFT city) as a hub for global financial services firms. For GIFT City, the government could develop a liberal policy framework for exchanges to be competitive with other global International Finance Centres. This could mean easing of ownership restrictions, no CTT, foreign institutional participation etc. Indian commodity exchanges could capitalize on this opportunity by 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 investors in the GIFT City.

• Make In India: India's large physical market size coupled with the government's focused approach towards making in India brsents commodity exchanges an interesting opportunity to grow business. Increased manufacturing activity could result in increased commodity exposure among Indian corporates, which will require to be hedged. This could be done on Indian commodity exchanges, which can launch relevant products.

Critical Accounting Policies

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 which are deemed to be applicable as per Section 133 of the Companies Act, 2013 ("the 2013 Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the 2013 Act, as applicable. The financial statements have been brpared on accrual basis under the historical cost convention.

Internal control systems and their adequacy

Internal control systems and their adequacy is provided in the Directors Report.

Financial Position and Result of Operations

Revenue

The Company derives its revenues from transaction fees, admission fees, annual subscription fees, terminal charges, connectivity income, interest income, dividends from and gains on sale of investments, and other miscellaneous income.

During FY2014-15, the Company reported a total income of Rs. 3,322.71 million, against a total income of Rs. 4,399.36 million in FY2013-14. The Company continued to perform well during the fiscal with a net profit margin of 38 per cent. The operating expenses decreased from Rs. 1,949.34 million in FY2013-14 to Rs. 1,349.11 million in FY2014-15, registering a decline of 31 per cent.

The profit before tax for the FY2014-15 was Rs. 1,700.54 million, as against Rs. 2,096.43 million in the last financial year, registering a decline of 19 per cent. During FY2014-15, the profit after tax declined by 18 per cent to Rs. 1,250.53 million, as against Rs. 1,527.57 million in FY2013-14.

The Company operates in a single segment business. Transaction fees comprise a significant portion (approximately 58 per cent) of the Exchange's revenue. The transaction revenue during FY2014-15 was Rs. 1,911.01 million, as against Rs. 3,053.24 million in the brvious fiscal, mainly on account of the decreased turnover due to lack of volatility in the commodities market and continuation of Commodity Transaction Tax. The Company continued deployment of surplus funds in high performing assets such as mutual funds and fixed deposits. The investment income was Rs. 1,022.43 million in FY2014-15 (Previous year : Rs. 941.24 million)

Expenses

The Company's expenditure consists of operating and other expenses, interest and debrciation/amortisation charges

Other expenses principally comprise costs/charges pertaining to software support charges, communication expenses, advertisement, repairs and maintenance-others, license fees, legal and professional charges, etc.

Provision for taxation

The Company's provision for tax decreased by 21 per cent to Rs. 450.01 million during FY2013-14 from Rs. 568.86 million in the last fiscal.

Profit analysis

The net profit margin stood at 38 per cent in FY2014-15.(Previous year : 35%)

Shareholders' Funds Share capital

As of the March 31, 2015, the Company's share capital stood at Rs. 509.99 million, i.e., 50.99 million shares of Rs. 10 each. (Previous year : Rs. 509.99 million)

Reserves & surplus

The Company's reserves and surplus increased to Rs. 11,511.78 million as on March 31, 2015 from Rs. 10,930.99 million as on March 31, 2014.The net worth (including SGF) stood at Rs. 13,892.93 million as on March 31, 2015 as against Rs. 13,160.97 million as on March 31,2014.

Secured loans

The Company had no secured loans in its books as on March 31, 2015 (It had no secured loans in the brvious year also).

Fixed assets

The Company's fixed assets stood at Rs. 1,451.02 million as at March 31, 2015, as against Rs. 1,735.26 million as at March 31, 2014.

Pursuant to Companies Act, 2013 ('the Act') being effective from 1 April, 2014, the Company has revised debrciation rates on certain fixed assets as per the useful life specified in 'Part C' of Schedule II of the Act. In respect of assets whose useful life is already exhausted as on 1 April, 2014, debrciation of Rs. 87.55 million (net of tax impact of Rs. 29.76 million) has been adjusted in the Retained Earnings, in accordance with the requirements of Schedule II of the Act. Consequent to the applicability of the Companies Act, 2013 with effect from 1 April, 2014 debrciation for the year ended 31 March, 2015 charged to the Statement of Profit and loss is higher by Rs. 28.55 million for the assets, whose useful life continues beyond 1 April, 2014.

Investments

As on March 31, 2015, the Company's investments (Non - current and Current) stood at Rs. 12,926.53 million, as against Rs. 10,898.19 million as on March 31,2014.

Current assets and current liabilities

The current assets (excluding current investments) was Rs. 3,482.92 million in FY2014-15, as compared to Rs. 4,513.27million in FY2013-14.

The current liabilities consisting of creditors, trading margins from members, security deposits, and others, stood at Rs. 4,006.82 million in FY2013-14, as against Rs. 3,805.28 million during the brvious fiscal.

In accordance with various FMC Circulars relating to SGF, the Company has transferred settlement related penalties (net of tax) Rs. 5.98 million and income from earmarked Investments (net of tax) Rs. 162.25 million to SGF, further there was an outgo of Base Minimum Capital of Rs. 17.06 million from SGF during the FY 2014-15.Accordingly, the SGF Cash balance was Rs. 1,871.16 million as at March 31, 2015 (Rs. 1,719.99 million as at March 31, 2014).

Human Resources

As of March 31, 2015, the Company had a total of 284 permanent employees (excluding trainees, consultants and contract staff) based at its offices in Mumbai and other cities across India.

Material Developments after the Balance Sheet date

The material developments after the Balance Sheet date have been elaborated in the Directors' Report at respective sections.

CAUTIONARY STATEMENT

In our report we have disclosed some future developments expected to take place soon so that investors can better understand the Company's future prospects and make informed decisions while interacting with the Exchange. This annual report and other written and oral statements that we make from time to time may contain such forward looking statements that set out anticipated results based on management's plans and assumptions. We have tried wherever possible to identify such statements by using words such as 'anticipate', 'estimate', 'expects', 'projects', 'intends', 'plans', 'believes', and words and terms of similar substance in connection with any discussion on future operations or financial performance. We cannot guarantee that any forward-looking statement will be realised, although, we believe, we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should 'known' or 'unknown' risks or uncertainties materialise, or should the underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.