DIRECTORS' REPORT

Dear Shareholders,

The Board of Directors is pleased to present the Thirteenth Annual Report on the business and operations of your Company along with the Audited Statement of Accounts and the Auditors' Report for the financial year (FY) ended March 31, 2015.

RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS

Your Company, India's leading commodity futures exchange, offers a neutral, secure and transparent online trading, clearing & settlement of commodity futures transactions, thereby providing price discovery mechanism and enabling price risk management through scalable technology platform framework. There was no change in the nature of business of your Company during the year under review. Your Company enjoys a competitive edge due to its domain expertise, experienced leadership team, step ahead in innovation & product mix, multiple domestic and international alliances and robust business model with extensive reach of 1,792 members having 48,999 Authorised Persons, operating through 486,770 terminals including Computer to Computer Link (CTCL) across 1,879 cities/towns across India as at March 31, 2015.

Your Company, during the year under review, continued to retain a market share of over 80 percent in terms of the value of commodities futures traded. The total turnover of commodity futures traded on your Exchange stood at Rs. 51,837.07 billion in FY 2014-15 as against Rs. 86,114.49 billion in the previous fiscal. The number of contracts traded on your Exchange in FY 2014-15 stood at 148.58 million as compared with 214.20 million in FY 2013-14. The average daily turnover stood at Rs. 203.28 billion in FY 2014-15 as compared with Rs. 277.79 billion in FY 2013-14.

MCX crude oil futures, MCX silver micro futures, MCX natural gas futures and MCX silver mini futures were among the top 20 commodity futures & options contracts in the global ranking of commodity futures contracts in CY 2014 (Source: FIA Annual Volume Survey March 2015). During April 2014, for regulatory reasons, six futures contracts in gold and variants of silver expiring in 2015 were discontinued. Additionally, Members were required to square off their open positions in three contracts - Gold February 2015, kapas March 2015 and kapas April 2015. All these contracts were subsequently reintroduced for trading with effect from October 2014 after receipt of regulatory approval from Forward Markets Commission (FMC).

Your Company, with an unflinching focus, withstood its test of time and proved its resilience successfully encountering the uncertainty that prevailed with regard to its contracts launch calendar for 2015 entailing compliance of FMC's order dated December 17, 2013 and negotiating / revising the terms of the Technology agreement with Financial Technologies (India) Limited (FTIL).

Your Company re-negotiated its Technology agreement with FTIL by entering into Master Amendment to Principal Agreements (hereinafter referred to as 'Supplementary Agreement') on more equitable terms effective July 01, 2014 thereby, inter alia, reducing its technology costs i.e. lowering fixed & variable charges viz. lesser revenue share, more favourable payment terms, reduced tenure and a balanced exit clause. Further, FTIL, in compliance of the FMC's order dated December 17, 2013 of it being held as not a 'fit and proper person' to continue to be a shareholder of 2% or more of the paid-up equity capital of your Company, sold its entire stake (26%) held in your Company between July-September 2014. In addition to other entities, Kotak Mahindra Bank Limited (KMBL) acquired 15% equity stake in the Company from FTIL. Consequent to renegotiation and execution of the Supplementary Agreement and divestment of stake by FTIL, FMC accorded its approval for continuous contracts launch calendar for the futures contracts expiring in the year 2015 and onwards.

For the year ended March 31, 2015, your Company's total income (standalone) stood at Rs. 3,322.71 million as compared to Rs. 4,399.36 million during the last fiscal mainly attributable to continuation of Commodities Transaction Tax (CTT), fall in prices of key commodities traded on your Exchange and rising interest in other asset classes. The operating income during the year under review was Rs. 2,224.86 million as against Rs. 3,406.67 million in FY 2013-14. Other income during FY 2014-15 was Rs. 1,097.85 million as against Rs. 992.69 million in the previous fiscal. The net profit after tax for the year ended March 31, 2015 stood at Rs. 1,250.53 million as against Rs. 1,527.57 million in FY 2013-14. The net worth (including Settlement Gurantee Fund) as at March 31, 2015 stood at Rs. 13,892.93 million.

In continuation to the detailed analysis taken up by your Company pursuant to the Special Audit conducted of your Company, appropriate actions were initiated including legal and filing of recovery suits as it deemed fit. As a part of these actions, Rs. 112.07 million was recovered during the year ended March 31, 2015. The details of the same are more particularly covered in the Notes forming part of the financial statements. Further, during the year under review, your Company received summons under Section 131 of the Income Tax Act in relation to donation of Rs. 10 million given by it to a Trust during FY 2013-14, which has been responded to.

Pursuant to Companies Act, 2013 being effective from April 1, 2014, your Company revised depreciation rates on certain fixed assets as per the useful life specified in 'Part C' of Schedule II of the Act. The details of the same are more particularly covered in the Notes forming part of the financial statements.

During the year under review, your Company filed nine compounding applications seeking compounding of offence under Section 621A of the Companies Act, 1956, with Registrar of Companies, Mumbai, Maharashtra against the Show Cause Notices received. Your Company subsequently received Notices for hearing from the office of the Regional Director, Western Region for four applications and represented itself at the hearing on July 2, 2015. Your Company has received an Order in respect of one such application made under Section 193 of the Companies Act, 1956. The status as at March 31, 2015 is included in the Extract of the Annual Return.

PROPOSED REGULATORY CHANGES (SEBI - FMC MERGER)

Presently, commodity futures exchanges are regulated by FMC under the Ministry of Finance, Government of India. As proposed in the Union Budget 2015, FMC will be merged with the Securities and Exchange Board of India (SEBI). SEBI at its Board meeting held on August 24, 2015 approved the draft amendment to the regulations to be notified on September 28, 2015 pursuant to the proposed repealing of the Forward Contracts Regulation Act, 1952 (FCRA) making way for the said merger. These regulations will enable functioning of the commodities derivatives market and its brokers under SEBI norms and integration of commodities derivatives and securities trading in an orderly manner. This merger would involve several regulatory and structural changes and is likely to bring convergence in the regulation of various financial markets such as securities, currency derivatives and commodities. In the future, the merger could facilitate exchanges and intermediaries to penetrate into each other's liquid market segments and thus could allow commodity exchanges to launch complementary products such as currency derivatives, etc. Going forward, institutions like FIIs, Banks, Mutual Funds may also be allowed to enter commodity futures market. This merger could further boost the regulatory oversight as SEBI has power to raid, search, impose penal fines and take criminal action and thus, can effectively curb the illegal 'Dabba' trading.

Another important policy change proposed is the repeal of the FCRA and the placing and definition accorded to 'commodity derivatives' under the Securities (Contracts) Regulation Act, 1956 (SCRA). This legal change could facilitate introduction of new products such as options and indices, and products on weather and freight, etc. A detailed analysis with respect to the same is covered under the sections 'Initiative and Outlook' and 'Management's Discussion and Analysis'.

PARTICULARS UNDER SECTION 9(2) OF THE FORWARD CONTRACTS (REGULATION) ACT, 1952 READ WITH RULE 12 OF THE FORWARD CONTRACTS (REGULATION) RULES, 1954

In terms of the provisions of Section 9(2) of the FCRA read with Rule 12 of the Forward Contracts (Regulation) Rules, 1954, commodity exchanges are required to include certain particulars in their Annual Reports. These particulars for your Company are presented as Annexure I to Annexure VIII to the Directors' Report.

COMPLIANCE WITH THE REVISED NORMS REGARDING SHAREHOLDING, OWNERSHIP, NETWORTH, FIT AND PROPER CRITERIA ETC. OF THE NATIONWIDE MULTI COMMODITY EXCHANGES

1. Your Company is governed by the 'Revised Norms Regarding Shareholding, Ownership, Net Worth, Fit and Proper Criteria etc. of the Nationwide Multi Commodity Exchanges (NMCEs) dated May 06, 2014 (hereinafter referred to as Shareholding Norms), which, inter alia, stipulates that in the event of any person ceasing to be a 'fit and proper person' or being declared so by FMC, such person shall forthwith divest its shareholding. FMC vide its order dated December 17, 2013, inter alia, held that FTIL was not a 'fit and proper person'. Pending implementation of the aforesaid order, the contract launch calendar of your Company for 2015 was kept in abeyance.

Your Company took various steps to comply with the aforesaid order including amendment to its Articles of Association to incorporate matters as mentioned above, entering into Supplementary Agreement with FTIL etc. Consequent to such effective steps taken by your Company, FTIL divested its entire stake (i.e. 26%) in your Company by September 29, 2014 and complied with the aforesaid FMC order and the Shareholding Norms enabling FMC to grant its approval for continuous contracts launch calendar for the futures contracts expiring in the year 2015 and onwards in 27 contracts.

2. In accordance with FMC letter dated August 26, 2014 conveying approval to KMBL for its acquisition up to 15 percent of equity share capital of MCX, KMBL holds 14.99 percent stake in the Company as at the date of this Directors Report.

RISK MANAGEMENT AND RISK MANAGEMENT POLICY

As a part of risk mitigation plan, your Company has focused on ensuring uninterrupted services by strengthening its technology infrastructure so that there is no single point of failure. Your Company has Disaster Recovery (DR) Site at New Delhi which is at a different seismic zone than that of the primary data center. Your Company has also strengthened its

BCP-DR initiative and conducted regular mock drills to test readiness and effectiveness of IT infrastructure at the DR site. Further, your Company is in the process of upgrading the DR site infrastructure and also setting up a proximate DR site at Mumbai to achieve zero data loss in case of any eventuality. Some of the risks and their impact on your Company's business are highlighted in the Management's Discussion and Analysis section appended to this Report.

Further, in terms of the Revised Norms for Constitution of the Board of Directors, Committees, Nomination and Role of Independent Directors, Appointment of Managing Director/Chief Executives, etc at the Nationwide Multi Commodity Exchanges dated June 11, 2014 (hereinafter referred to as FMC Board Guidelines), your Company re-constituted its Risk Management Committee for, inter alia, identification, measurement and monitoring of the risk profile of the Exchange. The said Committee as on the date of this Directors' Report comprise of one independent director, two shareholder directors and one independent external expert. The constitution of the said Committee as at March 31, 2015 is covered in Annexure I to the Directors' Report.

Your Company revised its Risk Management Policy, which was approved by the Board at its meeting held on August 26, 2015, in accordance with the aforesaid guidelines for managing its risk profile including business risk, default risk, settlement risk, market risk, legal risk, operational risk, technological risk and delivery risk.

INVESTOR (CLIENT) PROTECTION FUND (IPF)

Your Company has established an IPF Trust to protect and safeguard the interests of investors (clients), in respect of eligible/legitimate claims arising out of default by any Member of the Exchange and to impart investors (clients) education, awareness, research or such other programmes as may be seceded by FMC and/or your Company from time to time out of the interest earned on investments of the Fund. As on March 31, 2015, the IPF corpus stood at Rs. 740.22 million.

FMC vide its letter dated January 13, 2014 advised your Company to disclose in its financial statements, IPF Trust as a related party and details of such transactions as per Accounting Standard - 18 (AS-18). Accordingly, the necessary disclosures are contained in the financial statements of your Company.

SETTLEMENT GUARANTEE FUND (SGF)

Pursuant to FMC circular dated March 14, 2014 with respect to the SGF, stress tests are required to be performed to determine the adequacy of the balance in SGF at the end of the year. Accordingly, based on the stress tests performed, the balance in SGF at the end of the FY 2014-15 was determined to be adequate and hence no contribution to SGF has been made during the year under review.

Further, pursuant to the directions of FMC, settlement related penalties and fines amounting to Rs. 5.98 million (net of tax) and income of Rs. 162.25 million (net of tax) earned from earmarked SGF investments were credited to the SGF during the year. Accordingly, the cash component of SGF stood at Rs. 1,871.16 million as at March 31, 2015 after effecting the aforesaid transfers and refund of Base Minimum Capital of Rs. 17.06 million during the year, in accordance with the directives issued by FMC.

WAREHOUSING

Your Company is operating with a sole Warehouse Service Provider (WSP) viz. Sohanlal Commodity Management Private Limited. In compliance with FMC guidelines in this regard, the norms and process for empanelment as WSP were put up on the website of your Exchange and an advertisement was issued on February 19, 2015 calling for applications to act as WSP. Subsequently, M/s Origo Commodities Private Limited and Yamada Logistics Private Limited were empanelled as WSPs to the Exchange after approval by the Risk Management Committee. The FMC also issued a directive that all warehouses accredited by the Exchanges should be registered with the Warehousing Development and Regulatory Authority (WDRA) by June 30, 2015, timeline for which is now extended to October 31, 2015. Your Company is thus preparing to get all its warehouses registered with WDRA within the timeline stipulated.

SHARE CAPITAL

There was no change in the share capital of your Company during the year under review. As on March 31, 2015, the paid up share capital of your Company stood at Rs. 509.99 million comprising 50,998,369 equity shares of Rs. 10 each fully paid.

Your Company has not issued any equity shares with differential voting rights during the year. Further, your Company has, during the year under review, not issued any shares (including sweat equity shares) to employees of your Company under any scheme save and except pursuant to the Employee Stock Option Scheme (ESOP 2008) referred to in this Report.

TRANSFER TO RESERVES

Your Directors propose to transfer Rs. 125.05 million to the General Reserve. An amount of Rs. 7,698.43 million is proposed to be retained as Surplus in the Statement of Profit & Loss account under the broad heading 'Reserves and Surplus'

DIVIDEND

After considering your Company's profitability, your Directors have recommended, for the financial year ended March 31, 2015, a dividend of Rs. 10 per equity share on a face value of Rs. 10 per share, aggregating to Rs. 509.98 million, subject to the approval of shareholders at the ensuing Annual General Meeting.

The total appropriation on account of the final dividend (if approved) and corporate tax on dividend thereon would be Rs. 611.95 million. The dividend will be tax-free in the hands of the shareholders.

AMENDMENT TO MEMORANDUM OF ASSOCIATION (MoA) AND ARTICLES OF ASSOCIATION (AoA)

Pursuant to the approval of the Members through postal ballot, the object clause of the Memorandum of Association was amended and new articles viz. Article 26A, Article 26B and Article 26C after Article 26 were inserted in the Articles of Association of your Company. On receipt of approval of FMC, the same was published in the Official Gazette of India and effective thereon.

DEPOSITS

Your Company had not invited any deposits from the public, and as such, no amount of principal or interest related thereto was outstanding as on the date of the Balance Sheet i.e. March 31, 2015.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Your Company has, during the year, not given any loans, guarantees or provided security and has not made any investments in any body corporate in excess of limits specified under Section 186 of the Companies Act, 2013. The investment in Metropolitan Stock Exchange of India Limited (MSEI/MSXI) (formerly known as MCX Stock Exchange Limited), consequent to the conversion of warrants into equity shares of MSEI, is detailed elsewhere in this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements, based on the financial statements received from subsidiaries and associates, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard - 21 (AS-21) - "Consolidated Financial Statements" and Accounting Standard - 23 (AS - 23) -"Accounting for Investments in Associates," in Consolidated Financial Statements as notified under the Companies (Accounting Standard) Rules, 2006. The details of which are more particularly covered in the Notes to Accounts.

SUBSIDIARIES AND ASSOCIATES

In accordance with Section 129(3) of the Companies Act, 2013, your Company has prepared consolidated financial statements of your Company and all its subsidiary companies, which is forming part of the Annual Report. The consolidated financial statements presented by your Company include financial information of its subsidiaries viz. Multi Commodity Exchange Clearing Corporation Limited (MCX CCL) and SME Exchange of India Limited (SME) and its associate viz. MCX SX Clearing Corporation Limited (MCX SX CCL). A report on the performance and financial position/ salient features of each of the subsidiaries and associate companies as per the Companies Act, 2013 is provided as Annexure IX to the consolidated financial statements and hence not repeated here for the sake of brevity.

The consolidated financial statements prepared in accordance with Accounting Standard 21 - Consolidated Financial Statements issued by the Institute of Chartered Accountants of India and the Listing Agreement as prescribed by SEBI forms a part of this Annual Report, and are reflected in the consolidated accounts of your Company.

During the year under review, there have been no companies which have become or have ceased to be the subsidiaries or associate companies of your Company. Further, neither the Managing Director & CEO nor the Whole-time Directors of your Company receive any remuneration or commission from any of its subsidiaries.

Subsidiaries:

MCX CCL: MCX CCL, a wholly-owned subsidiary of your Company, was set up for the purpose of having a separate clearing house to provide services such as clearing and settlement of trades and guaranteeing counterparty risk. As on date, MCX CCL has not commenced business, pending the proposed regulatory changes; and its present paid-up capital is Rs. 60 million.

SME: SME, subsidiary of your Company with paid-up capital of Rs. 1 million, was set up to provide a platform for transacting, clearing and settlement of trades in Small and Medium Enterprises segment, but has not commenced its business since incorporation and has no possibility of commencing its business in the foreseeable future. On recommendation of its Board; its Members have approved its voluntary winding up and a Liquidator has been appointed for winding up of SME. Accordingly, in the consolidated financial statements, SME's accounts have been consolidated only up to January 21, 2015, being the cut-off date for the voluntary winding up of SME.

Associate:

MCX SX CCL: MCX SX CCL, subsidiary of MSEI and an associate of your Company as per Accounting Standard-23, is a clearing corporation constituted for the purposes of clearing and settlement of trades done on MSEI, a recognized stock exchange. Further details relating to MCX SX CCL are covered in 'Material changes and commitments' section of this Annual report.

In accordance with Section 136(1) of the Companies Act, 2013, the financial statements including consolidated financial statements and all other documents required to be attached thereto and the audited annual accounts of each of the subsidiary companies has been placed on the web link of your Company viz. www.mcxindia.com/IR/annual_report.htm . Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company's registered office. Copies of the annual accounts of your Company and of its subsidiary companies would be kept at the registered office of your Company for inspection by any shareholder.

MANAGEMENT'S DISCUSSION AND ANALYSIS STATEMENT

Management's Discussion and Analysis Statement, as stipulated under the Listing Agreement, forms a part of this Annual Report.

INITIATIVES AND OUTLOOK

A few policy announcements made during the year have far-reaching implications for your Company in providing growth opportunities. The Union Budget 2015-16, and the subsequent passage of the Finance Bill 2015, provided for the merger of FMC with SEBI. The much-awaited strengthening of the regulatory structure of India's commodity derivatives market would get a boost with this merger, a policy action which your Company has been strongly advocating for long. Besides, under the provisions of the Finance Act, 2015, commodity derivatives have been brought under the ambit of the SCRA, and accordingly, commodity derivatives have been re-defined in a manner which is wider in scope than that which exists in the FCRA. Moreover, all recognized associations under the FCRA shall be deemed to be recognized stock exchanges under the SCRA, effective from the date of notification of the merger. Thus, subject to regulatory approval, your Company can launch new types of products, such as options and indices, as and when there is a need for them.

Another policy initiative with the potential to bestow significant gains to the commodity derivatives market is the proposed Goods and Services Tax (GST). Currently, a plethora of indirect taxes by the states and the Centre are imposed on the commodity markets, rendering it inefficient, with a cascading effect on the cost of participation. Besides, the multiplicity of state-specific taxes also imposes artificial barriers to inter-state movement of commodities, which means that decisions on warehouse construction, storage and choice of market yard for sale depend largely on relative tax rate advantages across states, rather than on pure economic rationale. By removing the inter-state tax arbitrage, GST would hopefully integrate India's commodity markets, making them more efficient and paving the way for a national market for commodities, as envisaged in the Economic Survey, 2014-15. An efficient physical market for commodities can act as a catalyst for faster and inclusive growth of the corresponding derivatives market.

Your Company is committed to explore and exploit all opportunities for unlocking the full potential of the Indian commodity derivatives market. Although this market and MCX have grown over the years, your Company has a long way to go to realize its potential. One way to measure the potential of your Company is the 'futures multiplier' of different commodities.

Futures multiplier of a commodity refers to the ratio in volumes in the futures market to the size of the physical market of that commodity. A comparison of the futures multiplier of MCX with that of the global benchmark exchange in the respective commodities (see Table 1) brings out the great untapped potential of your Company.

During the year, your Company was allowed to launch 27 futures contracts expiring in 2015 and thereafter, with the existing specifications as approved by the FMC. With the approval of the FMC, your Company commenced futures trading in Crude Oil Mini contract during the year. There has been a growing demand from the industry, especially the SMEs, for a crude mini contract to enable them to hedge their energy price exposures. Launched on January 6, 2015, the Crude Oil Mini contract has been facilitating price discovery and price risk management for SMEs, small traders, manufacturers, and physical market participants, especially those from industries like petrochemicals, glass manufacturing, textiles, heat treatment and plastic processing which consume a fairly large amount of crude oil by-products. Moreover, given the very large number of crude oil derivatives, such as bitumen, furnace oil, asphalt, and naphtha, which are fully de­regulated and have their prices in sync with crude oil prices are widely used by a large number of SME units. In fact, the Crude Oil Mini contract has been of immense use to these SMEs as figures prove it—consistently healthy volumes and open interest.

On July 14, 2015, your Company launched its unique and innovative futures contract, Gold Global, further expanding its bullion product suite. Gold Global is an international-price-based contract, exclusive of customs duty, sales tax/ VAT and domestic market premium, among others. The contract has been designed for refiners, exporters, jewellers including larger bullion physical market participants involved in import of gold bars and re-export of jewellery. These stakeholders, having significant exposure to international gold prices, need to effectively hedge against any adverse movement in global prices.

Your Company took a number of measures to respond to evolving market dynamics and demands of its stakeholders. With permission from FMC, your Company introduced last-traded-price (LTP)-based calendar spread trading for futures contracts in a number of commodities from April 1, 2015.

On July 21, 2015, your Company signed a Memorandum of Understanding (MoU) with the CME Group, the world's leading and most diverse derivatives marketplace, on various areas of cooperation and potential business opportunities including a joint viability study of setting up operations in an International Financial Service Centre in India. This MoU also includes the establishment of a joint working group to explore opportunities to develop and market new products and services for the U.S. and Indian markets, as well as collaboration on customer education.

Further, on August 25, 2015, your Company and GIFT SEZ Ltd., a wholly owned subsidiary of Gujarat International Finance Tec-City Company Ltd. (GIFTCL) at GIFT City, Gandhinagar signed an MoU for developing 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 international investors in GIFT SEZ-IFSC.

Policy Initiatives:

During the year, FMC undertook various policy measures to improve market transparency and accessibility and to protect the interests of the clients. Some such measures are listed below:

• Revised Norms regarding Shareholding, Ownership, Net Worth, Fit and Proper Criteria etc. of the Nationwide Multi Commodity Exchanges (NMCEs).

• Revised Norms regarding Constitution of the Board of Directors, Committees, Nomination and Role of Independent Directors and appointment of Chief Executives at the Nationwide Multi Commodity Exchanges.

• All penalties levied and collected by exchanges, except the settlement related penalties which include delivery default penalties, were made part of the Investor Protection Fund after deducting the cost of administration.

• NMCEs allowed executing modifications on their own in futures contract specifications related to some specific parameters.

• Detailed guidelines issued on electronic contract notes (ECN).

• A master circular issued on the prevention of money laundering and for combating financing of terrorism—as laid down under the Prevention of Money Laundering Act, 2002.

• Uniform norms issued regarding net worth, ownership, corporate governance, audit, etc. for Warehouse Service Providers (for agri and agri processed commodities) who wish to be accredited with NMCEs.

• To ease the operational and practical difficulties faced by members and clients, members asked to settle accounts of their clients once every six months instead of three months.

• Spread margin benefits on initial margins on spread positions increased from 50% to 75%.

• NMCEs are mandated to disclose on their website information such as the hedge position allocated to various hedgers, the delivery intent of the hedgers, pay-in / pay-out of commodities made by top 10 clients including hedgers, etc.

COMMITMENT TO QUALITY

With a quest to achieve excellence in products and services offered, your Company continues to monitor and maintain its effective and well-crafted Quality Management framework. This Quality framework is aligned to the business objectives of your Exchange, and ensures that your Company is focused on maintaining Quality Centric approach for its Members and Clients. Your Company is focused on continually improving its existing robust processes and quality services. Over the years, your Company has evolved mature processes, which assist in commendably reducing unpredictability across various business operations. Your Company successfully cleared the ISO 9001:2008 Surveillance Audit, after rigorous process audits across all its key operations. This showcases your Company's dedication and commitment towards sustaining a customer centric and robust Quality Management system.

In line with your Company's vision and commitment of ensuring Information Security and providing assurance to its stakeholders, your Company has developed and implemented simple, effective and robust processes and controls using latest international standard ISO/IEC 27001:2013 on Information Security Management System. It has also deployed a proactive Information Risk Management approach and carries out risk assessment activities on a periodic basis. This year, your Company underwent stringent information security related audits for its Information Security Management System and successfully achieved ISO/IEC 27001:2013 certificate.

AWARDS

Your Company was given the Exchange of the year award for Investors Education and Awareness by Commodity Participants Association of India (CPAI) on May 30, 2015.

ENVIRONMENTAL RESPONSIBILITY

Given the nature of your Company's operations, it has a very low impact on the environment. However, it is committed to further minimise its environmental impact through efficient use of natural resources, including electricity, which is the key touch point of the Exchange's technology-driven business. Your Company has an effective Environmental Policy and is governed by it. Your Company cleared the ISO 14001:2004 certification audit, and continues to monitor its Environment Management Plan, which is developed on the basis of the Environment Review conducted annually to assess the impact of the Company's activities. Your Company has also developed an e-waste policy for the safe disposal of e-waste from its premises in an eco-friendly manner.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Board constituted a CSR Committee at its meeting held on December 26, 2013 and the same has been re-constituted from time to time. During the year under review, the Board approved a Corporate Social Responsibility Policy charting out its CSR approach including but not limited to rural development, women and children empowerment, promoting education, health care, sanitation, environment conservation, etc. and the same is available on your Company's web link viz. URL: <http://www.mcxindia.com/IR/pdf/MCX_CSR_Policy.pdf>

The expenditure incurred on CSR activities for the financial year April 1, 2014 to March 31, 2015 under Section 135 of Companies Act, 2013 amounts to Rs. 5.33 million, as against Rs. 67.38 million, constituting 2% of the average net profits, required to be spent during the financial year. The reasons for not spending the prescribed amount are provided in Annexure X of this Report.

Your Company believes in inclusive growth and facilitating social change. Its flagship social inclusion project, Gramin Suvidha Kendra (GSK), seeks to include farmers in the modern commodity market ecosystem by enhancing their value realisation from agricultural activities. It is a single window service designed to empower small and marginal farmers with knowledge about market prices of the locally produced commodities and best practices for enhancing quality standards of their produce and making farming economically sustainable. Besides this, GSK aims to provide critical market linkages throughout the crop cycle, from pre-sowing to post-harvest stages, by collaborating with a host of partners.

As on March 31, 2015, the reach of this programme had grown to 36 centres, 517 branch post offices spanning 4 states (Maharashtra, Uttar Pradesh, Karnataka and Gujarat), 1603 villages and 33,360 registered farmers. More than 2600 new farmers were registered as members of the programme in FY 2014-15. Moreover, two new GSK were launched in association with CAIRN India Limited in Gujarat namely, Tankara and Paddhari centre. However, your Company has discontinued the GSK activities in Karnataka since April 2015.

Your Company has actively started implementing and monitoring the CSR activities, and has approved project for providing infrastructure for schools, empowerment /training of women and youth, water shed programs, strengthening the GSK, etc.

In FY 2014-15, your Company undertook the following GSK activities:

• Farmer training and awareness programmes: Through these programmes agricultural experts from different agricultural universities and Krishi Vigyan Kendras discussed and helped resolve the problems related pre and post-harvest crop related issues of farmers to various crop cycle stages of locally grown crops and created awareness about sustainable agriculture practices. The GSK, in collaboration with FMC and other partners, conducted 375 farmer training and awareness programmes.

• Exposure visits: To provide farmers with knowledge on productivity, quality management, crop diversification, marketing, newly developed seed varieties and other valuable agricultural information, exposure visits were organized to different agriculture colleges, universities, Krishi Vigyan Kendras, Krishi Melas, etc. During the fiscal, 21 exposure visits were conducted.

• Kitchen garden initiative: For empowering women, the Company through this initiative helped around 300 women farmers across 12 centres in Gujarat, Uttar Pradesh and Maharashtra to earn supplementary income from agricultural activities. With 60 per cent one-time contribution from MCX, GSK has been empowering women farmers in financial decision making with respect to agriculture.

• Soil testing initiative: To assess soil fertility and recommend suitable and economic nutrient doses through chemical fertilisers and organic manure for different crops and cropping systems, the soil testing process was initiated at 5 GSKs of Gujarat and 255 farmers were benefitted from this initiative.

• Drip Irrigation System: To promote farm water management among farmers, GSK collaborated with different government departments to implement the Drip Irrigation System with 25 small and marginal farmers of Gujarat.

• Deepening/Renovation of Dug well: The Dug Well intervention initiated on a pilot basis in 2014-15 is the most effective in terms of its success, in providing water for irrigation and domestic requirements for household consumption and for livestock needs and promotes household livelihood security. This initiative has presently benefitted 5 farmers across two GSKs of Gujarat.

• Floriculture Initiative for small and marginal farmers: To increase the household income, GSK promoted floriculture for the first time with 5 farmers across two GSKs of Uttar Pradesh.

• Bio Digester toilet: To promote preventive health care and improving sanitation at schools and to create awareness on health and sanitation among students in rural areas, your Company initiated installation of Bio digester toilets (a decomposition mechanised toilet system which is total maintenance-free and does not require any sewage) at 6 different schools in Gujarat. Your Company intends to broaden this initiative by further installing Bio digester toilets at various schools.

The CSR policy is in line with the activities mentioned in the Schedule VII of the Companies Act, 2013. The details of CSR activities and report under Section 135 of the Companies Act, 2013, forms part of this Report as Annexure X.

The CSR Committee constituted by the Board comprise of Mr. Dinesh Kumar Mehrotra, Mr. R. Amalorpavanathan and Mr. M.A.K. Prabhu, Directors as on the date of this report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of your Company pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is attached as Annexure XI to this Report.

CORPORATE GOVERNANCE

Your Company continues to be committed to good corporate governance aligned with the best corporate practices. The report on Corporate Governance — stipulated by Clause 49 of the Listing Agreement — and certificate from a Practicing Company Secretary regarding compliance with Corporate Governance norms, forms part of this Annual Report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013.

MEETINGS OF THE BOARD

Fourteen meetings of the Board of Directors were held during FY 2014-15. For further details, please refer report on Corporate Governance forming part of this Annual Report.

ETHICS AND GOVERNANCE POLICIES

Your Company adheres to ethical standards to ensure integrity, transparency, independence and accountability in dealing with all stakeholders. Accordingly, your Company has adopted various codes and policies to carry out the duties in an ethical manner. Some of these codes / policies framed and implemented by your Company are Code of Conduct

and Code of Ethics, Code of Conduct for Prohibition of Insider Trading, Whistle Blower Policy /Vigil Mechanism, Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions, Policy for determining Material Subsidiaries, Corporate Social Responsibility Policy, Risk Management Policy, Nomination and Remuneration Policy, Policy for appointment of Independent External Persons on Committees of the Board and Board diversity policy.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors have implemented a vigil mechanism through the adoption of Whistle blower Policy. For further details, please refer report on Corporate Governance forming part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The policy on materiality of related party transactions and dealing with related party transactions as recommended by the Audit Committee was approved and adopted by the Board at its meeting held on February 13, 2015. The same is available on the website of your Company under the web link: www.mcxindia.com/IR/pdf/Policy_on_Related_Party_ Transactions.pdf

All related party transactions entered into by your Company with other than the erstwhile promoter/promoter group are in the ordinary course of business and at arm's length pricing basis.

With respect to the transactions entered into by your Company in the earlier years with the erstwhile promoter/ promoter group, the same were considered to be in the ordinary course of business and at arm's length pricing basis as such transactions mainly related to proprietary software for your Company's specialized requirements and for which suitable alternative sources were not readily available for obtaining comparable quotations. Further, the continuing/ subsisting contracts/agreements/arrangements/transactions with FTIL or any of its subsidiaries, associates or otherwise, including negotiation/re-negotiation/modification/amendment thereon were approved by the shareholders at the Annual General Meeting held on September 23, 2014. Your Company re-negotiated and executed Master Amendment to Principal Agreements with FTIL in September 2014, effective July 01, 2014, wherein Technology Support and Managed Service Agreement stood revised/ amended for providing software support services and other IT infrastructure support.

All the related party transactions /financial commitments etc. entered into by your Company during the year under review, were placed and approved by the Audit Committee and/or by the Board, as applicable, in accordance with the Companies Act, 2013, Listing Agreement and the directions of FMC vide its letter dated December 26, 2013.

Further, the transactions with MCX Investor (Client) Protection Fund which has been considered to be a related party as per FMC Guidelines, are in accordance with FMC's Revised Guidelines for Investor Protection Fund at National Commodity Exchanges dated September 28, 2011, as amended from time to time.

During the year under review, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy of your Company on Materiality of Related Party Transactions. Accordingly, the disclosure of particulars of contracts / arrangements entered into by your Company with related parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your Company.

All related party transactions as required under AS-18 are reported in Note 28 of Notes to Accounts of the standalone financial statements and Note 29 of Notes to Accounts of the consolidated financial statements of your Company.

DIRECTORS

Your Company being a commodity futures exchange is, inter alia, regulated by FMC. As mandated by FMC Board Guidelines dated June 11, 2014, the appointment of all the Directors on the Board of your Company is with the approval of FMC.

MCX Annual Report 2014-15 I Directors' Report

As on the date of this Report, your Board comprises of 11 (eleven) Directors, of which four are Shareholder Directors and seven are Independent Directors viz. four FMC nominated Directors under Section 6(2)(b) of FCRA and three Exchange appointed FMC approved Directors.

In terms of the definition of 'Independence' of Directors as prescribed under Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013, your Company received confirmations from the respective Independent Directors to the effect that each of them meets the criteria of independence as prescribed therein. The nomination/ appointment of Independent Directors on the Board of your Company is also in accordance with the eligibility conditions prescribed by FMC.

Further, all the Directors have confirmed that they are 'Fit and Proper' in terms of the 'FMC Board Guidelines.' Your Company has also obtained affirmation of adherence to Schedule IV of the Companies Act, 2013 and the Code of Conduct of your Company in accordance with the Listing Agreement from all the Directors as applicable.

Consequent to the resignation of Dr. Manoj Vaish, Ex-MD & CEO on May 09, 2014 (who joined your Company on February 01, 2014), the Board assigned Mr. Parveen Kumar Singhal, the senior most executive of the Exchange to take care of the day to day affairs of the Exchange. Consequent to the approval of the shareholders and FMC, Mr. Singhal was co-opted as a Director and elevated as the Joint Managing Director w.e.f. October 14, 2014.

Your Company, in the process of the appointment of new MD & CEO, had published an advertisement and hired a head hunting firm, and, the Board at its meeting held on February 13, 2015, recommended the name of Mr. Balasubramanian Venkataramani as the MD & CEO of the Exchange, subject to the approval of FMC, shareholders and such other approvals as may be necessary. However, due to certain procedural deficiencies, the proposal for the appointment of Mr. Balasubramanian V. was not acceded to by FMC. Subsequently a new Selection Committee was constituted which was approved by FMC and accordingly your Company has re-initiated the process of selection of MD & CEO for filling the said position.

Ms. Pravin Tripathi was nominated as an Independent Director by FMC w.e.f. August 12, 2014 for a period up to March 31, 2017. Accordingly, your Company complies with the stipulation of appointing at least one Woman Director on the Board.

FMC vide its letter dated June 19, 2014 extended the term of Mr. G. Anantharaman, Independent Director till March 31, 2016. Consequent to the resignation tendered by Mr. Pravir Vohra, Independent Director, Mr. Vohra ceased to be a Director w.e.f. June 26, 2014.

Mr. S. N. Ananthasubramanian, nominated by FMC as an Independent Director, tendered his resignation vide letter dated July 28, 2014 which was accepted by FMC vide its letter dated August 01, 2014.

Consequent to Bank of Baroda and Corporation Bank divesting their entire stakes in your Company, Mr. Rajiv Abhyankar and Mr. P. Paramasivam ceased to be the Shareholder Directors w.e.f. June 26, 2014 and August 11, 2014 respectively, subsequent to withdrawal of their respective directorships. Further, Union Bank of India withdrew directorship of Mr. K. N. Reghunathan and accordingly Mr. Reghunathan ceased to be a Shareholder Director w.e.f. August 19, 2014.

NABARD withdrew the directorship of Mr. P. Satish w.e.f. July 4, 2014. Further, on NABARD's recommendation, the Board co-opted Mr. R. Amalorpavanathan as an Additional Director on August 18, 2014 whose term was up to the date of the last AGM.

The shareholders, at the previous AGM, approved the appointment of Mr. R. Amalorpavanathan, Mr. M.A.K. Prabhu, Mr. B.V. Chaubal and Mr. Ajai Kumar as Directors, subject to the approval of FMC. FMC vide its letter dated October 14, 2014 accorded its approval to their appointment as Shareholder Directors on the Board. Mr. B. V. Chaubal, Shareholder Director, thereafter resigned from the Board w.e.f. December 31, 2014 consequent to his retirement from State Bank of India.

Your Board had recommended appointment of Mr. Paul Parambi, nominee of KMBL as an Additional Director. However, FMC required your Board to re-examine such recommendation emphasizing certain questions pertaining to corporate governance, conflict of interest, market integrity and transparency of a regulated exchange. During the process of such re-examination, KMBL withdrew, for the time being, its nomination from the Board of your Company.

Consequent to the expiry of the term of appointment on March 31, 2015, Mr. Ravi Kamal Bhargava, Independent Director nominated by FMC, ceased to be a Director on the Board of your Company.

Subsequent to the extension of the term of Mr. Santosh Kumar Mohanty - Director in FMC, as an Independent Director to represent the Central Government for a period of one year w.e.f. September 1, 2014, FMC, in view of the impending regulatory changes decided to withdraw the nomination of Mr. Mohanty. However, in accordance with FMC letter dated May 11, 2015, Mr. Mohanty continued as a Director till such time new Independent Director was appointed. FMC, vide its letters dated May 19, 2015 approved appointment of Mr. Arun Nanda (DIN: 00010029) and Mr. Subrata Kumar Mitra (DIN: 00029961) as Independent Directors under Section 6(2)(b) of the FCRA for a period up to March 31, 2018. Accordingly, on their appointment, Mr. Mohanty ceased to be an Independent Director w.e.f. May 19, 2015.

On the recommendation of two names by the Board for being considered as Independent Director, FMC vide its letter dated December 04, 2014 conveyed its approval for the appointment of Mr. R. Ramanujam. However, Mr. R. Ramanujam conveyed his unwillingness to be appointed as a Director owing to his pre occupation. Thereafter, on the recommendation by your Board of the names of eminent persons, FMC vide letter dated August 03, 2015 conveyed its approval for the appointment of Dr. Govinda Rao Marapalli (DIN: 01982343) as FMC approved Independent Director up to March 31, 2018. Pursuant to Section 160 of the Companies Act, 2013, notice has been received from Dr. Govinda Rao Marapalli, Independent Director signifying his candidature for appointment along with the requisite deposit.

Pursuant to Section 10 (3) of the FCRA, FMC Board Guidelines, Section 149(4) and other applicable provisions of the Companies Act, 2013 read with the clarification issued by FMC vide its letter dated August 11, 2014, Mr. Dinesh Kumar Mehrotra, Mr. Arun Nanda, Mr. Subrata Kumar Mitra and Ms. Pravin Tripathi, Independent Directors nominated by FMC under Section 6(2)(b) of FCRA and Mr. Satyananda Mishra and Mr. G. Anantharaman, Exchange appointed FMC approved Directors, being Independent Directors are not liable to retire by rotation. In terms of the approval of shareholders at the last AGM, Mr. Mishra and Mr. Anantharaman hold office for a term up to March 31, 2016, or any extension of term up to March 31, 2019 that may be granted by the Regulator.

In accordance with the provisions of the Companies Act, 2013, Mr. R. Amalorpavanathan, retires by rotation but does not seek re-appointment. In respect of such vacancy caused, your Company has received a request from NABARD, member, recommending the name of Ms. Padma Raghunathan (DIN: 07248423), as a Director in his place along with the notice under Section 160 of the Companies Act, 2013 and the requisite deposit.

Further, notices proposing candidature for appointment as a Director along with the requisite deposits under Section 160 of the Companies Act, 2013 have also been received from three other members of the Company signifying their intention to propose the candidature of Mr. Hemang Raja (DIN: 00040769), Ms. Madhu Vadera (DIN: 00016921) and Mr. Amit Goela (DIN: 01754804). The Board at its meeting held on August 26, 2015 considered the aforesaid notices to be placed for the approval of the shareholders. The said appointments shall be subject to approval of sectoral regulator, if required. Brief profiles of the proposed candidates are included in the notice convening the AGM.

KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013, Mr. Parveen Kumar Singhal, Joint Managing Director, Mr. Sandeep Kumar Sarawgi, Chief Financial Officer and Mr. Ajay Puri, Company Secretary and Chief Compliance Officer were identified as KMP's during the year under review, who were in office on the effective date of commencement of the Companies Act, 2013. Further, Dr. Manoj Vaish, the then MD & CEO was also a KMP upto May 10, 2014.

PERFORMANCE EVALUATION OF THE BOARD AND THE EVALUATION CRITERIA

In accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with BSE Limited, your Company has formulated the criteria for performance evaluation of Individual Directors, Board Committees and the Board as a whole.

A statement indicating the manner in which formal annual evaluation of the Directors, the Board and Board Committees has been made and the criteria for the same are set out in Annexure XII to this Report.

AUDIT COMMITTEE

The composition of Audit Committee is covered under the Corporate Governance Report. During the year under review, there were no instances, where the Board had not accepted any recommendation of the Audit Committee.

STATUTORY AUDITORS

The Statutory Auditors, M/s. Shah Gupta & Co., Chartered Accountants (Firm Regn. No.109574W), appointed in casual vacancy caused by the resignation of erstwhile auditors, M/s. Deloitte Haskins & Sells L.L.P., Chartered Accountants, hold office up to the conclusion of the ensuing AGM and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment for a term of five consecutive years from the conclusion of this thirteenth AGM till the conclusion of the eighteenth AGM of the Company, subject to ratification of their appointment at every AGM. Your Company has received the consent from the Auditors and necessary certificate of their eligibility pursuant to Section 139(1) of the Companies Act, 2013 and Rules made thereunder.

AUDITORS' REPORT

M/s Shah Gupta & Co., Chartered Accountants, Mumbai (Regn. No. 109574W), have audited the accounts of your Company for FY 2014-15. The Auditors in their Report to the Members expressed a Qualified Opinion and Emphasis of Matter on the financial statements. This Qualified Opinion and Emphasis of Matter and the explanations by the Board with regard thereto are given below:

Auditors' Qualified Opinion

"As stated in Note 37, to the financial statements, the Management of the Company is of the view that the aggregate carrying amount of current investments in equity shares and warrants of Metropolitan Stock Exchange of India Limited (formerly known as 'MCX Stock Exchange Limited') and equity shares of MCX-SX Clearing Corporation Limited aggregating to Rs. 1,313.90 million (Previous year Rs. 1,375.71 million) which is equivalent to the cost of their acquisition, represents the fair value of these investments as on the balance sheet date.

In the absence of sufficient appropriate audit evidence to determine a fair valuation of the aforesaid investments at balance sheet date, we have not been able to validate whether the carrying amounts of these investments is the lower of cost and fair value as required by Accounting Standard 13 on Accounting for Investments. This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended March 31,2014.

The matter stated above could also have a consequential impact on the measurement and disclosures of information provided in the financial statements, in respect of, but not limited to, tax, profit for the year and shareholders' funds for the year ended March 31,2015"

Management Response, as given in Note 37 to the financial statements

(i) During the year, the Company converted 2,10,46,514 warrants of Metropolitan Stock Exchange of India Limited (MSXI) [(formerly known as'MCX Stock Exchange Limited (MCX-SX)] into equity shares. During the year the Company also sold 3,05,39,982 number of warrants. Accordingly, as at 31 March, 2015 the Company has investments in 482,11,514 (as at 31 March, 2014: 27,165,000) equity shares and 58,25,83,504 (as at 31 March, 2014: 634,170,000) warrants of MSXI and investments in 6,500,000 equity shares of MCX-SX Clearing Corporation Limited (MCX-SX CCL). These warrants are valid till 19 June, 2015 and each warrant entitles the Company to subscribe to one equity shares of MSXI at any time after six months from the date of issue of warrants. The warrants are freely transferable by endorsements and delivery. The warrants do not carry any dividend or voting rights.

(ii) Pursuant to SEBI Order dated 19 March, 2014, the Company has been directed by SEBI to divest its holding in both MSXI and MCX-SX CCL. The Company through various correspondence and vide its recent letters dated 30 April, 2015 and 4 May, 2015 has once again represented to SEBI that FTIL and the Company no longer act in concert, especially in view of the developments during the year, the Company may be permitted to hold up to 15% of the paid up capital of MSXI and be granted extension of time till 31 December, 2015 to hold its warrants.

(iii) In accordance with Accounting Standard 13 on "Accounting for Investments" and the Company's accounting policy, current investments are to be carried at the lower of cost and fair value in the Balance Sheet. Based on the latest available financial statements of these companies, the Management of the Company is of the view that the aggregate carrying amount of investments of Rs. 1,313.90 million which is equivalent to the cost of their acquisition represents the fair value of these investments as at 31 March, 2015.

Auditors' "Emphasis of Matter"

"We draw attention to the following matter in the Notes to the Financial Statements:

As stated in Note no. 35 to the financial statements, in accordance with the directions of the Forward Markets Commission (FMC), a special audit of the Company was carried out by an external agency for the period since inception of the Company to September 30,2013. The Management of the Company has taken appropriate action including legal and filing of recovery suit as deemed fit. This matter was qualified in the report of the predecessor auditors on the financial statements for the year ended March 31,2014. Our opinion is not qualified in respect of this matter."

Management Response, as given in Note 35 to the financial statements

In accordance with the directions of the Forward Markets Commission (FMC), a Special Audit of the Company was carried out for the period since inception of the Company to 30 September, 2013. The terms of reference, inter alia, included identification of related parties (as defined by FMC in the terms of reference and a working definition arrived at for the purpose of the review), review of non-trading transactions between the Company and significant related parties, and review of transactions of expenses incurred (individually) above Rs. 25 Lakhs. As per the Report, the working definition of related parties is not as may be defined under any provisions of any prevailing laws or guidance from any professional bodies in India.

The Final Report of the Special Audit was received on 21 April, 2014 and was placed before the Board of the Company on 26 April, 2014. The Management of the Company after making a detailed analysis of the observations in the Report, and after ascertaining the facts in each case has taken appropriate action including legal and filing of recovery suits, as deemed fit. As a part of this action, Rs. 112.07 million (Rs. 35.10 million included under Other Income-Note 19 under the head "Miscellaneous Income" and Rs. 76.97 million included under Other Expenses-Note 22 under the head "provision for doubtful advances" was recovered during the year ended 31 March, 2015.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Board had ratified and approved the appointment of M/s Rathi & Associates, Practicing Company Secretaries, Mumbai as Secretarial Auditors of your Company to conduct Secretarial Audit for financial year 2014-15.

In accordance with Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith and marked as Annexure XIII to this Report. The Secretarial Audit Report contains the following observations as given below and the explanations or comments by the Board with regard thereto are as follows:

1. The Company is required to hold at least one meeting of the Independent Directors in a year pursuant to the requirements of Section 149(8) of the Companies Act, 2013 read with Schedule IV of the Act. Further, Clause 3.3 of the norms issued by the Forward Markets Commission on 11th June 2014 states that meeting of the Independent Directors of the Company should be convened once in 6 months. As per the provisions of the Companies Act, 2013 a meeting of the Independent Directors should have been held before 31st March, 2015. However, the meeting of the Independent Directors was held on 9th April, 2015.

Management Response:

Consequent to the fall-out arising out of National Spot Exchange Limited crisis and the regulatory actions which flowed thereafter, the Board/Committees of the Board were predominantly involved in firefighting and damage control activities and to address, on priority, critical issues including taking action on findings of the Special Audit Report so as to ensure that the Company was adequately ring fenced. Accordingly, the meeting of only the Independent Directors could be convened only on April 09, 2015.

2. Pursuant to the provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee is required to have minimum three members. Consequent to the resignation of Mr. K. N. Reghunathan on 19th August, 2014, the number of members of the said Committee was reduced to 2. Consequently, at the meetings of the CSR Committee held on 30th September, 2014, 28th October, 2014, and 5th December, 2014, the number of members of the CSR Committee was 2. However, at the Board meeting held on 9th January, 2015 the said Committee was re-constituted to attain the minimum strength of members pursuant to the requirements of the Act.

Management Response:

Consequent to the resignation of Mr. K. N. Reghunathan, one of the Member of the CSR Committee, the strength of the Committee was reduced to two as against three members as prescribed under the Companies Act, 2013 for three consecutive meetings. The same was subsequently complied with by induction of Mr. R. Amalorpavanathan as one of the Members in the said Committee.

INTERNAL CONTROL AND THEIR ADEQUACY

The Audit Committee of the Company comprising Independent Directors, periodically reviews and recommends the unaudited financial statements as also the annual audited financial statements of your Company. Your Company has appointed an independent firm of chartered accountants to conduct the financial and operational internal audit in accordance with the scope as defined by the Audit Committee. The reports from the Internal Auditors are reviewed by the Audit Committee on periodic basis and the Internal Auditors have been advised to issue flash reports, if required. Further, all related party transactions are put up to and approved by the Audit Committee.

The Board has also put in place various internal controls to be followed by your Company to ensure the internal controls are adequate and are effective. The Board has approved the financial sub-delegation for expenses. The Board, to ensure transparency, has also formulated various policies and has put in place appropriate internal controls for the procurement of services, materials, fixed assets, income streams, investments and financial accounting.

Your Company also has an audit mechanism in place for information security management and has been certified under ISO/IEC 27001:2005 information security management system standard.

MATERIAL CHANGES AND COMMITMENT

Material changes and commitments affecting the financial position of your Company which have occurred after March 31, 2015 and up to the date of this Report are either covered in this section or at different sections of this Annual Report:

1. MSEI: In order to assist MSEI (formerly known as MCX Stock Exchange Limited) to comply with applicable regulations, your Company, along with FTIL, an erstwhile anchor investor/promoter of the Company, had provided an undertaking to SEBI to dilute its holding (equity and warrants) in MSEI within the permissible limit within the time prescribed, i.e. June 19, 2015. This undertaking was given by your Company, at the request of MSEI, in order to assist MSEI in obtaining regulatory approval for starting new segments for trading and retaining its recognition under the Securities Contracts (Regulation) Act.

Towards this end, your Company made serious efforts to dispose off the warrants. However, these efforts were significantly hampered by several factors that reduced the marketability of MSEI's warrants, such as consistently reducing MSEI's market share and net worth, which reduced the value and demand for the MSEI's shares and warrants. This made it difficult to dispose off the warrants. Since these factors were outside your Company's control, your Company approched SEBI seeking an extension of time. However, SEBI vide letter dated June 05, 2015, did not accede to your Company's request. Despite these factors, your Company continued to make vigorous efforts to dispose off the warrants. Your Company's efforts, however, were further thwarted by MSEI, that announced a rights issue of equity shares on May 29, 2015 at par i.e. at Rs. 1 per share. Since the rights issue remained open until July 9, 2015, it was virtually impossible to dispose off all the warrants before June 19, 2015 and be in compliance with clause 17 (2) of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (SECC Regulations). Apprehending that MSEI would cancel the warrants and appropriate the deposit placed by your Company with MSEI against the warrants, your Company filed a Suit (L) No. 685 of 2015 against MSEI before the Hon'ble Bombay High Court seeking an injunction against cancellation of the warrants and appropriation of the deposit. Your Company also sought refund of the amount of Rs. 415.92 million, being the amount of deposit presently held by MSEI against the warrants. Vide its interim orders dated July 9, 2015 and July 10, 2015, the Hon'ble High Court restrained MSEI from cancelling and / or extinguishing the warrants or any rights relating thereto, and from dealing in any manner with the remaining deposit of Rs. 415.92 million till further orders. The Hon'ble Court also restrained MSEI from taking any steps in pursuance of the Board resolution that MSEI may have passed for cancellation of the warrants. By a further Order dated August 3, 2015, the Hon'ble Court has recorded MSEI's statement that MSEI would deposit a sum of Rs. 200 million in Court within a period of four weeks, on a without prejudice basis, to establish its bona fides. The matter is now scheduled to come up for hearing on September 8,

2015.

In view of the above Court Orders, your Company valued the warrants at its face value of Rs. 1 each and brought down the carrying cost by Rs. 425.89 million. As your Company was only able to sell 148,277,938 warrants to various parties/entities at bids below its carrying cost, a loss of Rs. 134.83 million was incurred on the sale of these warrants.

Further, based on the market price determined on a weighted average basis for the sale of warrants by MCX, the equity shares have been brought to the lower of cost and this aforesaid market value. This is as per the Company's Accounting Policy on current investments and accordingly a provision of Rs. 33.30 million has been made.

The aggregate loss, diminution and provision of Rs. 594.02 million on account of the investments in MSEI are exceptional in nature and are accordingly disclosed in the financial results declared for the quarter ended June 30, 2015.

In the Limited Review Report for the quarter ended June 30, 2015, the statutory auditors have observed that: "We draw attention to Note 3 to the Statement regarding the Company carrying the investments in warrants of MSEI aggregating to Rs. 4,159.18 lacs at face value of Rs. 1 per warrant (after making provision of Rs. 4,258.89 lacs for diminution in value of these warrants) on the basis of the interim order of the Hon'ble Bombay High Court restraining MSEI from acting in any manner directly or indirectly in cancelling and/or extinguishing the warrants or any rights relating thereto, and from dealing in any manner with the remaining deposit of Rs. 4,159.18 lacs till further orders. Our Review Report is not qualified in respect of this matter."

During the year under review and till date of this Directors Report, your Company could convert an aggregate of 39,434,408 warrants of MSEI into equity shares (out of which 7,430,000 warrants are pending with MSEI for conversion into equity shares of MSEI) and could sell an aggregate of 178,817,920 warrants of MSEI.

Accordingly, as on the date of this Directors Report, your Company held 66,599,408 equity shares of MSEI (valued at Rs. 73.68 million at the rate of Rs. 1.11 per share) and 415,917,672 warrants of MSEI (valued at Rs. 415.92 million) and 6,500,000 equity shares of MCX-SX CCL (valued at Rs. 65.00 million).

2. MCX SX CCL: As at 31 March, 2015, your Company held 6,500,000 equity shares constituting 26 per cent of the paid up capital in MCX-SX CCL. Consequent to the increase in the paid up capital of MCX SX CCL to Rs. 450 million, the holding of your Company in MCX-SX CCL decreased to 14.44 per cent in MCX SX CCL in July 2015. Accordingly, MCX SX CCL is no longer an associate of your Company in terms of Accounting Standard-23 effective such date. Your Company is making efforts to reduce its shareholding in MCX SX CCL to be in compliance with clause 18 (2) of SECC Regulation. However, pending confirmation from MCX SX CCL with respect to its compliance of minimum net worth requirement as prescribed in SECC Regulations, 2012, the efforts of your Company hitherto seem to have hit a road block and the prospective investors who had earlier shown interest in acquiring stake in MCX SX CCL are also turning jittery.

3. IN THE MATTER OF COMPLAINT LODGED BY KETAN SHAH PURSUANT TO PwC REPORT AND COMPANY FILED WRIT BEFORE BOMBAY HIGH COURT: The Ld. Addl. Chief Metropolitan Magistrate of the 22nd Court, Andheri, in the matter of Mr. Ketan Shah in CC No. 25/SW/2015, MIDC Police Station registered an FIR on April 25, 2015 against erstwhile Management of MCX, FTIL and others under various sections of the Indian Penal Code, 1860. Upon request made by your Company for re-opening of its 11 closed complaints by MIDC Police Station, MIDC Police Station informed that the complaints filed by your Company pursuant to PwC Report have also been tagged in the abovementioned FIR. The enquiry in the same is under way. Meanwhile, Company has filed a writ petition before Bombay High Court against State of Maharashtra & Others, seeking a direction, inter alia, to set aside the transfer of complaints by Economic Offences Wing (EoW), Mumbai Police, to MIDC Police Station and further

to direct EoW to carry out investigation into the complaints, in a time bound manner and place a report on the investigation before the Court. The said complaints were initially filed before EoW by your Company which the EoW transferred to MIDC Police Station.

4. MENTHA OIL MATTERS: The Deputy Commissioner of Commercial Tax, Division - 1, Chandausi, Uttar Pradesh, by his ex-parte orders dated October 29, 2010 directed your Company to pay a sum of Rs. 288.73 million towards penalty for the alleged failure to deposit trade tax amount collected under the Uttar Pradesh Trade Tax Act, 1948 from the buyers of Mentha Oil traded on the MCX trading platform during the years 2005-06, 2006-07 and 2007­08. Aggrieved by the said ex-parte orders and various subsequent orders/ex-parte orders/ show cause notices your Company contested the same and finally again the Deputy Commissioner passed an ex-parte order on September 26, 2014 levying the same penalty for the aforementioned assessment years. However, on January 22, 2015 the Deputy Commissioner vide its order has re-opened the matter. After hearing your Company and its reply the Deputy Commissioner passed its orders dated July 20, 2015 (received by the Company on August 20, 2015) and modified the total penalty to Rs. 144.36 million in the aforesaid matters. The Company is in the process of challenging the said orders before the Appellate Authority.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

Save as except disclosed in this report, no significant and material orders were passed, during the year under review, by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

HUMAN RESOURCE DEVELOPMENT

Your Company believes in strategic alignment of Human Resources to its business priorities and end objectives. As at March 31, 2015, your Company employed a dedicated team of 284 employees.

Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. During the year, an Internal Complaints Committee was formed to redress complaints received regarding sexual harassment. No complaints were received during the year 2014-15 in relation thereto. Your Company has imparted awareness training to all female employees on the 'Anti-Sexual Harassment Policy.'

Your Company continues to attract, retain and nurture talented people in its endeavour to be an employer of choice. During the year under review, the Compensation Committee of the Board at their meeting held on November 11, 2014 considered and approved the grant of 172,600 stock options representing equivalent number of equity shares of Rs. 10/- each of the Company, to eligible employees under the Employees Stock Options Scheme - 2008 (ESOP 2008), adopted through the Trust route. The Committee, subject to the approval of the shareholders at ensuing AGM, also recommended variation in the vesting schedule and discount of 10% on the applicable closing price, as provided in the SEBI Regulations. The said resolution is being proposed for the approval of the shareholders. Voting rights on the equity shares exercised by employees under the ESOP are either exercised by them directly or through their appointed proxy.

The disclosures pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, Section 62 of the Companies Act 2013 read with Companies (Share Capital and Debenture) Rules, 2014, as at March 31, 2015 in connection with the ESOP 2008 are set out in Annexure XIV to this Report.

PARTICULARS OF REMUNERATION

Your Board at its meeting held on August 08, 2015 approved Nomination & Remuneration Policy for Directors, Key Managerial Personnel and other employees which form part of this report as Annexure XV.

The ratio of the remuneration of each director to the median employee's remuneration and other details in accordance with Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure XVI.

Further, in accordance with Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing particulars of employees as stipulated therein also forms part of this Directors' Report as Annexure XVII. Pursuant to Section 136 of the Companies Act, 2013, the same is open for inspection at the registered office of your Company. Copy of this statement may be obtained by the members by writing to the Company Secretary of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

The disclosures to be made under Section 134 (3) (m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014, are explained as under:

A) CONSERVATION OF ENERGY

Your Company, not being energy intensive, takes various measures to reduce energy consumption by using energy-efficient computer systems and equipments. As an ongoing process, your Company evaluates new technologies and techniques to make its infrastructure more energy efficient.

(i) Steps taken or impact on Conservation of Energy:

Your Company, for the Exchange servers, has installed in-row cooling system that cools equipment based on the heat generated, and ensures that no energy is wasted in running compressors excessively to maintain the desired temperature levels. Some of the policies implemented by your Company on an ongoing basis as a part of energy conservation/ saving includes:

1. Maintaining adequate capacitor bank for non-linear electrical loads like AC, Pumps, Heat Recovery System, thereby reducing the drawing of extra energy and improving power factor.

2. Preventive maintenance of air conditioning system on scheduled basis and ensuring that the heat sensors and electronic components are properly functioning for compressors to achieve variable compression linked to heat levels for reduction in power consumption.

(ii) Steps taken by your Company for utilising alternate sources of energy:

No alternate source of energy is utilized by your Company.

(iii) Capital investment on energy conservation equipment:

During the year under review, no capital expenditure is incurred in relation thereto.

B) TECHNOLOGY ABSORPTION:

(i) The efforts made towards technology absorption:

Technology is a key enabler and core facilitator to the major goals of your Company and is identified as one of the strategic pillars. Your Company hosts all mission-critical applications and the supporting infrastructure in its state-of-art Data Center which is supported by the best-of-breed network, security and other necessary infrastructure. 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. Your Company continues to make substantial investments in its technology platform and systems for meeting increasing market requirements and for keeping pace with the rapid technological developments and changes.

Your Company's technology platform continues to be stable and robust and supports increasing transaction volumes. At present, the Exchange's system 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 has embarked on a program to equip its Exchange Technology Platform with more processing capacity and lower latency to meet the scale and transaction volume requirements in the coming years. Your Company provides various mode of connectivity solution to market participants including NPN-POP, VSAT,

VPN, leased line, and internet and based on their specific needs of performance, redundancy and information security they opt for appropriate connectivity solution.

All departments within the Company use IT to deliver superior services to the internal customers and Members of the Exchange. With a view to support operations of Surveillance Department effectively, Exchange has setup and augmented systems for real time analytics and data warehouse.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution:

Your Company has implemented cutting edge technologies which are best in class IT systems and practices in order to ensure that its technology platform becomes a strategic business tool for building competitive advantage.

Exchange's robust technology infrastructure has continued to provide uninterrupted trading experience and ensures no single point of failure. Through use of carefully evaluated and implemented technology solutions, business has been able to offer quality services at optimal costs.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

Your Company has not directly imported any technology during the last three financial years.

(iv) Your Company has not incurred any expenditure on Research and Development during the year under review.

C) FOREIGN EXCHANGE EARNINGS/OUTGO DURING THE YEAR UNDER REVIEW

Your Company is engaged in the business of operating a Commodity Exchange and endeavours to export its services as and when opportunities are available. The details of foreign exchange earnings and outgo form a part of the significant accounting policies and Note no. 26 of Notes forming part of the financial statements.

RESEARCH AND DEVELOPMENT

As a result of constant research and development, your Company continuously strives to offer new and wide-ranging products in the realm of commodity futures. Moreover, your Company customises products so as to meet the needs of a wide range of market participants. As stated in the earlier sections of this Report, your Company launched Crude Oil Mini (10 barrels) in January 2015 and Gold Global (200 grams) contracts in July 2015 catering to needs of different stakeholders in the value chain of these commodities.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern' basis;

_MCX Annual Report 2014-15 I Directors' Report_

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The above have to be read along with the section on Auditors' Report, given earlier in this Directors' Report.

ACKNOWLEDGMENTS

Your Directors place on record their sincere gratitude to the Forward Markets Commission, Ministry of Finance, Department of Economic Affairs, Government of India, Reserve Bank of India, Foreign Investment Promotion Board, Securities and Exchange Board of India, BSE Limited, Ministry of Corporate Affairs, Department of Post, Shareholders, Financial Institutions, Bankers, Members of the Exchange and Business Associates for their continued support and faith in the Company. Your Directors also wish to place on record their appreciation for the contribution made by employees at all levels.

For Multi Commodity Exchange of India Limited

Satyananda Mishra

Chairman of the Board

Mumbai August 26, 2015