Multi Commodity Exchange of India Ltd Management Discussions

1 In computing Average Daily Turnover and Average Daily Volume, Muhurat Trading day has been excluded in day count.

Product-wise performance of your Company during the year 202425 is given in Annexure I.

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

During FY 2024-25, the Companys total income increased to Rs.1,10,737 lakh from Rs.67,124 lakh in FY 2023-24 registering an increase of 65% with a net profit margin of 37%. The operating expenses decreased to Rs.49,154 lakh from Rs.56,601 lakh in FY 202324, registering a decrease of 13%.

The profit before tax for FY 2024-25 has substantially increased to Rs.55,405 lakh vis-a-vis Rs.7,061 lakh in the last financial year, registering an increase of 685%. During FY 2024-25, the profit after tax has also increased by 698% to Rs.41,478 lakh as against Rs.5,196 lakh in FY 2023-24.

The Company operates in Commodity Derivatives market segment business. Transaction fees comprise a significant portion (approximately 95%) of the Exchanges revenue from operations. The revenue from transaction fee during FY 2024-25 was Rs.96,180 lakh as against Rs.55,971 lakh in the previous year. The investment income was Rs.8,293 lakh in FY 2024-25 (Previous year Rs.6,663 lakh) including gain / (loss) on fair valuation of mutual funds (Table 5).

The Companys operating revenue stood at Rs.1,01,158 lakh for FY 2024-25 as against Rs.59,495 lakh for previous year. Increase in operating revenue by 41,663 lakh is mainly due to increase in revenue from transaction fees by Rs.40,209 lakh (Increase by 72%).

The Companys expenditure consists of employee benefit expenses, C&S charges and product license fees, depreciation / amortization charges, information technology and related expenses, contribution to statutory funds and other expenses (Table 6).

*Other expenses primarily comprise of costs / charges pertaining to regulatory fee, advertisement, repairs and maintenance, CSR expense, legal and professional charges, etc.

Operating costs:

Operating cost of the Company decreased by Rs.7,447 lakh (decrease by 13%) from Rs.56,601 lakh in FY 2023-24 to Rs.49,154 lakh in FY 2024-25.

Provision for taxation:

The Companys provision for tax for FY 2024-25 was Rs.13,927 lakh (Previous Year Rs.1,865 lakh).

Earnings per share (EPS):

Earnings per share stood at Rs.81.33 per equity share (of Rs.10/- each) for FY 2024-25 as against Rs.10.19 per equity share (of Rs.10/- each) for previous year.

Profit analysis:

The net profit margin stood at 37% in FY 2024-25 (Previous Year: 8%).

Financial performance and operational performance parameters:

The transaction fees has substantially increased by 72% to Rs.96,180 lakh in FY 2024-25 from Rs.55,971 lakh in FY 2023-24.

Shareholders funds:

Share capital:

As on 31^st March, 2025, the Companys share capital stood at Rs.5,099.84 lakh, i.e. 509.98 lakh shares of 10 each. (Previous Year: Rs.5,099.84 lakh i.e., 509.98 lakh shares of 10 each).

Other equity:

The Companys other equity increased to Rs.1,87,650 lakh as on 31^st March, 2025 from Rs.1,49,601 lakh as on 31^st March, 2024. The net worth of the Company as at 31^st March, 2025 stood at Rs.1,92,750 lakh as compared to Rs.1,54,701 lakh as at 31^st March, 2024.

Secured loans:

The Company had no secured loans in its books as on 31^st March, 2025, as well as, on 31^st March, 2024.

Fixed assets:

The Companys fixed assets (including capital work in progress, right of use asset, intangible assets and intangible assets under development) stood at Rs.42,353 lakh as on 31^st March, 2025, as against Rs.38,883 lakh as on 31^st March, 2024.

Investments:

As on 31^st March, 2025, the Companys investments (non-current and current) stood at Rs.1,62,877 lakh as against Rs.1,13,373 lakh as on 31^st March, 2024.

Current assets and current liabilities:

The current assets consisting of current investments, trade receivables, cash and cash equivalent, bank balances and other current assets is Rs.66,416 lakh as on 31^st March, 2025, as compared to Rs.43,810 lakh as on 31^st March, 2024.

The current liabilities consisting of trade creditors, security deposits and others stood at Rs.28,448 lakh as on 31^st March, 2025, as against Rs.19,635 lakh as on 31^st March, 2024.

Key Financial Indicators: For Standalone:

The Board has put in place various measures to ensure that the internal control mechanisms are adequate and effective. The Exchange has also put in place state-of-the-art technology and has automated most of the key areas of operations and processes, to minimize human intervention.

The design, implementation and maintenance of adequate internal financial controls are such that they operate effectively and ensure accuracy and completeness of the accounting records. Their presentation gives a true and fair view of the state of affairs of the Company and they are free from material misstatements, whether due to error or fraud.

The operational processes are comprehensively documented coupled with well-defined Standard Operating Procedures. The same includes the financial controls in the form of maker and checker.

The Board has approved a scheme of financial sub-delegation to officials of your Company for incurring expenses. The Board, with a view to ensure transparency, has also formulated various policies and has put in place appropriate internal controls for procurement of services, materials, fixed assets, monitoring income streams, investments and financial accounting.

Internal control measures include adherence to systemic controls, information security controls, as well as role based/ need based access controls. Further, the existing systems and controls are periodically reviewed for change management in the situations of introduction of new processes / change in processes, change in the systems, change in personnel handling the activities and other related activities.

The Audit Committee of the Company, comprising of majority Public Interest Directors, reviews and recommends the unaudited quarterly financial statements and the annual audited financial statements of your Company to the Board for approval.

Your Company has appointed a firm of Chartered Accountants to conduct independent financial and operational internal audit (pre and concurrent) 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.

Pre-audit by the independent internal audit firm is conducted for various activities including payments made by the Company.

Further, all related party transactions are placed before the Audit Committee and are approved / ratified by it after deliberations. Prior omnibus approval of the Audit Committee is obtained on annual basis for related party transactions which the Company foresees to be in the ordinary course of business and on an arms length basis.

The attributes of your Company that have made it the market leader and sustain its unique position are described in the following paragraphs.

MCX continues to be the leading exchange in Indias commodity derivatives markets, capturing approximately 98.1% of the market share in commodity futures turnover and nearly 97.4% in commodity Options turnover (notional) during the year 2024-25. In 2024, MCX was recognized as the worlds largest commodity Options Exchange based on the number of contracts traded on its platform. The Exchange has built strong brand equity by providing a reliable trading platform for commodity derivatives, characterized by transparent price discovery and robust risk management processes.

MCX plays a crucial role in the broader commodity ecosystem in India, fostering its growth and development. In addition to the Members and their clients who engage with the Exchange for risk management and trading, various other stakeholders are also connected to MCX and clearing operations provided by MCXCCL. These include warehouse owners, service providers, assayers, logistics companies, collateral management firms, and financial institutions. The prices discovered on the MCX platform are recognized as credible reference prices by numerous stakeholders in the physical markets, influencing their transactions. As a result, the prices established on MCX not only serve as benchmarks for physical market trades but also enhance the overall price discovery process in these markets.

MCX is widely recognized for offering some of the most liquid commodity derivatives products in India, establishing itself as a vital player in the market. High liquidity naturally draws a diverse array of participants, including retail traders, large corporate entities, and reputed financial institutions, extending to Foreign Portfolio Investors as well. This broad participation base is one of the Exchanges most significant competitive advantages, underscoring its pivotal role in the Indian commodity trading landscape.

As a recognized Exchange and a public listed entity, your Company operates under stringent regulatory oversight. MCX is dedicated to collaborating with all stakeholders to foster a market environment that is orderly, well-informed, and equitable, benefitting all participants. Your companys operations underscore robust internal governance and regulatory compliance, operating under the principle that sound corporate governance enhances stakeholder confidence and attracts market participants to utilize its trading platform. The Exchanges Regulatory Department is tasked with ensuring adherence to all applicable regulations, including the SEBI Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, or SECC Regulations, among others. Additionally, your Company has been stressing on effective dispute resolution mechanism to address clients grievances. The Exchange, along with other Market Infrastructure Institutions (MIIs), has also been part of creation of the Securities Market Approach for Resolution Through Online Dispute Resolution (SMART ODR) portal, where investors can file complaints and resolve disputes with market participants, including listed companies, intermediaries, and market infrastructure institutions. This platform facilitates online conciliation and arbitration, offering a faster and more efficient alternative to traditional court-based dispute resolution.

The human resources at your company possess expertise in commodities, commodity derivatives, and related fields, with knowledge gained over two decades of the Exchanges operations and close interactions with market stakeholders. This expertise has not only contributed to the development of the Exchange and its ecosystem but has also been sought after internationally to assist in creating and developing market institutions in various countries.

Multi Commodity Exchange Clearing Corporation Limited (MCXCCL), a wholly owned subsidiary of MCX, provides an efficient platform for clearing and settlement of all the trades executed on MCX. MCXCCL also provides an efficient risk management framework within which the trades are settled, which enables the Exchange to guarantee trade settlements and integrity of trades even in periods of upheavals and high volatility in the market.

MCXs strong performance and unwavering commitment to its stakeholders have earned the company several prestigious awards. During the year 2024-25, the Exchange received accolades for Digital Transformation and Resilience from the Red Hat APAC Innovation Awards and for Best Financial Market Technology Implementation presented by The Asian Banker and the International Council of Advisors. This recognition was for the successful implementation of an integrated commodity derivatives market platform that includes trading, risk management, clearing and settlement functionalities. The Commodity Participants Association of India (CPAI) recognized MCX as the "Leading Commodity Exchange" at their 10^th International Convention in New Delhi in November 2024. MCX was also honoured with the title of "Exchange of the Year" at the India Gold Conference 2024, held in Bengaluru in August 2024.

MCXs technology infrastructure is the foundation of our business and a key contributor to the Exchanges functioning and development. Our trading platform, mission-critical applications, and supporting infrastructure are hosted in a state of the art Data Centre at our headquarters in Mumbai, and replicated at a Near Online Site nearby, and at a Disaster Recovery site in Gift City - Gandhinagar.

Our electronic platform is supported by our infrastructure and advanced technology, allowing fast trade execution, with uptimes exceeding 99.9% since inception, low latency, anonymity between counterparties, price transparency, prompt and reliable order routing, trade reporting, multicast tick-by-tick market data dissemination and market surveillance. The platform is built on state-of-the-art storage-based technology, using one of the fastest storages in the world. This positions MCX as one of the first to deploy such technology, providing a competitive edge.

The Exchanges state-of-art data center is supported by best-inclass network and security infrastructure with high availability at all levels. The Company runs Defence-in-depth strategy to ensure information security at all layers with well-defined Information Security policy and Cyber Security and Cyber Resilience policy & governance structure.

In the fiscal year 2024-25, the Companys internal software development team initiated several key projects to augment and deploy a range of ancillary systems in alignment with organizational needs and in compliance with SEBIs regulations. Notable among these initiatives were: 1) Enhancing the surveillance systems architecture and optimization, which led to a threefold increase in message processing capacity 2) Upgrading technology in ancillary applications to remain current and reduce the risk of cyber threats.

Besides, your Company has also implemented Cyber Security Operation Centre (C-SOC) for monitoring and raising alerts related to cyber-attacks and other security related incidents round the clock. The Exchange has also implemented Privilege Access controls to monitor and manage the access control of the critical assets and has enhanced security by implementing 2-factor authentication (2FA) for remote users.

The emerging landscape in the global and domestic markets provide considerable growth opportunities to your Company, some of which are mentioned below:

With spread of education and awareness about commodity derivatives, as well as ease of access to the market platform brought mainly by technology-led innovations, MCX may see increasing participation on its platform in the times ahead. Further, participation by financial institutions may gain momentum as clients increasingly look forward to gaining exposure to commodity derivatives using the services of institutions like Mutual Funds, Portfolio Managers, Alternative Investment Funds and in the newly-introduced Specialised Investment Funds.

Foreign Portfolio Investors (FPIs) have started participating on MCX from April 2023. The average daily turnover clocked by this class of participants increased from 1,925 crore in 2023-24 to Rs.11,569 crore in 2024-25.

In response to market demand and after receiving regulatory approvals, your Company launched several new products during the year 2024-25. On 23^rd April, 2024, Options contracts on Crude Oil Mini and Natural Gas Mini Futures were introduced. Subsequently, on 15^th October, 2024, the Exchange launched Futures contracts for Cotton Seed Wash Oil. The Mini contracts are designed to meet the needs of smaller participants in the energy market, while the Cotton Seed Wash Oil Futures offers price transparency and risk management tools to processors, traders, and refiners of this commodity. Continuing its innovative product launches, MCX launched the Gold Ten Futures contract on 1^st April, 2025. This contract, with an underlying of 10 grams of gold, caters to the traditional buying preferences of Indian consumers and offers an accessible entry point for small investors.

Together, these product launches highlight MCXs commitment to innovation, providing market accessibility and meeting the evolving needs of stakeholders across various commodity segments.

Regulatory approvals have been obtained for other new products, and the Exchange plans to launch them at appropriate times. Apart from derivatives on new commodities, your Company continues to explore different variants of Futures and Options contracts for existing commodities, with variations in terms of tenure and lot size.

The Exchange maintains an open approach to receiving market feedback on its products and modifying the specifications of existing derivative contracts based on such market feedback and recommendations. In May 2024, the Exchange modified MCX Cotton Candy Futures, which took effect from the November 2024 contract. The modifications included a reduction in the trading and delivery units to 12 candies and a decrease in the tick size to Rs.10. The locations of the Additional Delivery Centres were also changed.

In November 2024, MCX made an important adjustment by shifting its Gold (1 kg) Options expiry frequency from bi-monthly to monthly. By adopting this new monthly schedule, MCX sought to attract a greater number of participants and enhance hedging activity, ultimately fostering a robust marketplace for Gold Options.

MCX also revised the delivery and settlement procedures for its Base Metals contracts during the year 2024-25. Effective January 2025, the tender period for Base Metals Futures was reduced from five days to three days. The revised delivery period aimed to streamline the settlement process, allow for quicker delivery of commodities, and align the delivery process with global best practices, thereby improving market efficiency.

Your Company perceives some threats in its operations and on its path towards expansion.

Your Company has an extensive national reach with 544 registered Members and 32,480 authorised persons as on 31^st March, 2025. However, for many commodity Futures and Options contracts, there is concentration risk, as significant amount of trade volumes are driven by a few large Members. Similarly, the basket of liquid Futures and Options contracts on MCX is restricted to a few nonagricultural commodity derivative contracts. Such concentration in active Members and liquid contracts can cause over-dependence on these Members and contracts and lead to potential business risks for your Company.

Some Exchanges with commodity derivatives segment, which are active in other asset classes, have started offering commodity Futures and Options contracts which are mirror products of MCXs liquid contracts, albeit with little success. The trend of launching products that fully mirror MCXs liquid contracts may pose a threat to the market share of your Company.

Your Company has a high concentration of products which have international reference-able markets. Any upheavals in those markets caused by internal or external factors can adversely affect the ability of Indian participants to take international price references while trading on MCX.

Increasing cost of compliance

Your Company being a regulated and a listed entity, is subject to high scrutiny and compliance on both these fronts. As a result, the cost of compliance is high for your Company.

Cybersecurity threat is increasingly becoming critical with new threats that seek to exploit any vulnerability in the Exchanges systems. For MCX, being a MII, providing an online trading platform, cybersecurity is of paramount importance for ensuring trust among the market participants, regulators and stakeholders.

In view of such threats, MCX has adopted a defence-in-depth strategy to ensure information security at all layers with well-defined Cyber Security and Cyber Resilience Policy and comprehensive Information Security policy. MCX has established best in class Cyber Security Operations Center (C-SOC) which operates 24/7 for continuous monitoring, detection, quick response and recovery in case of any type of cyber-attacks/ incidents. Information Security team has implemented people, process and technology security controls in the form of best- in-class tools and technologies, processes aligned with global standards like ISO 27001:2022, NIST etc., and regular awareness initiates to strengthen the human firewall for protection against cyber-attacks. The Cyber Security awareness sessions are also being extended to the market participants for creating awareness to build robust cyber security and cyber resilience framework in the commodity market at large.

Constant enhancement and continuous improvement in the Cyber Security Framework and Information Security Management System has been your Companys top priority. Your Company is ISO 27001:2022 certified and organizations Information Security Policy is formulated on the same standard.

To manage cyber security risks associated with processes, information, networks, systems and applications, the Cyber Security and Cyber Resilience Policy of your Company includes the following:

i. Identify critical IT assets and risks associated with such assets;

ii. Protect assets by deploying suitable controls, tools and measures;

iii. Detectincidents, anomalies and attacks through appropriate monitoring tools/processes;

iv. Respond by taking immediate steps after identification of the incident, anomaly or attack;

v. Rs.Recover from incident through incident management, disaster recovery and business continuity framework.

Your Company is also doing training for market intermediaries to improve the cyber security practises in the industry.

Your Company has strengthened the Business Continuity Plan (BCP) and Disaster Recovery (DR) Policy and framework considering the latest SEBI Guidelines for BCP-DR of MIIs issued in March 2021, with an objective to put in place measures to restore operations of critical systems within stipulated Recovery Time Objective (RTO), streamlining communication protocols, identifying broad scenarios of disaster, escalation hierarchy among others.

Your Companys business and financial performance depends on various internal and external factors, some of which may give rise to risks and concerns.

Market Risks

Tariffs by USA: uncertain business environment

The steep protective tariffs being enacted by the United States of America (USA) from January 2025, has been creating uncertainty in the international business environment. The changes in trade policies and retaliatory tariffs have affected global supply chains and commodity prices, and introduced volatility in financial and commodity markets. Businesses across various sectors are facing difficulties in planning their production, pricing, and procurement strategies due to the unpredictability of trade flows and the rising costs of inputs. Exporters and importers, in particular, are experiencing uncertainty in their profit margins and increased compliance burdens. These conditions can lead to a loss of business and slower global economic growth, resulting in lower transaction volumes and reduced participation in exchange platforms.

Global economic conditions

The performance of commodity derivatives markets and your Companys growth are significantly influenced by macro-economic conditions in the domestic and global economy, particularly in terms of growth, production, and consumption activities. The global economy is navigating a complex landscape shaped by ongoing geopolitical tensions, trade disruptions, and inflationary pressures. Growth in advanced economies like the United States and the Eurozone remains modest, while persistent trade tensions and tariff wars have disrupted global supply chains, increased production costs, and dampened investor confidence. Public debt levels remain elevated, limiting fiscal space for many governments and adding to long-term concerns over economic stability.

The Indian economy has by and large been able to show resilience despite the global headwinds. Strong domestic demand, increased government infrastructure spending, and expectations of a favourable monsoon can further support the economic momentum. India remains one of the fastest-growing major economies, though global trade tensions—particularly the impact of new U.S. tariffs—have slightly tempered growth expectations. The adverse conditions encompass a range of factors including economic downturns, inflationary pressures, and disruptions in financial markets, including Indias. Such challenges can impact investor confidence and overall market demand for the products and services of your Company.

In 2024, commodity markets worldwide experienced volatility due to factors such as changes in monetary policy in large economies, geopolitical tensions, supply chain disruptions —especially in the Middle East — and environmental challenges like extreme weather events. These factors profoundly impacted commodity prices across various sectors, including energy, agriculture, and metals, requiring market participants to adapt quickly. The combination of these real and monetary influences may lead to extended periods of elevated or depressed commodity prices in the future too. Since MCXs transaction revenue relies on the value of traded commodity derivatives contracts, the Exchanges revenues could be adversely affected by prolonged periods of low prices.

Business Risks

Competition in identical products

Your Company operates in an industry characterised by competitive pressures, with several Exchanges now offering products in the commodity derivatives segment. The introduction of identical/ near-identical products by competitors poses challenges that can impact profitability and sustenance of your Company. Firstly, it can lead to market fragmentation and liquidity dispersion, potentially increasing transaction costs and reducing overall market efficiency. Secondly, competitive pricing pressures could erode profit margins and limit revenue growth.

Disorders at benchmark global trading venues

Stakeholders involved in physical markets in India, particularly within the realms of metals and energy commodities, often use prices established at benchmark global trading hubs as reference prices for their transactions. When disruptions occur at these pivotal global platforms, they can significantly interfere with the price discovery process for such international commodities. As uncertainty clouds price signals, stakeholders in India may become increasingly hesitant to engage in trades. This reluctance can lead to a decline in participation and transaction volumes, ultimately impacting the Exchanges revenue streams and undermining the overall vitality of the market.

Increasing cost of physical infrastructure and facilities

Expenses related to procurement and maintenance of infrastructure and facilities for operating a Market Infrastructure Institution (MII) like your Company are significant. As the Exchange expands its operations to meet increasing trading volumes and technological demands, investments in infrastructure become indispensable, yet increasingly costly. Firstly, there is a critical need for creating and maintaining a state-of-the-art technology-related infrastructure. This encompasses upgrading trading platforms, enhancing data centres to achieve faster execution speeds, and implementing robust cybersecurity measures to protect sensitive information. These technological upgrades are necessary not only to enhance operational efficiency but also to ensure compliance with regulatory standards and uphold market integrity. Secondly, the physical facilities themselves, including office spaces in new centres and support facilities like those related to operating from disaster recovery sites, involve significant expenditures. These expenditures could increase with increasing demands from stakeholders, expansion of business and challenging cyberattacks.

Staff attrition

In the fast-paced and dynamic industry landscape, many organizations, including your Company, may face the issue of high employee turnover. This challenge brings with it both apparent and indirect costs. The process of recruiting and training new employees incurs substantial time and monetary investments, and the departure of seasoned employees results in the loss of valuable skills and institutional knowledge. These factors directly impact organizational productivity, potentially leading to diminished revenue and missed prospects.

Technology Risk

Migration to New Technology Platform

Your company migrated to the new platform and went live on 16^th October, 2023. This project represents one of the most complex transformations of a running exchange, handling over 100 million transactions per day, and was executed as a big bang single cutover covering the entire scope of the transformation program including trading, real-time risk management, clearing and settlement.

The new CDP platform comprises the following three offerings:

• Trading Platform for Trading and Market Data Feeds

• Frontend applications for Securities Trading

• Platform for Real-time Clearing, Real-time Risk Management, Collateral Management, Settlement, and Reporting

Post migration to the new Technology platform, we have seen significant growth in trading volumes in year 2024-25 and the new Technology Platform has scaled up to handle these volumes seamlessly. We have also enhanced the in-house team capabilities to handle the operations and support of the new Technology platform.

Our business environment is marked by constant and rapid technological advancements. To maintain our competitive edge, your company continues to work on upgrades, enhancements and improve the performance, capacity, accessibility and features of our trading and clearing, systems and technologies.

Vulnerability to obsolescence and cyber-attacks

The successful operations of your Companys business and operations are dependent in part on the use and deployment of technology. However, technology is susceptible to obsolescence and increasing cyber-attacks from across the globe. To continue to be the exchange of choice to its stakeholders, your Company needs to continuously invest resources to have cutting edge technological infrastructure and connectivity.

Financial Risk

Imposition or enhancement of statutory costs

Imposition of Commodity Transaction Tax (CTT) in July 2013 had a major negative impact in your Companys volumes. Hence, any new tax, increase in a tax, coverage of a tax on new activities or a new statutory levy may dampen volumes, thereby impacting your Companys profitability. An unexpected tax demand or levy of a fee/ fine may also, likewise, affect your Companys profitability.

Monetary policy changes

During the year 2024-25, the Reserve Bank of India (RBI) started adopting an accommodative monetary policy stance to support economic growth amid easing inflation. The central bank reduced the repo rate by 25 basis points twice, bringing it down to 6%. This decision was influenced by a significant decline in retail inflation, which fell to a more-than-five-year low of 3.34% in March 2025, primarily due to decreasing food prices. Looking ahead, many economists anticipate further monetary easing, provided inflation remains near the RBIs 4% target and global economic conditions do not deteriorate significantly. This potential adjustment could directly impact your Companys treasury income, as a reduction in interest rates from their recent highs might decrease interest income on investments in the upcoming quarters.

Regulatory Risk

Suspension/ Ban on Trading in Derivative Contracts

On 20^th December, 2021, SEBI suspended derivatives trading in several commodities, including Crude Palm Oil (CPO) Futures which was a highly liquid contract on MCX. Although the suspension was initially announced for a year, it was extended multiple times, the latest being till 31^st March, 2026. Before its suspension, MCX CPO Futures had clocked an average daily turnover of around Rs.380 crore during April-November 2021, hence its suspension resulted in a loss in trade volumes and income for the Exchange. Your Company faces risks of such abrupt suspensions/ bans on commodity derivative contracts in the future too. Such suspensions can have direct and indirect consequences. Directly, they result in an unexpected and unplanned loss of transaction revenue for the Company. Indirectly, they can undermine the confidence of market participants in the continuity of other derivative contracts as well. These acts of suspension or ban may pose risks to your Companys business.

Technical Glitches

A technical glitch at the Exchange can lead to a sudden halt and disruption in trading activity. Such outages can undermine investor confidence and lead to stringent regulatory actions, including liabilities for monetary fines and business restrictions. Since the exchange platform is heavily dependent on its technological systems, any technical glitch can, therefore, have adverse regulatory and financial repercussions.

Adverse Regulatory and Policy Decisions

All aspects of your Companys operations are subject to regulatory oversight. Changes in Laws, Regulations, Taxation etc., or new Rules, Regulations or Policies may necessitate the Company to allocate more resources for compliance, in turn increasing operational expenses. This may impede the Companys ability to operate and grow its business. Besides, changes in policies or introduction of new policies can also compel your Company to significantly alter its business strategy, involving significant costs.

Your Company regularly reviews the risks it faces and takes appropriate action to minimize the likelihood of such occurrences or their impact.

Your Company, being the market leader, has been seeking to expand the overall market by introducing new products and bringing more participants. Further, your Company believes in introducing products after thorough market research and feedback and intends to capitalize on its large network and physical market connect. This gives your Company a competitive edge over others and helps to meet challenges posed by competitors. Further, your Company has been seeking to diversify its product basket, by adding more products in futures, as well as options across commodity segments. A well-diversified product basket should help the Company to counter over dependence on single product / segment in prices.

To minimize the effect of interest rate volatility on treasury income, your Company continuously monitoring its portfolio to be in line with the market trends. Your Company has adopted amortization method for investments held till maturity.

As a part of the risk mitigation and containment plan for avoiding business disruption, your Company has focused on strengthening its core technology infrastructure so that there is no single point of failure, thereby, ensuring uninterrupted trading operations. As a backup plan, your Company has a DR Site which has a robust infrastructure and accessibility. Further, your Company has a Near Online Site (NOS) in Mumbai with data replication to achieve near zero data loss in case of any eventuality. Your Company regularly conducts mock drills to test the readiness and effectiveness of IT infrastructure at its Data Centre and DR Site as part of BCP DR preparedness. Your Company had carried out unannounced live trading twice from its DR Site in FY 2024-25 as a part of regulatory compliance. All the trading & surveillance operations were carried out from the DR Site. Post live trading from DR site, your Company recommenced its operations from its Primary Site smoothly.

Subsequent to operationalization of MCXCCL in 2018, risk management, clearing and settlement, warehousing functions are being undertaken by the clearing corporation. MCXCCL ensures that within the regulatory framework, an efficient and effective clearing and settlement activity along with an effective funds settlement mechanism, commodities delivery mechanism are adhered to. Above all, it maintains a robust risk management system by levying margins real time and to that effect carries out daily stress tests and maintains a Settlement Guarantee Fund. Further, it has laid down various margin requirements to safeguard members and the ecosystem against adverse market movements. It has necessitated all its clearing members to have a certain minimum net worth and confirm their net worth on a halfyearly basis, which enables it to monitor and ensure their financial

strength. It has also implemented additional risk mitigation measures as part of member monitoring like Margin Shortfall Block Amount, Risk Reduction Mode, Square off Mode, Exposure Free Deposit for MTM Shortage, etc.

Your Company aims to further strengthen its position as a leading exchange, providing a wide array of commodity derivatives with increased focus on enhancing overall market size, expanding its product and service offerings and integrating the exchanges products and services with domestic physical industry. Your Company also constantly looks for new product innovation and development, and offers state-of-the-art services to all its stakeholders. Your Company also continues to make relentless efforts in tapping the opportunities unfolding in Indias commodity markets.

Your Company remains dedicated to fostering integration with the physical commodity markets and reducing regional price disparities. In pursuit of the vision of One Nation One Price, integration of fragmented markets and extending the footprint of the commodity derivatives market across the nation, your Company has been accrediting designated warehouses for delivery of commodities across the country, viz. Thane, Raipur, Chennai, Kolkata, Durgapur, and the National Capital Region (NCR) for delivery of metals.

To make the Exchanges bullion derivative contracts more relevant to the physical market players and in line with the broader national objective of Atmanirbhar Bharat, your Company established Good Delivery norms for BIS standard gold in March 2021, and embarked upon the path of recognizing domestic bullion refiners for good delivery of gold bars against Gold Mini (100 grams) Futures contracts. The empanelled refineries, as on 31^st March, 2025, included those of Augmont Enterprises Pvt Ltd, Titan Company Limited, Parker Precious Metals LLP and Sovereign Metals Ltd. Delivery of 1,830 kgs of Indian refined gold valued at Rs.1,381 crore was successfully seen under this route during the year 2024-25, with total delivery of 10,944 kg valued at 6,555 crore till 4^th April, 2025 since introduction of Good Delivery norms. Gold from refineries meeting the India Good Delivery norms are also being considered for delivery under recently introduced Gold Ten Futures contracts. We believe that the initiative of empanelling domestic refiners by MCX would serve the nation by reducing disparities, encouraging quality gold recycling and reducing import dependence.

The initiative of empanelling local Gold refiners was extended to local Lead suppliers from March 2022. During the year 202425, your Company extended recognition to one more domestic refined Lead producer, viz. M/s Jain Resource Recycling Private Limited, Gummidipoondi, as an eligible Good Delivery brand on the Exchange. This brought the total count of approved domestic refined Lead producers to seven as on 31^st March, 2025.

During the year 2024-25, responding to suggestions from physical market participants, the minimum purity specifications for delivery under MCX Lead and Lead Mini Futures contracts were revised up to 99.98%. This adjustment ensures that all MCX and LME approved brands with a minimum purity of 99.98% are considered Good Delivery for settlement. MCX also revised the tender period for its Base Metals contracts. Effective January 2025, the tender period for Base Metals was reduced from five days to three days for contracts expiring January 2025 onward.

Base Metal derivatives contracts have been experiencing significant deliveries since the transition of their settlement to compulsory delivery from the year 2019, underscoring the utility of delivery-based contracts in the market landscape and the efficiency of MCXCCLs delivery mechanism. Base Metals together witnessed cumulative delivery of 4,63,547 tons till March 2025, while delivery during the year 2024-25 was 69,383.50 tons.

As a part of the commitment to our stakeholders and the partner ecosystem, your Company undertakes proactive audits to strengthen its core processes, cyber security posture and adherence to regulatory guidelines. Since most of the cyber incidents happen on account of human errors, Information Security (IS) team is taking proactive IS awareness initiatives through regular cybervigilance sessions and trainings, publishing awareness magazines, conducting phishing exercise and cyber drills to take care of the human element of cyber security.

Your Company has comprehensive Information Security (IS) policy in line with the global security standards like ISO 27001:2022, incorporating regulatory guidelines from SEBI and NCIIPC and is being adhered for compliance. The Exchange has a Security Operations Centre (SOC) to provide 24x7x365 days vigilance against cyber threats and the SOC has established best in class Cyber Security Operations Centre (C-SOC) with advanced tools and professional services in a dedicated setup built for onsite operations. Your Company has implemented continuous threat exposure measures to protect the organization from potential internal & external cyber threats. Your Company has also prioritized and ensured strong data security measures by leveraging cutting- edge technologies.

Your Company remains committed to strengthening its processes and creating products to uphold the trust bestowed by its stakeholders. During the year 2024-25, your Company undertook several initiatives to remain at the forefront of product and process innovations and facilitate the development of Indias commodity derivatives market.

In response to market demand, your Company launched new products to provide trading and hedging opportunities. On 23^rd April, 2024, MCX introduced Options contracts on Crude Oil Mini and Natural Gas Mini Futures, aimed at fulfilling the requirements of smaller participants. These smaller denominated options contracts are designed to meet the needs of small and medium enterprises for price risk management while also making trading easier for retail participants by way of smaller margins.

On 15^th October, 2024, MCX launched futures contracts for Cotton Seed Wash Oil, providing price transparency and risk management tools for the edible oil industry. The Exchange also introduced Gold Ten Futures contract on 1⁵¹ April, 2025, with 10 grams gold as underlying, offering an accessible option for small investors.

Your Company has been proactively taking initiatives to raise awareness among diverse stakeholders about the significance and advantages of a well-operating, transparent commodity derivatives market. The Exchange has also been implementing various measures to educate potential hedgers on the need, benefits, and mechanisms of price risk management using exchange-traded commodity derivatives. During the year 2024-25, your Company launched multiple investor awareness campaigns to educate potential investors on investing in commodities through exchange-traded derivatives. The awareness programmes conducted were in collaboration with Exchange Members, media channels, industrial associations, banks and brokers associations, among others. The Exchange has also been conducting online outreach programmes to reach out to distant stakeholders who cannot attend these programmes in person to further promote awareness and understanding of commodity derivatives.

The details of some of such outreach initiatives are given below:

a) Your Company conducted 2,491 awareness programmes across various stakeholders during the year 2024-25. In conducting these programmes, the Exchange collaborated with organizations such as PHDCCI, FICCI, CPAI, ANMI, ASSOCHAM, the India Bullion and Jewellers Association (IBJA), the All India Gems and Jewellery Domestic Council (GJC), the Gem and Jewellery Export Promotion Council (GJEPC), the All India Jewellers & Goldsmith Federation (AIJGF), the India Lead Zinc Development Association (ILZDA), the Confederation of Indian Textile Industry (CITI India), the Fertilizer Association of India (FAI), and the Soybean Processors Association of India (SOPA), among many others. It worked with the Indian Institute of Materials Management (IIMM), Institute of Cost Accountants of India (ICMAI), the Institute of Chartered Accountants of India (ICAI), the SME Chamber of India, the Maharashtra Industry Development Association (MIDA), the North India Lead Manufacturing Association (NILMA), the Bombay Metal Exchange Ltd. (BME), and the MSME Development Forum, among others. The aim of these partnerships was to raise awareness about commodity hedging and investment among a variety of stakeholder groups.

b) A variety of media activities were conducted during 202425 using different modes such as print, TV, radio, digital, OOH and social media campaigns on YouTube, Facebook, LinkedIn, Twitter and Instagram with the objective of creating awareness about commodity derivatives markets among stakeholders and general investors. Details are provided in the Directors Report section of the Annual Report.

c) MCX conducted 655 events during the year exclusively focused on Farmer Producer Organizations (FPOs) and farmers. This was done to spread awareness amongst the farming community about how price discovery and price dissemination by exchanges can enable them to realize better prices while selling their agricultural produce. Similarly, the Exchange conducted 336 events exclusively for women participants during the year.

d) Under the aegis of SEBI, MCX observed World Investor Week during 14^th October, 2024 - 20^th October, 2024 spreading awareness and information about investment in safe and regulated marketplaces. This was part of a global initiative launched by the International Organization of Securities Commissions (IOSCO). As many as 153 investor awareness programs were conducted by the Exchange across the country, apart from undertaking several other initiatives for knowledge dissemination through quizzes, crosswords, videos, podcasts, etc. The Commodity Insights Yearbook2024, an initiative at building knowledge in commodity markets, created by MCX Investor Protection Fund in association with Indian Institute of Management Bangalore, was also released during the week.

e) To recognize and honour the performance of commodity market stakeholders and acknowledge their contribution in the growth and development of the Indian commodity derivatives market, MCX hosted the Sixth MCX Awards on 25^th September, 2024. A large number of awards were given out to stakeholders for their outstanding contribution under 25 different categories.

f) Protecting investors from misinformation and frauds, especially on electronic and social media channels, is an initiative your Company has taken up on priority. The Exchange is cognizant of the ease of investors access to markets and information through digital channels, as also the fact that digital access is accompanied with challenges like online frauds, misinformation through social media and new types of scams using technological channels and behavioural techniques. To deal with these challenges, MCX has regularly been publishing alerts to caution the public of sources providing illegal trading tips or indulging in illegitimate transactions. The Exchange has also requested concerned authorities to close down illegal websites where there was misuse of the MCX brand.

Your Company regularly engages with numerous educational institutions to spread knowledge about commodity markets among students and academicians. A large number of awareness events for the academic community were conducted during the year, in partnership with educational institutions. The Exchange also conducted the 7^th edition of MCX-IPF COMQUEST, a national- level, multi-stage educational quiz on commodity markets, culminating in the Grand Finale on 4^th March, 2025. Over 10,000 enthusiastic students representing over 650 academic institutions from 220 cities and towns registered for the quiz, which concluded with 8 competing finalists battling for the top position, after having qualified at two preliminary rounds.

MCX observed October 2024 as the Cyber Security Awareness Month, an initiative under the aegis of Indian Computer Emergency Response Team (CERT-In). Activities such as mandatory awareness trainings for all employees, Sessions & Tabletop Exercises by external experts, trainings by NCIIPC, posters & slogan making competitions, quizzes, cyber games, awards & recognition etc., were conducted by the Exchange throughout the month to create awareness on cyber security and enhance preparedness among employees against cyber-attacks.

MCX publishes various articles in print media and engages with the electronic media to create awareness about the benefits of the commodity derivatives markets. Officials of your Company write articles on issues relevant for commodity markets which are published in trade journals, newspapers, online media, and magazines with wide outreach. Awareness is also created about commodity markets, including hedging using commodity derivatives through various channels of the electronic media including regional channels.

Apart from the annual Commodity Insights Yearbook mentioned above, a monthly newsletter MCX Commodity Connect is widely circulated and uploaded on the website, which is another effective tool used to regularly communicate with the Exchanges stakeholders.

In addition, various commodity-specific brochures providing information on hedging, investment, disclosures, etc. are published in multiple languages to spread awareness about opportunities for hedging and investment in the commodity derivatives market.

Your Company took up a number of research studies on various themes connected to the commodity derivatives market. Details are provided in the Directors Report section of the Annual Report.

Over the years, your Company has established itself as a leading and reliable platform for efficient price discovery and managing the complex risks associated with commodity price volatility. The demand for these services is likely to remain at elevated levels in the times to come, which poses a positive outlook for your Company.

Assessment of global commodity markets indicate that price fluctuations are likely to continue in the near future. Several key factors contribute to this situation, including the increasing impacts of climate change, which disrupt agricultural production and supply chains, as well as geopolitical uncertainties that can lead to sudden shifts in commodity availability and pricing. Additionally, uneven economic growth across different regions and varying fiscal and monetary policies implemented by central banks worldwide adds layers of complexity to the market landscape and, thereby, volatility in commodity prices. In such a volatile environment, effective risk management, diversification of sourcing and markets, and agile business strategies have become more crucial than ever. Market participants are increasingly turning to derivative instruments for hedging price risks and navigating the uncertainties of the economy. This growing culture of proactive risk management is encouraging organizations of all sizes to seek solutions from hedging platforms such as MCX for effective risk mitigation. This evolving trend underscores the importance of strategic risk management in todays markets and presents an opportunity for your company to engage with and support these firms as they navigate the challenges of commodity price fluctuations. Your company is well-positioned to capitalize on this emerging demand.

The Indian economy is likely to continue on its high growth trajectory in the short to medium run. The National Statistical Office (NSO) of India, on 28^th February, 2025, released its Second Advance Estimates of Gross Domestic Product (GDP) for the financial year 2024- 25. According to these estimates, the real GDP growth rate is estimated at 6.5% in 2024-25, higher than the global growth. In its policy meeting in April 2025, the Reserve Bank of India (RBI) projected that Indias GDP is expected to grow at 6.5% for the year 2025- 26. The optimistic outlook is supported by strong domestic demand, increased government spending on capital projects, and a rise in foreign investment. Nevertheless, challenges such as global uncertainties and escalating geopolitical tensions could potentially impact Indias export sector.

By strategically aligning its services with market demands, leveraging the rising demand for risk management and other services in a growing economy and exploring new opportunities, your Company aims to sustain a strong growth trajectory. Your Companys commitment to resilience and proactively picking on the emerging opportunities can enable it to capitalize on these trends and drive its overall performance.

The constantly evolving demand from market participants, reinforced by supportive policies and regulatory actions, provide many opportunities to your Company. These opportunities lie in the realm of expansion of products, inclusion of more participants and developing partnerships to expand business opportunities.

Your Company is following a multi-pronged strategy to enhance participation on the Exchange platform, targeting both institutional and retail investors. Encouraging Foreign Portfolio Investors (FPIs) and Domestic Institutional Investors (DIIs) through regulatory support and tailored products, as well as simplifying their access and on-boarding processes, can enhance market liquidity. On the retail side, expanding investor education in regional languages and wide use of digital platforms, especially the popular social media applications, can improve awareness and confidence for market participation. Enhancing participation through these means is already a part of your Companys business strategy.

SEBIs efforts to enhance investor protection and spread education and awareness can go a long way in enhancing investor confidence. The Regulators recent measures to curb the influence of unregulated financial influencers are a positive step toward strengthening investor protection and ensuring transparency in the exchange-traded markets. By addressing the risks posed by misleading or unauthorised financial advice on digital platforms, SEBI is reinforcing trust among retail investors and traders. This move is expected to enhance overall market integrity and promote informed decision-making. Together with the Exchanges educational initiatives, such awareness campaigns will contribute to the growth of sustainable trading volumes on regulated platforms like MCX, where participants can operate with greater confidence and regulatory assurance.

As on 31^st March, 2025, the Exchange has 456 employees (includes confirmed employees and trainees/management trainees). Your Company continues to attract, retain and nurture talented workforce in its endeavour to be an employer of choice.

Cultural integration being an integral part of management philosophy, the Exchange, during the year, launched multiple initiatives for the employees. The primary focus was on creating a positive work environment, boosting employee engagement and building organisational capabilities.

Structured Internal Job Posting provides opportunities to deserving employees to be considered for lateral & hierarchical career growth within the organization. Human Resources continues to undertake staff welfare initiatives that include mandatory leave, compensatory offs, allowances for those employees who work on shifts, birthday cakes for the employees, internal team contests, MCX Annual Event, celebrations across festivals like Diwali, Ganpati, Navratri, Christmas, sports activities. HR constantly reviews the work policies & practices to keep them concurrent in order to make the Exchange the best place to work for. The Company provides Creche facility for female employees. Company also has tie- ups with diagnostic centres and hospitals for Health screening of employees. Company also has an in-house medical practitioner available daily on premises for consultations. We also conduct regular health related camps so that the employees follow a healthy lifestyle.

The policies were reviewed and Human Resources Manual for all employees was updated.

An Objective appraisal system based on Key Result Areas (KRAs) is in place across all levels.

HR continues to run online HR Portal called HR-Connect, for enhanced transparency in Employee Lifecycle Management covering their Training and Performance Evaluation with inbuilt modules on reviews and feedback, personal development plan and online submissions of various operational and admin requirements. Our Learning Management System - "Learnova" has been launched.

In this annual report some future developments which are expected to be implemented have been given. This has been done with a view to help investors better understand the Companys future prospects and make informed decisions while interacting with the Exchange. This annual report and other written and oral statements made from time to time may contain such forward looking statements based on Managements current plans and assumptions. It cannot be guaranteed 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 when 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.