FTIL slumps as auditors withdraws audit report

Financial Technologies (India) lost 8.01% to Rs 153.85 at 10:47 IST on BSE after the company's auditors withdrew their audit report saying that the company's year ended 31 March 2013 standalone and consolidated results should no longer be relied upon

The company made the announcement after trading hours on Tuesday, 24 September 2013.

Meanwhile, the BSE Sensex was down 42.69 points, or 0.21%, to 19,877.52

On BSE, 12.59 lakh shares were traded in the counter compared with average volume of 16.33 lakh shares in the past one quarter.

The stock hit a high of Rs 164 and a low of Rs 143.25 so far during the day. The stock hit a 52-week low of Rs 102.05 on 30 August 2013. The stock hit a 52-week high of Rs 1,223.80 on 13 November 2012.

The stock had outperformed the market over the past one month till 24 September 2013, rising 24.66% compared with the Sensex's 7.56% gain. The scrip, however, underperformed the market in the past one quarter, sliding 77.51% as against Sensex's 7.44% rise.

The small-cap company has an equity capital of Rs 9.22 crore. Face value per share is Rs 2.

Financial Technologies (India) (FTIL) on Tuesday, 24 September 2013 said that due to purported crisis at National Spot Exchange (NSEL) in the recent past and based on the communication of management of NSEL and the statutory auditor of NSEL on the financial statements of NSEL, the statutory auditors of the company on 23 September 2013, in accordance with Standard on Auditing (SA) 560 informed that the audit reports dated 30 May 2013, on the standalone and the consolidated financial statements of the company for the year ended 31 March 2013, should no longer be relied upon. NSEL is an unlisted spot commodities exchange owned by FTIL.

FTIL said that on a conservative basis, the company has decided to defer the passing of three items on its 25th annual general meeting including consideration of audit report, dividend payment and reappointment of auditor for this financial year at the AGM. FTIL holds its annual general meeting (AGM) today, 25 September 2013 in Chennai.

FTIL added that standalone accounts for the year ended 31 March 2013 and the consolidated accounts of the company the same period may undergo amendment together with revised auditors' report which will be approved and published once the amendment to standalone and consolidated accounts is finalized.

Meanwhile, FTIL clarified that the balance sheet has already been approved and recommended to shareholders on 30 May 2013 along with the auditor's report. The purported incidence of NSEL came to the notice of FTIL on 31 July 2013.

The company added that the annual report was circulated to all the Shareholders on 30 August 2013 and the development of NSEL took place post 30 May 2013 post signing of audited accounts for the year ended 31 March 2013 and auditors' report thereon.

As per standalone financials of FTIL, the total income forms part of revenue generated from NSEL during the year ended 31 March 2013 is largely on account of technology services which contributes only 4.79% of the total income of FTIL, further there is no outstanding amount pending against the same. As per standalone financials of FTIL, the contribution from revenue generated from NSEL in the net profit is only 6.56%, the company said.

FTIL further informed that both from total income and net profit after tax perspective, the impact on account of NSEL is not material in the standalone financial statement.

Meanwhile, NSEL on Tuesday, 24 September 2013, made the sixth straight payment default, as it could pay only Rs 11.45 crore to investors out of the scheduled amount of Rs 174.72 crore.

NSEL had to shut down its operations since 1 August 2013 following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension. It has given eight-month plan to settle Rs 5574.31 crore to investors. NSEL is scheduled to make a payout every Tuesday for 30 weeks, ending in March 2014. FTIL is one of the two promoters of the NSEL.

FTIL's net profit rose 6.84% to Rs 81.21 crore on 15.44% growth in total income to Rs 169.54 crore in Q1 June 2013 over Q1 June 2012.

FTIL is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next generation financial markets, that are transparent, efficient and liquid, across all asset classes including - equities, commodities, currencies and bonds among others. The group operates one of the world's largest networks of nine exchanges connecting fast-growing economies of Africa, Middle East, India and South East Asia. The group also has five ecosystem ventures to address upstream and downstream opportunities around exchanges, including clearing, depository, information vending and payment gateway, among others.

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