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The ongoing fiasco at the National Spot Exchange (NSEL) has eaten into the profit of the company’s promoter – Financial Technologies (India) of FTIL.
Also the promoter of India’s largest commodity derivatives trading platform – Multi Commodity Exchange (MCX) – FTIL has posted a steep 61.16 per cent decline in its net profit at Rs 27.02 crore for the second quarter ended September 30, 2013 as compared to Rs 69.55 crore in the corresponding quarter of the previous year.
Total income of the company also witnessed a staggering 26 per cent fall at Rs 92.62 crore for the second quarter of the current financial year as compared to Rs 124.98 crore during the same period last year.
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The board of directors declared an interim dividend of Rs 2 per equity share of face value of Rs 2 each (i.e. 100 per cent) on equity share capital of the company.
The loss incurred by the company stands almost equivalent to the provisions made by it towards diminution from its crisis ridden subsidiary – NSEL.
In view of the developments in respect of NSEL during the quarter, on conservative basis, the company made a provision towards diminution other than temporary in value of long term investments of Rs 45 crore for its investment in NSEL.
FTIL today said in its filing on the Bombay Stock Exchange that the company, being a separate and independent entity, has no responsibility or liability towards the dues or claims against the NSEL. However, consequential impact of various writ petitions, public interest litigations, cases with the Economic Offense Wing (EOW) of the Mumbai Police and civil suits filed against NSEL wherein the company has been made a formal party, is currently not known, the company clarified. The company made this statement in a note along with its financial results.
As a goodwill gesture, FTIL helped with a onetime bridge loan of Rs.179.4 crore to the NSEL for making payment to small investors. Also, an amount of Rs 31.4 crore was realized by banks during the last six months ending September 30. FTIL had provided with an additional corporate guarantee of Rs 225 crore on behalf of NSEL for availing banking facility in relation to procurement of cotton on behalf of National Agricultural Cooperative Marketing Federation of India (NAFED).
Banks invoked the guarantee of Rs 31.43 crore as outstanding which was debited to the NSEL’s account as loan.
Therefore, the recovery of these amounts totalling Rs 212.6 crore depends upon recovery by the NSEL of its dues from its defaulting members.
