BackFTIL loses substantial income from NSEL crisis fallout
According to FTIL's latest financial statements, total income fell nearly 72% between fiscal 2013 and fiscal 2015
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Jignesh Shah-promoted Financial Technologies (India) Ltd (FTIL) lost substantial income after a payment crisis surfaced at its subsidiary National Spot Exchange Ltd (NSEL) in July 2013, financial statements show. Income from services provided to various exchanges took the biggest hit.
According to the latest financial statements released by FTIL, total income fell nearly 72% between the financial years ended March 2013 and March 2015. NSEL, in which FTIL owns 99.99%, suspended operations in August 2013 after a ₹ 5,574.34 crore settlement crisis became public.
Total income in 2014-15 fell to ₹ 209.51 crore from ₹ 567.93 crore in 2013-14 and ₹ 746.72 crore in 2012-13.
According to the consolidated segment-wise results, income from exchange-based services like the trading platform for currency and commodity exchanges fell to ₹ 18.08 crore in the last financial year. This number was as high as ₹ 189.18 crore in the year ended March 2013.
This is the first time that FTIL has released the consolidated financial statements for financial years 2012-13 (amended), 2013-14 and 2014-15, as auditors had stated that NSEL statements for the financial year 2012-13 could not be relied upon due to the settlement crisis.
Soon after the NSEL crisis, commodity markets regulator Forward Markets Commission and capital market watchdog Securities and Exchange Board of India declared FTIL an entity unfit to hold a stake in any exchange.
While FTIL has challenged the regulatory orders, it was forced to sell its stake in Multi Commodity Exchange of India Ltd (MCX) and Metropolitan Stock Exchange of India Ltd (mSXI), formerly known as MCX Stock Exchange Ltd (MCX-SX).
This also led to a review of its technology agreement with the bourses, thereby hitting the core income segment of the company.
The company posted a net profit of ₹ 426.72 crore in the last financial year, down nearly 51% from ₹ 869.51 crore in the previous year.
The NSEL crisis also pushed up legal costs. FTIL paid ₹ 102.73 crore as legal and professional charges in the last financial year, compared with ₹ 92.06 crore in the previous year. In the year ended March 2013, only ₹ 22.1 crore was paid as legal fees.
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