MCX, the country’s largest commodity exchange, has reported that net profit in the March quarter was down three per cent at Rs 37 crore against Rs 38 crore logged in the same period last year, due largely to a write-off of Rs 20 crore spent on developing software for the spot exchange.

Income from operations increased nine per cent to Rs 106 crore (Rs 97 crore). Ebitda in the quarter jumped 22 per cent to Rs 68 crore (Rs 56 crore).

The board has recommended a final dividend of ₹ 17.40 per equity share.

The exchange had written off Rs 20 crore spent on developing software for launching the spot exchange. The exchange had entered into an agreement with a software vendor to develop a trading system for the spot market in August 2018. In line with the milestones achieved, payments were made to the vendor from time-to-time.

On account of non-fulfilment of the scope of the project within the timelines and disputes arising between the parties, the board constituted an empowered committee to evaluate the financial and technical aspects of the system developed by the vendor.

The dispute was referred to the Singapore International Arbitration Centre. The exchange and the software vendor reached an amicable out-of-court resolution which was confirmed by SIAC. Accordingly, the exchange has settled the dues and obtained the delivered codes and specification documents of the platform. Based on the recommendation of a Standing Committee on Technology, a Technical Committee thereafter evaluated the codes afresh and concluded that the codes cannot be used directly for any specific use case of the exchange.. Consequently, the entire expenditure of Rs 20.43 crore was impaired, said the exchange.

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