Home  »  Company  »  MMTC Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of MMTC Ltd.

Mar 31, 2016

The Company has one class of share capital, comprising ordinary shares of Rs,1/- each. Subject to the Company''s Articles of Association and applicable law, the Company''s ordinary shares confer on the holder the right to receive notice of and vote at general meetings of the Company, the right to receive any surplus assets on a winding-up of the Company, and an entitlement to receive any dividend declared on ordinary shares.

The Company does not have any holding company.

No shareholder other than the promoters is holding more than 5% shares of the company. The shareholding of the promoters i.e. President of India as on 31-03-2016 is 899,268,762 shares (P.Y. 899,268,762 shares) - 89.93%.(P.Y. 89.93%).

(a) Final Dividend @ Rs, 0.30/- (P.Y. Rs, 0.25/-)per Equity Share ofRs, 1/- each amounting to Rs, 300 million (P.Y. Rs, 250 million) during 2015-16 has been proposed.

(b) * Pertained to investment allowance reserve created prior to 1991 in respect of erstwhile MITCO, since merged with MMTC.

a) Leasehold lands, roads and culverts, sewerage, drainage and water supply for staff quarters at Delhi includes those held jointly with State Trading Corporation of India Limited (STC)Rs, 1.32 million (P.Y. Rs, 1.32 million).

b) Residential flats includes 41 shares (P.Y. 41 shares) of Cooperative Group Housing Society of the value of Rs, 0.002 million (PY Rs, 0.002 million). Conveyance of some of the flats of the original value as on 31.03.2016 amounting to Rs, 4.89 million (P.Y. Rs, 4.89 million) is pending to be executed.

c) Cost of Office Building on lands not owned by the Company is Rs, 6.24 million (P.Y. Rs, 6.24 million) and provision for depreciation is Rs, 3.62 million (P.Y. Rs, 3.57 million).

d) Cost of Water Supply on Land not owned by the Company is Rs, 0.66 million (P.Y. Rs, 0.66 million).

e) Cost of residential building, roads & culverts and electrical installations amounting to Rs, 11.63 million (P.Y. Rs, 11.63 million) & accumulated depreciation ofRs, 6.59 million (P.Y. Rs, 6.44 million) constructed on the leasehold land at Para dip which expired on 20.11.2011 Paradip Port Trust has approved its renewal for 15 years. However, final approval of Government is awaited.

f) The company has carried out the assessment of impairment of assets (Railway Wagon Rakes) & provision towards impairment loss in value of assets amounting to Rs, Nil million (P.Y. Rs, 106.87 million) has been made during the year.

1. Asset shown as Trade Investment amounting to Rs, 36.31 million (P.Y. Rs, 36.31 million) represents carrying value of property. The asset has been let out throughout the year, hence categorized as investment property in accordance with para 3.4 of AS-13 issued by ICAI and no depreciation has been charged.

2. The Company has invested Rs, 338.00 Million (P.Y Rs, 338.00 Million) towards 26% equity in Port Project, a Joint Venture of MMTC for the construction and operation of iron ore terminal at Ennore Port. The construction of terminal was completed by November 2010, the port could not be commissioned due to restrictions on mining, transportation and export of iron ore. The proposal for modification of the facility for handling of coal through Kamarajar Port Limited (KPL) (erstwhile known as Ennore Port Limited) in addition to existing facility has been approved by the Authorities. Accordingly, during the year bids were invited by KPL from prospective operators with first right of refusal to SIOTL. The price bid opening has been deferred as one of the bidders, declared not qualified by KPL on technical parameters, has challenged in the court of law. Compensation amount according to the provision of concession agreement will be paid upfront by the successful bidder to project company, in case the project company chooses not to match the H1 Bid. Accordingly, no permanent diminution in the investment has been considered by the management.

3. Against initial investment of 52 million equity shares amounting to Rs, 260 million, in the Indian Commodity Exchange (ICEX) (representing 26% holding of the company in Exchange), a provision ofRs, 241.10 million was created in 2013

14, on account of permanent diminution in the value of investment. During the year 2015-16, the aforesaid amount of provision has been written back by the management of the company considering the following events:

I. The company has divested 20 million equity shares of the exchange at a gain of 100% over its invested cost, during the month of December/January2016.

II. A Right Issue at a 100% premium was brought out by the exchange in Feb/March 2016, that got fully subscribed (MMTC did not participate in right issue).

III. The exchange has chalked out revival plan and submitted the same to the Regulator (SEBI) after due approval from the Board of the exchange.

IV. Post Right Issue, the net worth of the exchange turned positive.

4. In regard to investment ofRs, 30.00 million (P.Y Rs, 30.00 million), during the current year USE has obtained approval from SEBI, CCI & Shareholders for amalgamating USE with Bombay Stock Exchange (BSE) with 01.04.2014 as appointed date. The Hon''ble High Court Bombay has since accorded approval to the scheme of amalgamation on 24.04.2015. Consequently, the company has got 77,922 shares of BSE of face value ofRs, 1 in exchange of 3,00,00,000 shares in USE of face value ofRs, 1 (i.e 1 share of BSE for every 385 shares held in USE).

5. All Non-Current Investments are carried at cost less provision for permanent diminution in value, if any. The company is not having any quoted investments. Aggregate amount of un-quoted investments is Rs, 4608.73 million (P.Y. Rs, 4708.86 million). Aggregate amount of provision for diminution in value of investments is Rs, 47.50 million (P.Y. Rs, 288.60 million).

Out of the above amount due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member is Rs, 0.26 million (P.Y. Rs, 0.05 million).

(i) Includes Rs, 291.10 million (P.Y. Rs, 237.09 million) advanced by the company to Joint Venture Companies M/s Free Trade Warehousing Pvt. Ltd Rs, 48.68 million (P.Y. Rs, 33.32 million), Haldia Free Trade Warehousing Pvt. Ltd. Rs, 218.65 million (P.Y. Rs, 180.00 million) and Integrated Warehousing Kandla Project Development Pvt. Ltd. Rs, 23.77 million (P.Y. Rs, 23.77 million) in the form of Project Development Fund for setting up Free Trade Warehousing Projects in India. Interest accrued on above advances, Rs, 38.65 was shown as "Interest accrued but not due" as on 31-03-2015 has been merged with "Advance to Other Companies - FTWPL" as on 31-03-2016.

(ii) a) Includes Rs, 2097.92 million (P.Y Rs, 2097.92 million) recoverable from various borrowers and National Spot Exchange (NSEL) arising on account of default of payment obligation of NSEL against which full provision ofRs, 2097.92 million (P.Y Rs, 2097.92 million) has already been made during 2013-14. The Company has filed legal suit in Bombay High Court against NSEL and others and hearings are in progress. The Government has also issued final order of merger of NSEL with its parent company, Financial Technologies (FTIL) in Feb, 2016. Against this merger order, FTIL has filed a case against Government. MMTC is also one of the intervening party in the legal case supporting the merger. CBI has also registered the case and investigations are in progress.

b) Included debit balance of Rs, 51.00 million (P.Y. Rs, 51.00 million) which based on the Special Audit report of RO Chennai, has remained un-reconciled against which full provision already exist in the accounts.

As taken, valued and certified by the management.

Inventories including goods in transit are valued at lower of the cost or realizable value as on 31st March 2016. Valuation of closing stock at market price being lower than cost, has resulted in a loss ofRs, 1.14 million (P.Y Rs, 173.80 million) during the year out of which Rs, Nil (P.Y. Rs, 32.66 million) is to the account of backup supplier/handling agents and accordingly, debited to their account.

Stock-in-trade includes the following:

1) 21020 Certified Emission Reductions (CERs) and 21020 Verified Carbon Units (VCUs) and same has been valued atRs, 0.81 million (P.Y. Rs, 0.78 million) as per AS-2, i.e. lower of cost or net realizable value.

2) Nil number of CERs under certification.

3) An amount ofRs, 28.96 million has been spent on account of Depreciation, O&M cost of Emission Reduction equipment. Includes Rs, 1417.04 million (P.Y. Rs, 1478.45 million) receivable from related parties.

Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments Rs, 5.06 million (P.Y. Rs,4.78 million).

Balances with banks includes Rs, 0.59 million (P.Y. Rs, 0.31 million) for unpaid dividend.

"Cash and cash equivalents''" has been changed to "Cash and Bank balances" in accordance with provisions of Accounting Standard-3 issued by The Institute of Chartered Accountants of India.

In respect of coal imported for supply to power utilities on back to back basis, sale in some cases is booked provisionally pending confirmation of quantity/quality from the respective power plants and final reconciliation thereof with CHA/backup supplier. This has no impact on the profitability since the difference, if any, shall be to the account of the supplier/CHA in terms of the agreement.

(ii) CSR Expenditure:

- Rs, 4.05 million on installation of drinking water, creation of toilet set cat Joda/Barbil/Keonjhar/Jajpurdistrictsof Odisha.

- Rs, 0.35 million incurred on installation of hand pumps in Ghosi/Jaitwardih in Uttar Pradesh.

- Rs, 0.10 million for Clean Ganga Mission.

The expenditure has been incurred on voluntary basis as the company was not required to spend on CSR activity during the year 2015-16 as provided under Section 135 of Companies Act, 2013, since, the company did not have average net profit during the three immediately preceding financial years.

(i) Represents profit on sale of 2 crore (10%) equity shares of ICEX of face value ofRs, 5 each at a premium ofRs, 5 each.

(ii) (a) Includes Rs, 33.45 million (P.Y. Rs, 321.77 million) towards liability in respect of an arbitration award against the company on account of claim filed by a foreign supplier against invocation of Performance Bank Guarantee relating to import of urea. The award was challenged by the company in Hon''ble Delhi High Court which was not admitted. The company has since filed Special Leave petition against the said award in the Hon''ble Supreme Court which has been admitted by the Hon''ble Court. However, total liability amounting Rs, 382.21 million towards the claim (? 230.17 million), interest (Rs,134.89 million) and other cost etc. (? 17.15 million) has been made up to 31.03.2016.

(b) Includes Rs, 389.90 million (P.Y Rs, NIL million) credit on account of amount appropriated towards overdue interest on old dues recoverable from FCI out of an amount ofRs, 609.90 million retained by company against export proceeds of wheat- A/c FCI. Rs, 220 million has already been adjusted against other recoverable from FCI during the financial year 2014-15. Whereas FCI has been objecting to such retention, the company decided to appropriate the retained amount towards receivable and interest income.

(iii) - Includes Nil million (P.Y. Rs, 221.35 million) being provision for bad & doubtful debts withdrawn as a results of

recovery of dues from the customer. It also includes Rs, Nil million (P.Y. Rs, 284.53 million) being the provision no longer required in respect of debt which was written off during the 2014-15 & shown as bad debts written off in note 15 (B).

- It also includes Rs, Nil million (P.Y Rs, 145.85 million) being excess provision withdrawn in respect of ''Postretirement Medical Benefit Scheme'' consequent to change of scheme to ''Defined contribution scheme''.

- Also includes Rs, 241.10 million (P.Y. Rs, Nil million) being withdrawal of provision for permanent diminution of investment in ICEX during the year consequent upon sale of 10% stake in ICEX at a premium of 100%.

1 EXTRAORDINARY ITEMS

2. ADDITIONAL INFORMATION TO STATEMENT OF PROFIT AND LOSS:-

3. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(i) Contingent Liabilities:

a) Guarantees issued by Banks on behalf of the Company Rs, 1120.67 million (P.Y. Rs, 2039.36 million) and Corporate Guarantee amounting to Rs, Nil million (P.Y. Rs, 404.00 million) in favour of customer have been given towards performance of contract against which backup guarantees amounting to Rs, 1255.78 million (P.Y. Rs, 3764.60 million) have been obtained from associate suppliers.

b) Corporate Guarantees ofRs, 14605.60 million (P.Y. Rs, 14693.70 million) given by the company in favour of financial institutions/banks on behalf of Neelachal Ispat Nigam Limited (NINL) an Associate Company for securing principal and interest in respect of loans to NINL. The company has also issued a comfort letter in respect of a loan of Rs, 1800.00 million given to NINL by a bank against which corporate guarantee amounting to Rs, 900.00 million has been given by the company. The company has also issued standing instruction (SI) to the bank authorizing the bank to debit company''s bank account @ Rs, 25.00 million every month and credit the current account of NINL maintained in the same bank during the tenor of the loan i.e. 4 years from Oct, 2014 availed by NINL. Pending commitment against the said SI is Rs, 750.00 million as on 31.3.2016.

c) The company entered into a purchase contract with a foreign supplier for import of coking coal for onward sale to NINL (an Associate company) in the year 2008-09. Due to non-performance of the contract, the supplier referred the matter for arbitration. An award was decided against MMTC for an amount of Rs, 5216.80 million (USD 78.72 million @ Rs, 66.27 as on 31.03.2016) and interest/cost thereon up to 31.03.2016 amounting to Rs, 3304.55 million. The company challenged the award before Honble Delhi High Court but that was confirmed by the court. Against this decision of the court, the company filed an appeal before Honble Division Bench of Delhi High Court that has been admitted by the Hon,ble Division Bench of Delhi High Court. Next date of hearing is 18.07.2016.

Pending final out-come of the legal proceedings, the Management has decided not to make provision for the demand amounting to approx. Rs, 8520.99 million in its books of accounts as on 31.03.2016, since as per the legal opinion of senior advocate, the company has a strong case for rejection of the supplier''s claim. Further, as per the legal opinion taken by the company, the liability, if any on account of this claim is to be borne by NINL exclusively. The company has once again reiterated, in its communication to NINL, the legal position on bearing of liability, if any arising out of the referred dispute.

d) Claims against the Company not acknowledged as debts Rs, 4614.32 million (P.Y. Rs, 3439.48 million).

e) Letters of Credit opened by the Company remaining outstanding Rs, 1869.19 million (P.Y. Rs, 235.77 million).

f) Sales Tax Demand ofRs, 2342.94 million (P.Y. Rs, 2248.73 million) in dispute against which Rs, 181.17 million (P.Y. Rs, 183.53 million) has been deposited and Rs, 0.67 million (P.Y. Rs, 0.67 million) covered by bank guarantees.

g) Income Tax demand of Rs, 613.02 million (P.Y. Rs, 701.79 million) in dispute against which Rs, 455.56 million (P.Y. Rs, 373.70 million) has been deposited.

h) Service Tax demand in respect of business auxiliary service amounting to Rs, 942.72 million (P.Y. Rs, 849.45million).

i) TDS demand raised by department amounting Rs, 7.59 million (P.Y. Rs, Nil million).

j) Aback to back supplier of steam coal has claimed an amount ofRs, 504.30 million (P.Y. Rs, 504.30 million) towards increased railway freight, belt sampling rejection, rake rejection and interest for delayed payment in relation to Coal Supply on back to back basis to a customer during 2011-12 to 2012-13 which has been disputed by the customer.

k) Bonds have been furnished to Customs Authorities for performance, submission of original documents, etc, some of which are still outstanding. The amount of un-expired Bonds is 6842.98 million as on 31.03.2016 (P.Y. Rs, 9372.80 million), out of which, demand against show cause notices for Rs, 58.28 million (P.Y. Rs, 47.41 million) received by the company at Delhi Regional Office against which appeal has been filed by the company.

l) Custom department have raised demand ofRs, 1902.44 million (P.Y. Rs, 351.21 million) at various RO''son account of differential custom duty/interest/penalty etc. on import of Steam Coal supplied by the company to Power utilities through associate suppliers on back to back terms on fixed margin basis. Also in case of RO Kolkata and Mumbai Rs, 174.82 million (P.Y. Rs, 174.82 million) and Rs, 215.61 million (P.Y. Rs, 215.61 million) shown as firm liability respectively in their books of accounts. The liability, if any, on account of custom duty shall be to the account of the backup supplier.

m) Excise duty demand/penalty ofRs, 193.17 million (P.Y. Rs, 193.17 million) for which company has already filed an appeal before the CESTAT.

n) Asstt. Provident Fund Commissioner at SRO Bellary raised a PF Demand ofRs, 22.36 million (P.Y. Rs, 22.36 million). The company has disputed the claim based on grounds of appeal as suggested by a legal opinion.

o) In some of the cases, amounts included under contingent liabilities relate to commodities handled on Govt. of India''s account and hence the same would be recoverable from the Govt. of India.

p) Additional liability, if any, on account of sales tax demands on completion of assessments, disputed claims of some employees, non-deduction of Provident Fund by Handling Agents/Contractors, disputed rent and interest/penalty/legal costs etc., in respect of amounts indicated as contingent liabilities being indeterminable, not considered.

(ii) Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs, 7.41 million (P.Y.Rs, Nil million).

GENERAL DISCLOSURES:-

4. Following goods on account of un-billed purchases are held by the Company under deposit and shown under other current assets (note no. 7.6) as well as other current liabilities (note no. 5.3).

5. a) The company along with Government of Odisha has set up a 1.1 MT integrated steel plant in Odisha and invested

Rs, 3796.85 million (P.Y. Rs, 3796.85 million) (Note 6.2) towards 49.78% in equity capital in M/s Neelachal Ispat Nigam Ltd (NINL), an associate company.

b) The company has been extending, from time to time, short-term credit facility to NINL up to a limit ofRs, 8000 million for its day to day operational activities on continuing basis. In addition one time loan ofRs, 1300 million has been extended for debt repayment. Against this, outstanding under trade receivable (note7.3) is Rs, 1417.04 million (P.Y. Rs, 1478.45 million) and under short-term loans & advances (note 7.5) is Rs, 7866.44 million (P.Y. Rs, 7191.48 million) aggregating to Rs, 9283.48 million (P.Y. Rs, 8669.93 million).

c) The company has also given corporate guarantees amounting to Rs, 14605.60 million (P.Y. Rs,14693.70 million) in favour of FIs/Banks/others to secure the loans availed by NINL and issued standing instruction to a bank to credit NINL bank account @ Rs, 25 million every month during the tenor of the loan i.e. 4 years from October, 2014 against which pending commitment is Rs, 750 million as on 31.3.2016(note 19 (i) (b)).

d) NINL is incurring losses (Net Loss is 30.67% of sales for the F.Y.2015-16) and net asset of NINL as per their financial statements, excluding MMTC dues is Rs, 11315.64 million as on 31.3.2016. Considering the expected revival of the Steel sector globally and expected clearance of mining rights of allotted Iron Ore mine to NINL, the management has considered its investment as good.

6. In respect of GR-1 forms pertaining to period prior to 1993-94, outstanding beyond due date the Company has filed application with the authorized dealers for extension of time/waiver/write off. Pending decision on the application, the liability, if any, that may arise is unascertainable. Enforcement Directorate has imposed penalty forRs, 19.31 million (P.Y. Rs, 19.01 million) which are being contested. Against this, an amount of Rs, 0.30 million (P.Y. Rs, Nil million) has been deposited and bank guarantee ofRs, 10.30 million (P.Y. Rs, 10.30 million) furnished.

7. The company has taken decision to replace the existing ERP Package due to various changes taken place in the business model in the recent years and to also meet the latest statutory requirements.

8. The employee''s benefits provided by the Company as required under Accounting Standard 15 (Revised) are as under:-

i. Leave Encashment - Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed during service leaving a minimum balance of 15 days twice in a year.

ii. Post Retirement Medical Benefit (PRMB) - Available to retired employees at empanelled hospitals for inpatient treatment and also for OPD treatment under ‘Defined Contribution Scheme''.

iii. Gratuity-Gratuity is paid to all employees on retirement/separation based on the number of years of service. The scheme is funded by the Company and is managed by a separate Trust through LIC. In case of MICA division employees the scheme is managed directly by the company through LIC.

iv. Long Service Benefits: Long Service Benefits payable to the employees are as under:-

(a) Service Award amounting to Rs, 3,500/- for each completed year of service is payable to the employees on superannuation/voluntary retirement scheme.

(b) Compassionate Gratuity amounting to Rs, 50,000/- is payable in lump-sum to the dependants of the employee on death while in service.

(c) Payments under Employees'' Family Benefit Scheme is payable to the dependants of the employee who dies in service till the notional date of superannuation. A monthly benefit @ 40% of Basic Pay & DA last

drawn subject to a maximum ofRs, 12,000/- on rendering service of less than 20 years and similarly a monthly benefit @ 50% of Basic Pay & DA last drawn subject to maximum Rs, 12,000/- on rendering service of 20 years or more at the time of death.

(d) Special Benefit to MICA Division employees amounting to Rs, 5,00,000/- (Officer), Rs, 4,00,000/- (Staff) and Rs, 3,00,000/- (Worker) upon retirement.

v. Provident Fund - The Company’s contribution paid/payable during the year to Provident Fund is recognized in the Statement of Profit & Loss. The Company''s Provident Fund Trust is exempted under Section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment.

vi. Pension Scheme - During the year, the Company has recognized Rs, 83.38 million (P.Y. Rs, 78.84 million) towards Defined Contribution Superannuation Pension Scheme in the Statement of Profit & Loss.

vii. Other disclosures as required under AS - 15(Revised) on ''Employee Benefits'' in respect of defined benefit obligation are:

(e) In case of gratuity, the Company has taken policy from LIC to discharge its obligation and expenses are recognized based on Actuarial Valuation done by LIC.

viii. Post-Retirement Medical Benefit Scheme:

a. The liability for the year 2015-16 has been calculated at the rate of 1.50% of PBT for the retirees prior to 1.1.2007 and @ 4.50% of Basic DA in respect of serving employees as per the defined contribution scheme.

b. Pending creation of trust for management of fund, the contribution for the current year along with the liability as on 31.3.2015 has been shown as company''s obligation as on 31.3.2016 under ''Defined Contribution Scheme'' and additional contribution @ 8.50% has been added during the year in the present value of obligation being one year closer to settlement.

c. During the year, total expenses ofRs, 139.78 million (P.Y. Rs, 149.49 million) has been charged to Profit & Loss Account.

9 (A). In terms ofAS-17 the Company has identified its Primary Reportable Business Segments as Minerals, Precious Metals, Metals, Agro Products, Coal & Hydrocarbon, Fertilizer and General Trade/others. The Secondary Segments are identified based on the geographical location as Outside India and Within India.

Details are placed at Annexure ''A''.

10. Related Party Disclosures underAS-18 (As identified & certified by the Management)

b) Subsidiary MMTC Transnational Pte. Ltd., Singapore

c) Associate

Neelachal Ispat Nigam Ltd.

d) Joint Ventures

Free Trade Warehousing Pvt. Ltd.

Haldia Free Trade Warehousing Pvt. Ltd. (Subsidiary of Free Trade Warehousing Pvt. Ltd.)

Integrated Warehousing Kandla Project Development Pvt. Ltd. (Subsidiary of Free Trade Warehousing Pvt. Ltd.) MMTC Pamp India Pvt. Ltd.

MMTC Gitanjali Ltd.

Indian Commodity Exchange Ltd.

Sical Iron Ore Terminal Ltd.

TM Mining Company Limited Blue Water Iron Ore Terminal Pvt. Ltd.

The PRP shown above pertain to the Financial Year 2014-15 paid during F.Y.2015-16 on ad-hoc basis.

Remuneration paid to Mr. Ashwani Sondhi is disclosed for the whole year but he assumed the charge of Director (Marketing) on 06.01.2016.


Mar 31, 2015

1. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(i) Contingent Liabilities:

a) Guarantees issued by Banks on behalf of the Company Rs.2039.36 million (P.Y. Rs.3654.78 million) and Corporate Guarantee amounting to Rs.404.00 million (P.Y. Rs.3361.56 million) in favour of customer have been given towards performance of contract against which backup guarantees amounting to Rs.3764.60 million (P.Y. Rs.7152.38 million) have been obtained from associate suppliers.

b) Corporate Guarantees of Rs.14693.70 million (P.Y Rs.13793.70 million) given by the company in favour of financial institutions/banks on behalf of Neelachal Ispat Nigam Limited (NINL) an Associate Company for securing principal and interest in respect of loans to NINL. The company has also issued a comfort letter during the year in respect of a loan of Rs.1800.00 million given to NINL by a bank against which corporate guarantee amounting to Rs.900.00 million has been given by the company. The company has also issued standing instruction to a bank during the year authorizing the bank to debit company's bank account @ Rs.25.00 million every month and credit the current account of NINL maintained in the same bank during the tenor of the loan i.e. 4 years from Oct, 2014 availed by NINL.

c) A party has claimed an amount of Rs.4920.39 million ($ 78.72 million translated @ Rs.62.5050 being the closing rate of exchange as on 31.03.2015) (PY Rs.4716.93 million) towards non lifting of part quantity of coking coal in respect of supplies to M/s NINL, relating to delivery period 2008-09. The majority arbitration award was decided against MMTC which has been challenged before Hon'ble High Court of Delhi. The interest and cost of arbitration as per arbitration award amounts to Rs.2378.41 million as on 31.3.2015.

There is Agreement between MMTC and NINL as per which MMTC to supply raw material to NINL including imported coking coal on their behalf. Accordingly the matter regarding the dispute raised by M/s Anglo Coal towards the supply of coking coal to NINL and subsequent legal recourse taken by MMTC has been informed to NINL by MMTC from time to time.

d) Claims against the Company not acknowledged as debts Rs.3439.48 million (P.Y. Rs.3652.51 million).

e) Letters of Credit opened by the Company remaining outstandingRs.235.77 million (P.Y. Rs.6642.69 million).

f) Sales Tax Demand of Rs.2248.73 million (P.Y. Rs.2445.44 million) in dispute against which Rs.183.53 million (P.Y. Rs.192.94 million) has been deposited and Rs.0.67 million (P.Y. Rs.0.74 million) covered by bank guarantees.

g) Service Taxdemand in respect of business auxiliary service amounting toRs.849.45 million (P.Y Rs.809.70 million).

h) A backup supplier of steam coal has claimed an amount of Rs.504.30 million (P.Y. Rs.504.30 million) towards increased railway freight, belt sampling rejection, rake rejection and interest for delayed payment in relation to Coal Supply on back to back basis to a customer during 2011 -12 to 2012-13 which has been disputed by the customer.

i) Bonds have been furnished to Customs Authorities for performance, submission of original documents, etc, some of which are still outstanding. The amount of un-expired Bonds is Rs.9372.80 million as on 31.03.2015 (P.Y. Rs.7615.00 million), out of which, show cause notices for Rs.47.41 million received by the company at Delhi Regional Office during 2013-14 which is taken up with custom department.

j) Custom department have raised demand of Rs.351.21 million (P.Y. Rs.620.17 million) at various RO'son account of differential custom duty/interest/penalty etc. on import of Steam Coal supplied by the company to Power utilities through associate suppliers on back to back terms on fixed margin basis. Also in case of RO Kolkata and Mumbai Rs.174.82 million (P.Y. Rs.Nil million) and Rs.215.61 million (P.Y. Rs.Nil million) shown as firm liability respectively in their books of accounts. The liability, if any, on account of custom duty shall be to the account of the backup supplier.

k) Excise duty demand/penalty of Rs.193.17 million (P.Y. Rs.96.59 million) for which company has already filed an appeal before the CESTAT.

I) Demand of custom duty/penalty etc. of Rs.256.99 million (P.Y. Rs.256.99 million) against import of RBD Palm Oil under target plus license, appeal in respect is pending before CESTAT.

m) Asstt. Provident Fund Commissioner at SRO Bellary raised a PF Demand of Rs.22.36 million (P.Y. Rs.Nil million). The company is disputing the claim based on grounds of appeal as suggested by a legal opinion.

n) In some of the cases, amounts included under contingent liabilities relate to commodities handled on Govt, of India's account and hence the same would be recoverable from the Govt, of India.

o) Additional liability, if any, on account of sales tax demands on completion of assessments, disputed claims of some employees, non-deduction of Provident Fund by Handling Agents/Contractors, disputed rent and interest/penalty/legal costs etc., in respect of amounts indicated as contingent liabilities being indeterminable, not considered.

(ii) Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.Nil million (P.Y Rs.9.75 million).

21. The company has been extending, from time to time, unsecured short term loan facilities to Neelachal Ispat Nigam Limited (NINL) an Associate Company up to a limit of Rs. 7500.00 million together with one time loan ofRs.1300.00 million for its day to day operational activities on continuing basis. Against this limit, outstanding balance of Rs.1478.45 million (P.Y. Rs. 3494.68 million) has been shown under Note No. 7.3 'Trade Receivables' and Rs.7191.48 million (P.Y. f 2995.03 million) under Note No. 7.5 'Short Term Loans & Advances'. In addition, the company has also given corporate guarantees etc. as disclosed under 'Contingent Liabilities' at Note No. 19 (i) (b).

2. In respect of GR-1 forms outstanding beyond due date the Company has filed application with the authorized dealers for extension of time/waiver/write off. Pending decision on the application, the liability, if any, that may arise is unascertainable. Enforcement Directorate has imposed penalty for Rs. 19.01 million (P.Y. Rs. 19.81 million) which are being contested. Against this, an amount of' Nil million (P.Y. Rs. 0.30 million) has been deposited and bank guarantee ofRs.10.30 million (P.Y. Rs. 10.30 million)furnished.

3. The company has taken decision to replace the existing ERP Package due to various changes taken place in the business model in the recent years and to also meet the latest statutory requirements.

4. The employee's benefits provided by the Company as required under Accounting Standard 15 (Revised) are as under:-

i. Leave Encashment- Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed leaving a minimum balance of 15 days twice in a year.

ii. Post Retirement Medical Benefit (PRMB) -Available to retired employees at empanelled hospitals for inpatient treatment and also for OPD treatment under' Defined Contribution Scheme'.

iii. Gratuity - Gratuity is paid to all employees on retirement/separation based on the number of years of service. The scheme is funded by the Company and is managed by a separate Trust through LIC. In case of MICA division employees the scheme is managed directly by the company through LIC.

iv. Long Service Benefits: Long Service Benefits payable to the employees are as under:-

(a) Service Award amounting to Rs.2500/- for each completed year of service is payable to the employees on superannuation/voluntary retirement scheme.

(b) Compassionate Gratuity amounting to Rs. 50,000/- is payable in lump-sum to the dependants of the employee due to death in service.

(c) Payments under Employees' Family Benefit Scheme is payable to the dependants of the employee who dies in service till the notional date of superannuation. A monthly benefit @ 40% of Basic Pay & DA last drawn subject to a maximum of Rs.12000/- on rendering service of less than 20 years and similarly a monthly benefit @ 50% of Basic Pay & DAIast drawn subject to maximum Rs.12000/- on rendering service of 20 years or more at the time of death.

v. Provident Fund - The Company's contribution paid/payable during the year to Provident Fund is recognized in the Statement of Profit & Loss. The Company's Provident Fund Trust is exempted under Section-17 of Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment.

vi. Pension Scheme - During the year, the Company has recognized Rs.78.84 million (P.Y. Rs.78.17 million) towards Defined Contribution Superannuation Pension Scheme in the Statement of Profit & Loss.

vii. Other disclosures as required under AS-15 (Revised) on 'Employee Benefits' in respect of defined benefit obligation are:

(e) In case of gratuity, the Company has taken policy from LIC to discharge its obligation and expenses are recognized based on Actuarial Valuation done by LIC.

viii. During the year company has implemented certain changes in the Post Retirement Medical Benefit Scheme making it a "Defined Contribution Scheme" which is effective from 1.4.2013. Accordingly, the following accounting has been done:

a. As per the decision of management, the company's liability as on 1.4.2013 in respect of past service has been fixed at Rs. 575.78 million for open group (i.e. serving employees and retirees on or after 1.1.2007) and Rs.574.57 million in respect of retirees prior to 1.1.2007 as against the total provision of Rs.1286.20 million existed in the books as on 1.4.2013.

b. The liability for the year 2013-14 has been re-calculated at the rate of 1.50% of PBT for the retirees prior to 1.1.2007 and @ 4.50% of Basic DAin respect of serving employees amounting to total Rs. 136.14 million including interest cost of Rs.97.78 million as against total expense of Rs. 146.14 million charged to Profit & Loss Account during 2013-14 on the basis of actuarial valuation.

c. Consequently, the excess liability existing in the books as on 1.4.2014 amounting to Rs. 145.85 million has been withdrawn during the year 2014-15 in respect of (a) and (b) above.

d. Pending creation of trust for management of fund, the contribution for the current year along with the liability as on 31.3.2014 has been shown as company's obligation as on 31.3.2015 under 'Defined Contribution Scheme' and accordingly further contribution at discounting rate of 8.50% has been added during the year in the present value of obligation being one year closer to settlement.

e. During the year, total expenses of Rs. 149.49 million (P.Y. Rs. 146.14 million) has been charged to Profit & Loss Account.

5. In terms of AS-17 the Company has identified its Primary Reportable Business Segments as Minerals, Precious Metals, Metals, Agro Products, Coal & Hydrocarbon, Fertilizer and General Trade/others. The Secondary Segments are identified based on the geographical location as Outside India and Within India. Details are placed at Annexure'A.

6. As required by Accounting Standard(AS) 28 "Impairment of Assets" notified by the Institute of Chartered Accountants of India, the company has carried out the assessment of impairment of assets (Railway Wagon Rakes) & provision towards impairment loss in value of assets amounting to Rs. 106.87 million (P.Y. Rs.10.88 million) has been made during the year.

7. Income tax of f 571.07 million (P.Y. Rs. 931.62 million) under the head Short Term Loans and Advances consists of Rs. 391.52 million (P.Y. Rs. 366.63 million) paid to Income Tax Department against the disputed demands/tax liability for various assessment years (up to F.Y. 2013-14) and advance tax/TDS of Rs.179.55 million (PY Rs.564.99 million) towards income tax liability for financial year 2014-15. Provision for additional demand, if any, will be made on completion of the Appellate Proceedings.

8. The Company has filed a recovery suit of Rs. 314.02 million against M/s AIPL in respect of Mint sale transaction (P.Y. Rs. 314.02 million) which included overdue interest of Rs. 29.49 million (P.Y. Rs. 29.49 million) which has been decreed in favour of the Company. M/s AIPL have also filed a suit against Government Mint/MMTC for damages of f 1671.97 million (P.Y. Rs. 1671.97 million) which is not tenable as per legal opinion and is being contested.

9. The company had imported pulses on the directives of the Govt, of India during the year 2007-08 to 2010-11. The Government has allowed reimbursement of losses up to 15% of landed cost and trading margin @ 1.2% of CIF value. An amount of Rs. 192.90 million (P.Y. Rs. 165.53 million) including Rs.27.40 million deducted towards interest on excess payment by GOI during 2008-09, on account of claim lodged during 2011 -12 which is within 15% of landed cost, is yet to be received. The scheme was discontinued w.e.f. 2011-12. MOC has communicated that in the meeting of group of officers held under the Chairmanship of Secretary (Coordination) on 16th Dec.2014, it was decided to recommend reimbursement of losses on actual basis for all imports undertaken by PSUs under the scheme which closed on 31.03.2011 and that Department of Consumer Affairs will seek approval of CCEA for the same.

10. The Company has incurred an amount of Rs. 78.35 million (P.Y. Rs. 65.43 million) on development of Gomia Coal Block allotted to the company in the year 2006 which was shown under Capital Work-in-Progress. Consequent upon cancellation of coal block by Govt, of India, the amount shown under Capital Work-in-Progress has been charged off to revenue.

11. A claim for Rs.18.89 million (P.Y Rs.18.89 million) against an associate on account of damaged imported Polyester is pending for which a provision of f 15.28 million (P.Y. Rs. 15.28 million) exists in the accounts after taking into account the EMD and other payables amounting to RS.3.61 million (P.Y. Rs. 3.61 million). The company has requested customs for abandonment which is pending for adjudication. Acriminal & civil suit has been filed against the Associate. The associate has also submitted a proposal for consideration of Dispute Settlement Committee.

12. Particulars in respect of Loans and Advances in the nature of loans as required by Clause 32 of the Listing Agreement:

13. At Regional Office, Mumbai, during the year 2011-12, a foreign supplier has submitted forged shipping documents through banking channels to obtain payment of Rs.34.03 million (P.Y. Rs. 32.63 million) without making delivery of the material (copper). However, the company has obtained an interim stay restraining the bank from making the payment under the letter of credit with undertaking to pay interest from due date of payment. The same supplier is also fraudulently holding on to the master bills of lading of another shipment of copper which would enable the Regional Office, Mumbai to take delivery and possession of goods valued at Rs. 85.98 million (P.Y. Rs. 85.98 million), already paid for and after adjustment of EMD & payables provision for the balance amount has been made during theyear2014-15.

14. At Regional Office, Hyderabad fake bills of lading covering two shipments of copper valued at Rs. 37.52 million (P.Y. Rs.37.52 million) were received during 2011-12 through banking channels against which no material was received. The foreign supplier has been paid in full through letter of credit after the company received full payment from its Indian customer. The company has initiated legal action against the foreign supplier.

15. The company has changed following Accounting Policies during the year:

i. Accounting Policy No. 2.6 related to depreciation based on provisions of schedule II of Companies Act, 2013. Due to this, the profit of the company has been increased by Rs. 9.40 million during the year.

ii. Accounting Policy 2.10 (ii) relating to Employee Benefits, consequent upon change in Post Retirement Medical Benefit Scheme from Defined Benefit Scheme to Defined Contribution Scheme. Due to this, the profit of the company has been increased by Rs. 145.85 million during the year.

16. There are no micro, small or medium enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31a March, 2015.

17. Compliance of the Companies (Accounting Standard) Rules 2006 has been made. The Company has large number of transactions and diversified activities, which may have put operational constraints in strictly following the said rules. The deviation if any, have been stated in the accounting policies of the Company.

18. Letters have been issued to parties for confirmation of balances with the request to confirm or send comment by the stipulated date failing which balance as indicated in the letter would be taken as confirmed. Confirmation letters have not been received in a few cases. However, no adverse communication received from any party.

19. Whole time Directors are allowed usage of staff cars for private use up to 1,000 km per month on payment of Rs.2000 per month in accordance with guidelines issued by Department of Public Enterprise (GOI).

20. Figures for the previous year have been regrouped /re-cast wherever considered necessary.

21. Accounting policies and notes attached form an integral part of the financial statements.


Mar 31, 2014

1.1. TREATEMENT OF EXPENDITURE DURING PROJECT IMPLEMENTATION /CONSTRUCTION PERIOD

Expenditure during construction period is included under Pre-operative expenses and the same is being allocated to the respective fixed assets on the completion of erection/installation.

1.2. OPERATING LEASES

Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are taken to the income statement on a straight line basis over the period of lease.

Contingent rents are recognized as an expense in the income statement in the financial year in which termination takes place. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognized as an expense in the financial year in which termination takes place.

2.1. The financial statements are reported in Indian Rupee and all values are rounded to the nearest million unless otherwise stated.

3. SHAREHOLDERS'' FUND

During 2010-11, 50,000,000 shares of the company of Rs. 10/- each were divided into 500,000,000 shares of Rs. 1/- each and bonus shares were issued in the ratio of 1:1 by capitalizing a sum of Rs. 500 million from general reserve.

The Company has one class of share capital, comprising ordinary shares of Rs. 1/- each. Subject to the Company''s Articles of Association and applicable law, the Company''s ordinary shares confer on the holder the right to receive notice of and vote at general meetings of the Company, the right to receive any surplus assets on a winding-up of the Company, and an entitlement to receive any dividend declared on ordinary shares.

The Company does not have any holding company. Hence no share is held by its holding company or its subsidiaries or associates.

No shareholder other than the promoters is holding more than 5% shares of the company. The shareholding of the promoters i.e. President of India as on 31-03-2014 is 900,000,000 shares (P.Y. 993,312,000 shares)

4. Current Liabilities

4.1 SHORT TERM BORROWINGS

The loans have not been guaranteed by any of the director or others.

The loans have been taken from Banks under Cash Credit/Packing Credit Accounts/Others and are repayable within one year.

The company has not defaulted in repayment of any loan and interest thereon.

4.2 TRADE PAYABLE

Sundry Creditors include Rs. 173.66 million (P.Y. Rs. 2858.08 million) being notional value of 63 Kgs. (P.Y. 1017 Kgs.) of gold taken on loan from foreign suppliers and issued to the Customers of the Company on loan basis.

There are no micro, small or medium enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31st March, 2014.

4.3 OTHER CURRENT LIABILITIES

(i) Includes Rs. 54.65 million (P.Y. Rs. 54.24 million) towards MMTC''s share in the expenditure incurred by JV company consequent to decision of promoters to wind up the project due to delay in receipt of environment clearance.

5 NON CURRENT ASSETS

5.1 FIXED ASSETS

5.1.1 Tangible Assets

(a) Cost of office land/building/flats/culverts, sewerage and drainage in some of the offices have been accounted for provisionally pending receipt of final bills or under construction/execution of lease deed.

(b) Leasehold lands, roads and culverts, sewerage, drainage and water supply for staff quarters at Delhi includes those held jointly with State Trading Corporation of India Limited (STC).

(c) Residential flats includes 41 shares (P.Y. 41 shares) of Cooperative Group Housing Society of the value of Rs. 0.002 million (PY Rs. 0.002 million). Conveyance of some of the flats of the original value as on 31.03.2014 amounting to Rs. 4.89 million (P.Y. Rs. 4.89 million) is pending to be executed.

(c) Cost of Office Building on lands not owned by the Company is Rs. 6.24 million (P.Y. Rs. 6.24 million) and provision for depreciation is Rs. 3.45 million (P.Y. Rs. 3.32 million)

(d) Cost of Water Supply on Land not owned by the Company is Rs. 0.66 million (P.Y. Rs. 0.66 million).

(e) Cost of residential building, roads & culverts and electrical installations amounting to Rs. 11.63 million (P.Y. Rs. 11.63 million) & accumulated depreciation of Rs. 6.30 million (P.Y. Rs. 5.84 million) constructed on the leasehold land at Paradip which expired on 20.11.2011 Paradip Port Trust has approved its renewal for 15 years. However, final approval of Government is awaited.

(f) * Includes Rs. 1.04 million and 0.98 million on account of accumulated depreciation in respect of Plant & Machinery transferred by RO Ahmedabad to DRO and Mumbai respectively. Further an amount of Rs. 0.19 million accumulated depreciation upto 31.03.2013 transferred from Intangible Assets.

(g) The company has carried out the assessment of impairment of assets & provision towards impairment loss in value of assets amounting to Rs. 10.88 million (P.Y. Rs. NIL million) has been made during the year.

(ii) The Company has invested Rs. 338.00 Million (P.Y Rs. 338.00 Million) towards 26% equity in SICAL Iron ore Terminal Limited (SIOTL), a Joint Venture of MMTC for the construction and operation of iron ore terminal at Ennore Port .While the construction of terminal has been completed by November 2010, due to restrictions on mining, transportation and export of iron ore and proposal for modification and conversion of the facility for handling of coal through Kamarajar Port Limited (KPL) (erstwhile known as Ennore Port Limited) is under consideration of Government and upon receipt of its approval, necessary modification for Coal handling would be completed within 12 months in stages and operations can commence thereafter.

(iii) Against investment of Rs. 260 million (P.Y. Rs. 260 million) in Indian Commodity Exchange Limited towards 26% equity, a provision of Rs. 241.10 million (P.Y. Rs. NIL million) towards permanent diminution in value of investment has been made during the year 2013-14 due to erosion in net worth of ICEX by 92.73%.

Out of the above amount due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member is Rs. 0.19 million ( P.Y. Rs. 0.70 million).

6.1 INVENTORIES

As taken, valued and certified by the management.

Inventories including goods in transit are valued at lower of the cost or realizable value as on 31st March 2014. Valuation of closing stock at market price being lower than cost, has resulted in a loss of Rs. 76.53 million (P.Y Rs. 7.39 million) during the year.

6.2 CASH AND BANK BALANCES

Balances with banks to the extent held as margin money or security against the borrowings, guarantees, other commitments Rs. 4.76 million (P.Y. Rs. 3.00 million).

Balances with banks includes Rs. 0.13 million (P.Y. Rs. 0.07 million) for unpaid dividend.

"Cash and cash equivalents''" has been changed to "Cash and Bank balances" in accordance with provisions of Accounting Standard-3 issued by The Institute of Chartered Accountants of India.

7 EXTRAORDINARY ITEMS

Extraordinary items represent:

i. Consequent upon receipt of final report of special audit conducted by a firm of Chartered Accountants provision of Rs. NIL million ( P Y Rs. 155.44 million) made in the books of accounts against amount recoverable from debtors pertaining to previous years arising on account of certain acts of commission and omission at Regional Office, Chennai relating to Bullion transactions. The credit balance of Rs. 68.40 million (P.Y. Rs. 13.40 million) and debit balance of Rs. 51.00 million(P.Y. Rs. 48.02 million) is yet to be reconciled but full provision against the debit balance has been made. The Company has also filed a complaint with CBI who has since registered two separate FIRs and started detailed investigations. Also Directorate of Enforcement has registered an offence under Prevention of Money Laundering Act, 2002 against two ex-officials and two debtors. ii. Based upon the findings of the Special Audit conducted by KPMG a provision of Rs. NIL million (P.Y. Rs. 2288.20 million) made in the books of accounts against amount recoverable from debtors pertaining to previous years arising on account of certain acts of commission and omission at Regional Office, Hyderabad relating to Bullion transactions. The Company has also filed a complaint with CBI who has since registered FIR and started detailed investigations. iii. The Company has made provision of Rs. 2104.42 million (P.Y Rs. NIL) in the books of accounts against total amount of Rs. 2106.38 million recoverable as on 31.03.2014 from various borrowers and National Spot Exchange (NSEL) arising on account of default in payment obligation of NSEL. An amount of Rs. 1.96 Million has subsequently been realized upto 15th May, 2014. The Company has filed legal suit in Mumbai High Court against NSEL and others and criminal complaint in EOW, Delhi Police which has been transferred to CBI Mumbai.

8. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(i) Contingent Liabilities:

a) Guarantees issued by Banks on behalf of the Company Rs. 3654.78 million (P.Y. Rs. 4448.26 million) and Corporate Guarantee amounting to Rs. 3361.56 million (P.Y. Rs. 2017.15 million) in favour of customer have been given towards performance of contract against which backup guarantees amounting to Rs. 7152.38 million have been obtained from associate suppliers.

b) Corporate Guarantees of Rs. 13793.70 million (P.Y. Rs. 14409.10 million) given by the company in favour of financial institutions/banks on behalf of Neelachal Ispat Nigam Limited (NINL), steel plant jointly setup by the Company for securing principal and interest in respect of loans to NINL.

c) Claims against the Company not acknowledged as debts Rs.. 3652.51 million (P.Y. Rs. 2274.05 million).

d) Letters of Credit opened by the Company remaining outstanding Rs. 6642.69 million (P.Y. Rs. 5606.86 million).

e) Sales Tax Demand of Rs. 2445.44 million (P.Y. Rs. 988.89 million) in dispute against which Rs. 192.94 million (P.Y. Rs. 115.96 million) has been deposited and Rs. 0.74 million (P.Y. Rs. 6.74 million) covered by bank guarantees.

f) Service Tax demand in respect of business auxiliary service amounting to Rs. 809.70 million (P.Y. Rs. 486.48 million).

g) A backup supplier of steam coal has claimed an amount of Rs. 504.30 million (P.Y. Rs. NIL million) towards increased railway freight, belt sampling rejection, rake rejection and interest for delayed payment in relation to Coal Supply on back to back basis to a customer during 2011-12 to 2012-13 which has been disputed by the customer.

h) Bonds have been furnished to Customs Authorities for performance, submission of original documents, etc, some of which are still outstanding. The amount of un-expired Bonds is Rs. 7615.00 million as on 31.03.2014 (PY Rs. 1697.08 million).

i) A party has claimed an amount of Rs. 4716.93 million ($ 78.72 million translated @ Rs. 59.92 being the closing rate of exchange as on 31.03.2014) (PY Rs. 4273.71 million) along with interest @ 12% p.a. w.e.f. 30th September 2009, towards non lifting of part quantity of coking coal in respect of supplies to M/s NINL on back to back terms, relating to delivery period 2008-09. MMTC also lodged counter claim for non-supply of coking coal for the year 2009-10. The matter was under arbitration, the proceedings of which have been completed. The award has since been received on 21st May, 2014. Two of the three arbitrators have given majority award against the company and the third arbitrator has given minority award in favour of the company. The award is being legally examined and based on the legal advice further action for challenging the same in Delhi High Court shall be taken within the stipulated period. The liability, if any, on this account shall be to the account of NINL.

j) Custom department have raised demand of Rs. 620.17 million (P.Y. Rs. 1850.13 million) at various RO''s on account of differential custom duty/interest/penalty etc. on import of Steam Coal supplied by the company to Power utilities through associate suppliers on back to back terms on fixed margin basis. The liability if any on account of custom duty shall be to the account of the backup supplier.

k) Excise duty demand of Rs. 96.59 million (P.Y. Rs. NIL million) for which company has already represented before Excise Department.

l) Demand of custom duty/penalty etc. of Rs. 256.99 million (P.Y. Rs. 241.12 million) in respect of import of RBD Palm Oil against target plus license. Firm liability in respect of the same has been withdrawn during the current year based on the order of CESTAT staying recovery of the said demand and waiving the pre-deposit by virtue of prima facie case in favour of the company.

m) In some of the cases, amounts included under contingent liabilities relate to commodities handled on Govt. of India''s account and hence the same would be recoverable from the Govt. of India.

n) Additional liability, if any, on account of sales tax demands on completion of assessments, disputed claims of some employees, non-deduction of Provident Fund by Handling Agents/Contractors, disputed rent and interest/penalty/legal costs etc., in respect of amounts indicated as contingent liabilities being indeterminable, not considered.

(ii) Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 9.75 million (P.Y. Rs. 2.82 million).

9. Following goods on account of un-billed purchases are held by the Company under deposit and shown under other current assets (note no. 7.6) as well as other current liabilities ( note no. 5.3) .

10. In respect of GR-1 forms outstanding beyond due date the Company has filed application with the authorized dealers for extension of time/waiver/ write off. Pending decision on the application, the liability, if any, that may arise is unascertainable. Enforcement Directorate has imposed penalty for Rs. 19.81 million (P.Y. Rs. 19.81 million) which are being contested. Against this, an amount of Rs. 0.30 million (P.Y. Rs. 0.30 million) has been deposited and bank guarantee of Rs. 10.30 million (P.Y. Rs. 10.30 million) furnished.

11. The company has taken decision to replace the existing ERP Package due to various changes taken place in the business model in the recent years and to also meet the latest statutory requirements.

12. The employee''s benefits provided by the Company as required under Accounting Standard 15 (Revised) are as under:- i. Leave Encashment – Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed leaving a minimum balance of 15 days twice in a year.

ii. Post Retirement Medical Benefit (PRMB) – Available to retired employees at empanelled hospitals for inpatient treatment and also for OPD treatment subject to a ceiling fixed by the Company. The DPE guidelines provides for creation of separate corpus for employees retired prior to 01.01.2007 and those retiring after 01.01.2007. The Company is having as existing Post Retirement Medical Scheme. The Company has been providing liabilities based on Actuarial Valuation as per the scheme.

During the current year Company has taken decision to create a corpus and its management through a trust which will be implemented from 2014-15 and accordingly notified a revised scheme for employees retired prior to 01.01.2007. After creation of trust and corpus, contribution to the corpus will be regulated in accordance with the DPE guidelines from 2014-15.

iii. Gratuity - Gratuity is paid to all employees on retirement/separation based on the number of years of service. The scheme is funded by the Company and is managed by a separate Trust through LIC. In case of MICA division employees the scheme is managed directly by the company through LIC.

iv. Long Service Benefits : Long Service Benefits payable to the employees are as under:- (a) Service Award amounting to Rs. 2500/- for each completed year of service is payable to the employees on superannuation/voluntary retirement scheme.

(b) Compassionate Gratuity amounting to Rs. 50,000/- is payable in lump-sum to the dependants of the employee due death in service.

(c) Payments under Employees'' Family Benefit Scheme is payable to the dependants of the employee who dies in service till the notional date of superannuation. A monthly benefit @ 40% of Basic Pay & DA last drawn subject to a maximum of Rs. 12000/- on rendering service of less than 20 years and similarly a monthly benefit @ 50% of Basic Pay & DA last drawn subject to maximum Rs. 12000/- on rendering service of 20 years or more at the time of death.

v. Provident Fund – The Company''s contribution paid/payable during the year to Provident Fund is recognized in the Statement of Profit & Loss. The Company''s Provident Fund Trust is exempted under Section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-à-vis statutory rate. The company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment.

vi. Pension Scheme – During the year, the Company has recognized Rs. 78.17 million (P.Y. Rs. 62.77 million) towards Defined Contribution Superannuation Pension Scheme in the Statement of Profit & Loss.

(f) In case of gratuity, the Company has taken policy from LIC to discharge its obligation and expenses are recognized based on Actuarial Valuation done by LIC.

(g) Present value of obligation in respect of Post Retirement Medical Benefit amounted to Rs. 1368.32 million (P.Y. Rs. 1286.21 million) as on 31.03.2014 as per Actuarial Valuation and accordingly liability has been created in terms of AS-15. The Company has also obtained second Actuarial Valuation of present value of obligation as on 31.03.2013 for the purpose of allocation of corpus between employees retired prior to 01.01.2007 and retiring after 01.01.2007. The effect of change in present value of obligation as on 31.03.2013 from Rs. 1286.21 million to Rs. 1150.31 million as reflected in the second actuarial valuation has been duly considered under ''Actuarial gain and losses in the actuarial valuation done as at 31.03.2014 and accounted for accordingly.

13. In terms of AS-17 the Company has identified its Primary Reportable Business Segments as Minerals, Precious Metals, Metals, Agro Products, Coal & Hydrocarbon, Fertilizer and General Trade/others. The Secondary Segments are identified based on the geographical location as Outside India and Within India. Details are placed at Annexure ''A''.

14. Related Party Disclosures under AS-18 (As identified & certified by the Management)

A. Name of the related parties and description of relationship:

a) Key Management Personnel

i. Shri D.S. Dhesi Chairman-cum Managing Director

ii. Shri Ved Prakash Director

iii. Shri Rajeev Jaideva Director

iv. Shri M.G. Gupta Director

v. Shri Anand Trivedi Director

vi. Shri P.K.Jain Director (w.e.f. 15.05.2013)

b) Subsidiary

MMTC Transnational Pte. Ltd., Singapore

c) Associate

Neelachal Ispat Nigam Ltd.

Devona Thermal Power & Infrastructure Ltd.

d) Joint Ventures

Free Trade Warehousing Pvt. Ltd

Haldia Free Trade Warehousing Pvt. Ltd.

Greater Noida Integrated Waresousing Pvt. Ltd.

Integrated Warehousing Kandla Project Development Pvt. Ltd.

MMTC Pamp India Pvt. Ltd.

MMTC Gitanjali Ltd.

Indian Commodity Exchange Ltd.

Sical Iron Ore Terminal Ltd.

TM Mining Company Limited

Blue Water Iron Ore Terminal Pvt. Ltd.

15. As required by Accounting Standard(AS) 28 " Impairment of Assets " notified by the Institute of Chartered Accountants of India, the company has carried out the assessment of impairment of assets & provision towards impairment loss in value of assets amounting to Rs. 10.88 million (P.Y. Rs. NIL million) has been made during the year.

16. Income tax of Rs. 931.62 million (P.Y. Rs. 1204.71 million) under the head Short Term Loans and Advances consists of Rs. 366.63 million (P.Y. Rs. 357.23 million) paid to Income Tax Department against the disputed demands of Rs. 592.96 million (P.Y. Rs. 367.16 millions) for various assessment years and advance tax/TDS of Rs. 564.99 million (PY Rs. 847.48 million) towards income tax liability for financial years 2013-14. Provision for additional demand, if any, will be made on completion of the Appellate Proceedings.

17. An amount of Rs. 284.53 million (P.Y. Rs. 284.53 million) is outstanding against M/s AIPL in respect of Mint silver transaction against which full provision has been made. The Company has filed a recovery suit of Rs. 314.02 million (P.Y. Rs. 314.02 million) which includes overdue interest of Rs. 29.49 million (P.Y. Rs. 29.49 million) which has been decreed in favour of the Company. M/s AIPL have also filed a suit against Government Mint/MMTC for damages of Rs. 1671.97 million (P.Y. Rs. 1671.97 million) which is not tenable as per legal opinion and is being contested.

18. The company had imported pulses on the directives of the Govt. of India during the year 2007-08 to 2010-11. The Government has allowed reimbursement of losses up to 15% of landed cost and trading margin @ 1.2% of CIF value. An amount of Rs. 165.53 million (P.Y. Rs. 165.53 million) on account of claim lodged during 2011-12 which is within 15% of landed cost, is yet to be received. Further an amount of Rs. 27.40 million is also shown recoverable from GOI which has been deducted towards interest on excess payment made by GOI during 2008-09. The scheme was discontinued w.e.f. 2011-12.

19. A claim for Rs. 18.89 million (P.Y. Rs. 18.89 million) against an associate on account of damaged imported Polyester is pending for which a provision of Rs. 15.28 million (P.Y. Rs. 15.28 million) exists in the accounts after taking into account the EMD and other payables amounting to Rs. 3.61 million (P.Y. Rs. 3.61 million). The company has requested customs for abandonment which is pending for adjudication. A criminal & civil suit has been files against the Associate. The associate has also submitted a proposal for consideration of Dispute Settlement Committee.

20. Particulars in respect of Loans and Advances in the nature of loans as required by Clause 32 of the Listing Agreement:

A) Loans and Advances given to Associates in the nature of advances (Interest Free):

B) Particulars of Investments by the Loanees: Rs. NIL (PY Rs. NIL)

21. Letters have been issued to parties for confirmation of balances with the request to confirm or send comment by the stipulated date failing which balance as indicated in the letter would be taken as confirmed. Confirmation letters have not been received in a few cases. However, no adverse communication received from any party.

22. At Regional Office, Mumbai, during the year 2011-12, a foreign supplier has submitted forged shipping documents through banking channels to obtain payment of Rs. 32.63 million (P.Y. Rs. 29.64 million) without making delivery of the material (copper). However, the company has obtained an interim stay restraining the bank from making the payment under the letter of credit with undertaking to pay interest from due date of payment. The same supplier is also fraudulently holding on to the master bills of lading of another shipment of copper which would enable the Regional Office, Mumbai to take delivery and possession of goods valued at Rs. 85.98 million (P.Y. Rs. 85.98 million), already paid for and received at the Indian port whose legal judgment is expected soon. Against this the company is holding EMD of Rs. 44.51 million from the backup customer.

23. At Regional Office, Hyderabad fake bills of lading covering two shipments of copper valued at Rs. 37.50 million (P.Y. Rs. 37.50 million) were received during 2011-12 through banking channels against which no material was received. The foreign supplier has been paid in full through letter of credit after the company received full payment from its Indian customer. The company has initiated legal action against the foreign supplier.

24. The Company has incurred an amount of Rs. 65.43 million (P.Y Rs. 54.86 million) on development of Gomia Coal Block allotted to the company in the year 2006 which has been shown under ''Capital Work in Progress''. During the year, the Ministry of Coal has demanded a bank guarantee of Rs. 298.00 million from the company due to delay in development of the block. The matter has been taken up with the Ministry of Coal to waive the BG keeping in view Coal Methane Block (CBM) allotted to ONGC in 2002 for gas extraction. The final outcome is awaited.

25. The company has reworded its Accounting Policy No. 2.17 II (i) to read as "Contingent liabilities are not recognized but are disclosed in the Notes to the Accounts. Interest, if any on contingent liabilities are generally not disclosed in the Notes to the Accounts being indeterminable" so as to clarify the accounting practice followed by the Company.

The above changes have no financial impact on the company.

26. There are no micro, small or medium enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31st March, 2014.

27. Compliance of the Companies (Accounting Standard) Rules 2006 has been made. The Company has large number of transactions and diversified activities, which may have put operational constraints in strictly following the said rules. The deviation if any, have been stated in the accounting policies of the Company.

28. Whole time Directors are allowed usage of staff cars for private use up to 1,000 km per month on payment of Rs. 2000 per month in accordance with guidelines issued by Department of Public Enterprise (GOI).

29. Figures for the previous year have been regrouped / re-casted wherever considered necessary.

30. Accounting policies and notes attached form an integral part of the financial statements.


Mar 31, 2013

1. General Information:

The company is incorporated and domiciled in India, and a Mini- Ratna public sector undertaking under the administrative control of Ministry of Commerce & Industry, Government of India. The registered office of the Company is situated at Core-1, Scope Complex, 7, Institutional Area, Lodi Road, New Delhi-110003, India. The company has 13 regional offices at various places in India and a wholly owned subsidiary MMTC Transnational Pte Ltd. (MTPL), Singapore.

The principal activities of the Company are export of Minerals and import of Precious Metals, Non-ferrous metals, Fertilizers, Agro Products, coal and hydrocarbon etc.

The company''s trade activities span across various countries in Asia, Europe, Africa, Middle East, Latin America and North America.

2 EXTRAORDINARY ITEMS

Extraordinary items represent:

i. Consequent upon receipt of final report of special audit conducted by a firm of Chartered Accountants provision of Rs. 155.44 million ( P Y Rs. 1002.05 million) made in the books of accounts against amount recoverable from debtors pertaining to previous years arising on account of certain acts of commission and omission at Regional Office, Chennai relating to Bullion transactions. The balance of debtors has been re stated and credit balance of Rs. 13.40 million and debit balance of Rs. 48.02 million is yet to be reconciled but complete provision of Rs. 1157.49 million against the debit balance has been made. The Company has also filed a complaint with CBI who has since registered two separate FIRs and started detailed investigations. Also Directorate of Enforcement has registered an offence under Prevention of Money Laundering Act, 2002 against two ex-officials and two debtors.

ii. Based upon the findings of the Special Audit conducted by KPMG a provision of Rs. 2288.20 million ( P Y Rs. NIL million) made in the books of accounts against amount recoverable from debtors pertaining to previous years arising on account of certain acts of commission and omission at Regional Office, Hyderabad relating to Bullion transactions. The Company has also filed a complaint with CBI who has since registered FIR and started detailed investigations.

3. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(i) Contingent Liabilities:

a) Guarantees issued by Banks on behalf of the Company Rs. 4448.26 million (P.Y. Rs. 1460.40 million) and Corporate Guarantee amounting to Rs. 2017.15 million (P.Y. Rs. 360.40 million) in favour of customer has been given towards performance of contract against which backup guarantee have been obtained from associate suppliers.

b) Corporate Guarantees of Rs. 14409.10 million (P.Y. Rs. 14409.10 million) given by the company in favour of financial institutions/banks on behalf of Neelachal Ispat Nigam Limited (NINL) for securing principal and interest in respect of loans to NINL.

c) Claims against the Company not acknowledged as debts Rs.. 2274.05 million (P.Y. Rs. 816.88 million).

d) Letters of Credit opened by the Company remaining outstanding Rs. 5606.86 million (P.Y. Rs. 8493.22 million).

e) Bills discounted with banks Rs. Nil million (P.Y. Rs. 7.01 million).

f) Sales Tax Demand of Rs. 988.89 million (P.Y. Rs. 995.70 million) in dispute against which Rs. 115.96 million (P.Y. Rs. 94.92 million) has been deposited and Rs. 6.74 million (P.Y. Rs. 6.74 million) covered by bank guarantees.

g) Service Tax demand in respect of business auxiliary service amounting to Rs. 486.48 million (P.Y. Rs. 470.38 million).

h) Bonds have been furnished to Customs Authorities for performance, submission of original documents, etc, some of which are still outstanding. The amount of un-expired Bonds is Rs. 1697.08 million as on 31.03.2013 (PY Rs. 987.79 million).

i) Additional liability, if any, on account of sales tax demands on completion of assessments, disputed claims of some employees, non-deduction of Provident Fund by Handling Agents/Contractors, disputed rent and interest/penalty/legal costs etc., in respect of amounts indicated as contingent liabilities being indeterminable, not considered.

j) A party has served a legal notice for non lifting of part quantity of coking coal in respect of supplies to M/s NINL, relating to delivery period 2008-09, claiming an amount of Rs. 4273.71 million ($ 78.72 million translated @ Rs. 54.29 being the closing rate of exchange as on 31.03.2013) ( PY Rs. 4005.00 million) along with interest @ 12% p.a. w.e.f. 30th September 2009, which has been refuted since the same is not tenable. MMTC has also put the party on notice to lodge counter claim for non supply of coking coal for the year 2009-10. The matter has been taken up at Govt. level as the supplier is also one of the major supplier of coking coal to other PSUs and all terms, conditions and prices are determined by an Empowered Joint Committee consisting of senior level nominees of Govt. and PSUs.

k) Custom department have raised demand of Rs. 1850.13 million (P.Y. NIL million) at various RO''s during the current year on account of differential custom duty on import of Steam Coal supplied by the company to Power utilities through associate suppliers on back to back terms on fixed margin basis. The liability if any on account of custom duty or sales tax shall be to the account of the backup supplier.

l) In some of the cases amounts included under contingent liabilities relate to commodities handled on Govt. of India''s account and hence the same would be recoverable from the Govt. of India.

(ii) Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 2.82 million (P.Y. Rs. NIL million).

GENERAL DISCLOSURES:-

4. Following goods on account of un-billed purchases are held by the Company under deposit and shown under other current assets (note no. 7.6) as well as other current liabilities ( note no. 5.3) .

5. The Company being the nominated agency for import of Gold and Silver has imported Gold under usance L/Cs or availed buyer''s credit. Money received towards sale value are put under Fixed Deposits with banks as margin or otherwise. Interest earned thereon relating to payment received from customers before due date of usance L/C or the buyer''s credit is payable to the customers as a business policy.

6. Based on interim orders of Hon''ble Supreme Court of Small Causes in the matter of mesne profit for the period from June,2000 to March,2002 relating to office premises at Mumbai, an amount of Rs. 30.00million has been deposited with the Court and based on Final Order of Hon''ble Supreme Court Rs. 20.00 million is payable as final settlement amount liability for the full amount exist in accounts. Cheque has been issued by the Mumbai RO after deducting TDS but same has not been accepted by the party and the matter has been referred to the Court, where the decision is pending. Adjustment if any shall be made in accounts after receipt of filnal orders of the court.

7 In respect of GR-1 forms outstanding beyond due date the Company has filed application with the authorized dealers for extension of time/waiver/ write off. Pending decision on the application, the liability, if any, that may arise is unascertainable. Enforcement Directorate has imposed penalty for Rs. 19.81 million (P.Y. Rs. 23.33 million) which are being contested. Against this, an amount of Rs. 0.30 million (P.Y. Rs. 1.60 million) has been deposited and bank guarantee of Rs. 10.30 million (P.Y. Rs. 10.30 million) furnished.

8. The company has taken decision to replace the existing ERP Package due to various changes taken place in the business model in the recent years and to also meet the latest statutory requirements.

9. The employee''s benefits provided by the Company as required under Accounting Standard 15 (Revised) are as under:-

i. Leave Encashment - Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed leaving a minimum balance of 15 days twice in a year.

ii. Post Retirement Medical Benefit (PRMB) - Available to retired employees at empanelled hospitals for inpatient treatment and also for OPD treatment.

iii. Gratuity - Gratuity is paid to all employees on retirement/separation based on the number of years of service. The scheme is funded by the Company and is managed by a separate Trust through LIC. In case of MICA division employees the scheme is managed directly by the company through LIC.

iv. Long Service Benefits : Long Service Benefits payable to the employees are as under:-

(a) Service Award amounting to Rs. 2500/- for each completed year of service is payable to the employees on superannuation/voluntary retirement scheme.

(b) Compassionate Gratuity amounting to Rs. 50,000/- is payable in lump-sum to the dependants of the employee due death in service.

(c) Payments under Employees'' Family Benefit Scheme is payable to the dependants of the employee who dies in service till the notional date of superannuation. A monthly benefit @ 40% of Basic Pay & DA last drawn subject to a maximum of Rs. 12000/- on rendering service of less than 20 years and similarly a monthly benefit @ 50% of Basic Pay & DA last drawn subject to maximum Rs. 12000/- on rendering service of 20 years or more at the time of death.

10. In terms of AS-17 the Company has identified its Primary Reportable Business Segments as Minerals, Precious Metals, Metals, Agro Products, Coal & Hydrocarbon, Fertilizer and General Trade/others. The Secondary Segments are identified based on the geographical location as Outside India and Within India. Details are placed at Annexure ''A''.

11. Related Party Disclosures under AS-18 (As identified & certified by the Management)

A. Name of the related parties and description of relationship:

a) Key Management Personnel

i. Shri D.S. Dhesi Chairman-cum Managing Director (w.e.f.08.10.2012)

ii. Smt. Vijaylaxmi Joshi Chairman-cum Managing Director (upto 05.10.2012)

iii. Shri Sunir Khurana Director (up to 18.09.2012)

iv. Shri Ved Prakash Director

v. Shri Rajeev Jaideva Director

vi. Shri M.G. Gupta Director

vii. Shri Anand Trivedi Director(w.e.f. 03.07.2012)

viii. Shri P.K.Jain Director (w.e.f. 15.05.2013)

b) Subsidiary

MMTC Transnational Pte. Ltd., Singapore

c) Associate

Neelachal Ispat Nigam Ltd.

Devona Thermal Power & Infrastructure Ltd.

d) Joint Ventures:-

Free Trade Warehousing Pvt. Ltd Haldia Free Trade Warehousing Pvt. Ltd.

Greater Noida Integrated Waresousing Pvt. Ltd.

Integrated Warehousing Kandla Project Development Pvt. Ltd.

MMTC Pamp India Pvt. Ltd.

MMTC Gitanjali Private Ltd.

Indian Commodity Exchange Ltd.

Sical Iron Ore Terminal Ltd.

TM Mining Company Limited

Blue Water Iron Ore Terminal Pvt. Ltd.

12. As required by Accounting Standard(AS) 28 " Impairment of Assets " notified by the Institute of Chartered Accountants of India, the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

13. Income tax of Rs. 1204.71 million (P.Y. Rs. 1325.78 million) under the head Short Term Loans and Advances consists of Rs. 357.23 million (P.Y. Rs. 293.80 million) paid to Income Tax Department against the disputed demands of Rs. 367.16 million (P.Y. Rs. 293.80 millions) for various assessment years and advance tax/TDS of Rs. 847.48 million (PY Rs. 1031.98 million) towards income tax liability for financial years 2011-12 & 2012-13. Provision for additional demand, if any, will be made on completion of the Appellate Proceedings.

14. In respect of a case relating to Sterlite, which is still pending in the Court, principle amount of Rs. 157.37 million (P.Y. Rs. 157.37 million) had already been deposited with the court in earlier years by providing full liability. Upon the order of Honorable High Court of Bombay, an amount of Rs. 144.63 million toward interest has also been deposited with court during the current year by charging the same to revenue as exceptional item.

15. An amount of Rs. 284.53 million (P.Y. Rs. 284.53 million) is outstanding against M/s AIPL in respect of Mint silver transaction against which full provision has been made. The Company has filed a recovery suit of Rs. 314.02 million (P.Y. Rs. 314.02 million ) which includes overdue interest of Rs. 29.49 million( P.Y. Rs. 29.49 million ) which has been decreed in favour of the Company. M/s AIPL have also filed a suit against Government Mint/MMTC for damages of Rs. 1671.97 million ( L.Y. Rs. 1671.97 million ) which is not tenable as per legal opinion and is being contested.

16. The company had imported pulses on the directives of the Govt. of India during the year 2007-08 to 2010-11. The Government has allowed reimbursement of losses up to 15% of landed cost and trading margin @ 1.2% of CIF value. An amount of Rs. 193.50 million (P.Y. Rs. 77.10 million) towards in excess of 15% claim booked in earlier years, has been withdrawn during the current year. The scheme was discontinued w.e.f. 2011-12

17. Against the disputed demand of custom duty, penalty etc amounting to Rs. 241.12 million (P.Y. Rs. 241.12 million) in respect of utilization of Target Plus License for import of RBD palmolin oil, liability of Rs. 241.12 million (P.Y. Rs. 241.12 million) already exists in the accounts. Liability on account of interest, if any, will be provided on final decision of the case.

18. A claim for Rs. 18.89 million (P.Y. Rs. 18.89 million) against an associate on account of damaged imported Polyester is pending for which a provision of Rs. 15.28 million (P.Y. Rs. 15.28 million) exists in the accounts after taking into account the EMD and other payables amounting to Rs. 3.61 million (P.Y. Rs. 3.61 million). The company has requested customs for abandonment which is pending for adjudication. A criminal & civil suit has been files against the Associate. The associate has submitted a proposal for consideration of Dispute Settlement Committee and accordingly paid an amount of Rs. NIL (P.Y. Rs. 1.73 million) during the year.

19. Letters have been issued to parties for confirmation of balances with the request to confirm or send comment by the stipulated date failing which balance as indicated in the letter would be taken as confirmed. Confirmation letters have not been received in a few cases. However, no adverse communication received from any party.

20. At Regional Office, Mumbai, during the year 2011-12, a foreign supplier has submitted forged shipping documents through banking channels to obtain payment of Rs. 29.94 million without making delivery of the material (copper). However, the company has obtained an interim stay restraining the bank from making the payment under the letter of credit. The same supplier is also fraudulently holding on to the master bills of lading of another shipment of copper which would enable the Regional Office, Mumbai to take delivery and possession of goods valued at Rs. 85.98 million, already paid for and received at the Indian port.

21. At Regional Office, Hyderabad fake bills of lading covering two shipments of copper valued at Rs. 37.50 million (P.Y. 37.50 miliion were received during 2011-12 through banking channels against which no material was received. The foreign supplier has been paid in full through letter of credit after the company received full payment from its Indian customer. The company has initiated legal action against the foreign supplier.

22. The company has made certain changes in the Accounting Policies during the year as under:-

i. Accounting Policy No. 2.1 has been reworded to read as "The Financial Statements have been prepared as of a going concern on historical cost convention and in accordance with the mandatory Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956."

ii. Accounting Policy No. 2.2 (a) has been reworded to read as "Purchases and sales are booked on performance of the contract/agreement entered into with the sellers/buyers or against allocation letter received from government. Wherever there is part performance of such contract/agreement/allocation, the part completed is booked as Purchase/Sale" so as to disclose the correctly the practice followed by the company.

iii. Accounting Policy No. 2.2 (d) "Sale during the course of import by transfer of documents of title i.e. high seas sale is booked upon transfer of such documents of title to the goods to buyer before the goods cross the custom frontiers of India" and 2.2 (e) "Purchase/Sale is booked in respect of trade done through commodity exchange like National Spot Exchange backed by physical delivery of goods" has been added to clarify the accounting practice followed by the company.

iv. Accounting Policy No. 2.6 (E) has been reworded by adding the words "as cost of Mobile handsets is reimbursed to officials as per their entitlement, against purchase by the officials in their own name which are not returned to the Company" so as to clarify the basis of charging the cost of mobile sets to revenue.

v. Accounting Policy No. 2.19 has been added related to Operating Lease.

The above changes have no financial impact on the company.

23. Final Dividend @ Rs. 0.10/- per Equity Share of Rs. 1/- each amounting to Rs. 10 crore during 2012-13 has been proposed out of the profit of the previous financial years and remaining undistributed.

24. There are no micro, small or medium enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31st March, 2013.

25. Compliance of the Companies (Accounting Standard) Rules 2006 has been made. The Company has large number of transactions and diversified activities, which may have put operational constraints in strictly following the said rules. The deviation if any, have been stated in the accounting policies of the Company.

26. Whole time Directors are allowed usage of staff cars for private use up to 1,000 km per month as specified in the contractual terms of appointment on payment of Rs. 520 per month for cars below 16 HP and Rs. 780 for cars above 16 HP.

27. Figures for the previous year have been regrouped / re-casted wherever considered necessary.

28. Accounting policies and notes attached form an integral part of the financial statements.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 0.36 million (P.Y. Rs. 19.50 million).

2. Loans and Advances and Sundry Creditors include Rs. 8253.95 million (P.Y. Rs. 7414.99 million) being notional value of 5117 Kgs. (P.Y. 4973 Kgs)ofgold belonging to foreign suppliers issued on loan basis to the Associates/Customers of the Company.

3. In respect of GR-1 forms outstanding beyond due date the Company has filed application with the authorized dealers for extension of time/waiver/ write off. Pending decision on the application, the liability, if any, that may arise is unascertainable. Enforcement Directorate has imposed penalty for Rs. 19.53 million (P.Y. Rs. 19.53 million) which are being contested. Against this, an amount of Rs. Nil million (P.Y. Rs Nil million) has been deposited and bank guarantee of Rs. 7.30 million (P.Y. Rs. 7.30 million) furnished.

4. Duty Credit Authorization of Rs. 502.06 million (P.Y. Rs. 526.62 million) under the Target Plus Scheme 2004-05 which is valid upto 28.02.2011, is held by the Company for duty free imports as admissible under the Scheme.

5. The Company being the nominated agency for import of Gold and Silver has imported Gold under usance L/Cs or availed buyers credit. Money received towards sale value are put under Fixed Deposits with banks as margin or otherwise. Interest earned thereon due to payment received from customers before due date of usance L/C or the buyers credit is payable to the customers as a business policy.

6. Loans & Advances include Rs. 157.37 million (P.Y.Rs.157.37 million) being the amount deposited with the High Court in respect of a case which is still pending. Necessary liability towards principal amount already exists and the provision, if any, towards interest of Rs. 22.50 million (P.Y. Rs. 22.50 million) will be made after final decision of the Court.

7. Income tax of Rs. 1952.33 million (P.Y. Rs. 2233.46 million) under the head "Loans and Advances- consists of Rs. 303.52 million (PY Rs. 424.13 million) paid to Income Tax Department against the disputed demands of Rs. 342.65 million (P.Y. Rs. 457.06 millions) for various assessment years and advance tax/TDS/FBT of Rs. 1648.81 million (PYRs. 1809.33 million) towards income tax/fringe benefit tax liability for financial years 2008-09 & 2009-10. Provision for additional demand, if any, will be made on completion of the Appellate Proceedings.

8. The ERP package "RAMCO" implemented by the Company has more or less stabilized. Any further adjustments in processes and systems that may arise subsequent upon the findings of the systems audit shall be incorporated in due course.

9. Valuation of closing stock at market price being lower than cost, has resulted in a loss of Rs. 18.21 million (P.Y Rs.587.35 million) during the year.

10. An amount of Rs. 284.53 million (L.Y. Rs.284.53 million) is outstanding against M/s AIPL in respect of Mint silver transaction against which full provision amounting to Rs. 284.53 million (L.Y. Rs.284.53 million) has been made in the accounts pending adjustment, if any, of excess sale realization. The Company has filed a recovery suit of Rs. 314.02 million ( L.Y. Rs 314.02 million ) which includes overdue interest of Rs. 29.49 million( L.Y. Rs 29.49 million ). M/s AIPL have also filed a suit against Government Mint/MMTC for damages of Rs. 1671.97 million (L.Y. Rs 1671.97 million ) which is not tenable as per legal opinion and is being contested.

11. During the year the company has imported pulses on the directives of the Govt, of India. The Government has allowed reimbursement of losses up to 15% and trading margin @ 1.2%, which works out to Rs 311.77 million (L.Y. Rs 1004.67 million) on the import made by the company which has been credited to Profits Loss Account as claims receivable from the Government.

12. During the year an amount of Rs 241.80 million ( L.Y. Rs 234.84 million ) towards difference in exchange has been shown under cost of sales which has arisen mainly due to adoption of notional exchange rate applicable on the date of bills of lading for initial recognition in reporting currency in respect of import purchases / export sales denominated in foreign currency.

13. In respect of coal imported for NTPC supply, sale in some cases have been booked provisionally pending issue of final invoices since final quality analysis at destination is yet to be received. This has no impact on the profitability since the difference, if any, on issuance of final invoice shall be to the account of the supplier. The stock has been taken on the basis of certificates from S&H Agencies as they are responsible for delivering full quantity.

14. Sale of canalized urea to Deptt. of Fertilisers(DOF), Government of India is made based on allocation letters issued by DOF and by transferring shipping documents. However, no separate agreement is signed with DOF.

15. The proportionate forward premium of Rs. 226.26 million (LYRs. 182.46 million) for imports and Rs. Nil million (L.Y. Rs.Nil million ) for exports to be recognized in the Profit & Loss Account of the subsequent accounting year in terms of the provisions of Accounting Standard 11 issued by the Institute of Chartered Accountant of India.

16. In respect of forward exchange contracts outstanding as on 31.3.10 relating to firm commitments and highly probable forecast transactions, the loss of Rs. 0.75 million (P.Y loss of Rs. Nil million) has been recognized in the Profit & Loss Account on the basis of changes in exchange rate as at the close of the year.

17. Liability of Rs 160.00 million (P.Y. Rs 59.81 million) towards perquisite & allowances and Rs 110.00 million (P.Y. Rs 50.00 million) towards superannuation benefit has been made during the year as per DPE guidelines for wage revision.

18. Against the disputed demand of custom duty, penalty etc amounting to Rs 247.43 million (P.Y. Rs 112.97 million) in respect of utilization of Target Plus License for import of RBD palmolien oil, an amount of Rs 247.43 million (P.Y. Rs 112.97 million) has been provided in the accounts. Liability on account of interest, if any, will be provided on final decision of the case.

19. Based on interim orders of Honble Court of Small Causes in the matter of mesne profit for the period from 1.7.2000 to 31.3.2002 relating to office premises at Mumbai, an amount of Rs 32.32 million has been deposited with the Court and a bank guarantee of Rs 33.93 million is also submitted pending decision on the appeal. Liability provision has been made in the accounts for the full amount. Interest, if any, on the above will be provided on final outcome of the case.

20. A claim for Rs 20.62 million (LY Rs 20.62 million) against an associate on account of damaged imported Polyester is pending forwhich a provision of Rs 15.54 million (LYRs 15.54 million) has been made after taking into account the EMD and other payables amounting to Rs 5.08 million (LY Rs 5.08 million). The company has requested customs for abandonment which is pending for adjudication.

21. The employees benefits provided by the Company as required under Accounting Standard 15 (Revised) areasunder:-

(i) Leave Encashment-Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed leaving a minimum balance of 15 days twice in a year.

(ii) Post Retirement Medical Benefit(PRMB)-Available to retired employees at empanelled hospitals for inpatient treatment and also for OPD treatment.

(iii) LTC/ALTC-Leave Travel Concession and ALTC is given to all serving employees once in a block of two years by their entitled class of travel.

Liability in respect of benefits in respect of Leave Encashment, PRMB and LTC/ALTC are recognized on the basis of actuarial valuation.

(iv) Gratuity - Gratuity is paid to all the employees on retirement/separation based on the number of years of service. The scheme is funded by the Company and is managed by a separate Trust through LIC. In case of MICAdivision employees the scheme is managed directly by the company through LIC.

22. The Company has made certain changes in the Accounting Policies during the year. The financial impact, if any, of the same is as under :-

(a) Accounting Policy No. 4 relating to Prepaid Expenses has been modified to charge prepaid expenses up to Rs 10000 and deposits up to Rs 5000 in each case due to which the profit for the year has decreased by Rs 0.56 million.

(b) Accounting Policy No.6 has been modified in respect of Depreciation of moveable assets whose written down value at the beginning of the year and / or value in respect of purchases made during the year are Rs 20000 or less. Further, a policy 6(d) has been incorporated for accounting of mobile handsets. Due to above changes in accounting policy, the profit for the year has decreased by Rs 2.52 million

(c) Accounting Policy No. 9 relating to Segment Reporting has been incorporated in line with AS-17 " Segment Reporting" keeping in view the companys organizational structure and the risks and returns of the company. Accordingly, the primary format for reporting segment information has been changed to business segments from geographical segments and secondary format has been changed from business segments to geographical segments. The change has no financial impact on the accounts of the company.

(d) Accounting Policy 10(iii) relating to benefits payable under Voluntary Retirement Scheme has been incorporated to comply with the provisions of AS-15(revised) "Employee Benefits" issued by The Institute of Chartered Accountants of India. The earlier Accounting Policy No.9 relating to Deferred revenue Expenditure has been deleted. Due to the above changes the profit for the year has decreased by Rs 74.97 million.

23. Related Party Disclosures Under AS-18 (As identified & certified by the Management) Name of the related parties and description of relationship:

a) Key Management Personnel

i. ShriSanjivBatra Chairman and Managing Director

ii. ShriS.K. Kar Director

iii. ShriAdarshGoyal Director(upto31.12.2009)

iv. ShriA. Mahapatra Director

v. Shri H.S.Mann Director

vi. ShriSunirKhurana Director

vii. ShriVedPrakash Director (w.e.f. 19.02.2010)

b) Subsidiary

MMTC Transnational Pte. Ltd., Singapore

c) Associate

Neelachal Ispat Nigam Ltd.

Devona Thermal Power & Infrastructure Ltd.

d) Joint Ventures:-

Free Trade Warehousing Pvt. Ltd

Haldia Free Trade Warehousing Pvt. Ltd.

Greater Noida Integrated Warehousing Pvt. Ltd.

Integrated Warehousing Kandla Project Development Pvt. Ltd.

MMTC Pamp India Pvt. Ltd.

MMTC Gitanjali Private Ltd.

Indian Commodity Exchange Ltd.

Sical Iron Ore Terminal Ltd.

24. In terms of AS-17 the Company has identified its Primary Reportable Business Segments as Minerals, Precious Metals, Metals, Agro Products, Coal & Hydrocarbon, Fertilizer and General Trade/others. The Secondary Segments are identified based on the geographical location as Outside India and Within India. Details are placed at Annexure A.

25. As required by Accounting Standard (AS) 28" Impairment of Assets" notified by the Institute of Chartered Accountants of India, the company has carried out the assessment of impairment of assets. There has been no impairment lossduring the year.

26. Letters have been issued to parties for confirmation of balances with the request to confirm or send comment by the stipulated date failing which balance as indicated in the letter would be taken as confirmed. Confirmation letters have been received in a few cases. However, no adverse communication received from any party.

27. There are no micro, small or medium enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31 st March, 2010.

28. Compliance of the Companies (Accounting Standard) Rules 2006 has been made. The Company has large number of transactions and diversified activities, which may have put operational constraints in strictly following the said rules. The deviation if any, have been stated in the accounting policies of the Company.

29. Whole time Directors are allowed usage of staff cars for private purposes up to 12,000 km per annum as specified in the contractual terms of appointment on payment of Rs. 400 per month.

30. Figures for the previous year have been regrouped / recasted wherever considered necessary.

31. Accounting Policies, Schedules & Notes attached form an integral part of the Accounts.

 
Subscribe now to get personal finance updates in your inbox!