The Members MMTC Limited
Ladies & Gentlemen
On behalf of Board of Directors I have the pleasure of presenting the 53rd AnnualReport on your company's performance for the financial year ended 31st March 2016 alongwith audited statements of accounts and Statutory Auditor's Report.
Your company one of the leading trading companies in India recorded a businessturnover of Rs 125034.27 million (including other trade earnings of Rs 429.57 million)during 2015-16 as against the business turnover of Rs 182415.04 million registered duringlast fiscal. This business turnover includes Exports of Rs 6725.70 million Imports of Rs102958.5 million and domestic trade of Rs 14920.50 million. The other trade relatedearnings contributed Rs 429.57 million. The trading profit earned by your Company stood atRs 1296.81 million as against Rs 2079.12 million during last fiscal. The Company hasreported Profit After Tax of Rs 548.58 million in the current fiscal compared to Rs 479.10million earned last year.
The highlights of the Company's performance during 2015-16 are as below:-
| ||2015-16 ||2014-15 |
|Sale of products ||124344.04 ||182374.40 |
|Sale of service ||262.41 ||46.20 |
|Other Trade Earning ||429.57 ||427.78 |
|Less : Excise Duty ||1.75 ||5.56 |
|Total Revenue from Operations ||125034.27 ||182842.82 |
|Cost of Sales ||123737.46 ||180763.70 |
|Trading Profit ||1296.81 ||2079.12 |
|Add: Dividend and other Income ||278.36 ||252.05 |
|Less: Establishment & Administrative Overheads etc. ||1886.85 ||2053.66 |
|Less: Debts/Claims Written off ||0.97 ||299.96 |
|Less: Provisions for Doubtful Debts/Claims/Advances/Investments ||2.80 ||12.36 |
|Profit Before Interest Depreciation and Amortization Expenses Prior Period Expenses and Taxes ||(315.45) ||(34.81) |
|Add: Interest Earned (Net) (Interest earned minus Finance Cost) ||946.91 ||827.65 |
|Profit Before Depreciation and Amortization Expenses Prior Period Expenses and Taxes ||631.46 ||792.84 |
|Less: Depreciation and Amortization Expenses ||46.29 ||178.17 |
|Less: Prior Period Expenses ||6.39 ||15.99 |
|Profit Before Extra-ordinary items and Taxes ||578.78 ||598.68 |
|Less: Extra-ordinary item ||- ||- |
|Less: Provision for Current Taxes ||44.20 ||136.99 |
|Less: Provision for Deferred Taxes ||(14.00) ||(17.41) |
|Profit After Taxes ||548.58 ||479.10 |
|Add: Balance brought forward from the previous year ||6522.06 ||6448.82 |
Which the Board has appropriated as under to:
| || |
|(I) Proposed Dividend ||300.00 ||250.00 |
|(II) Dividend Tax ||61.07 ||50.89 |
|(III) General reserve ||100.00 ||100.00 |
|(IV) Opening Adjustment of Depreciation ||- ||4.97 |
|(V) Corporate Social Responsibility Reserve ||(0.07) ||- |
|Leaving a Balance to be carried forward ||6609.64 ||6522.06 |
The performance of different business groups of your Company is highlighted in theManagement Discussion and Analysis Report which is annexed and forms part of this Report.
Awards and rankings
CAPEXIL Award-Top Exporter for 2012-13
*1* EEPC Award-Top Exporter Gold Trophy in the Merchant Enterprise category for 2013-14
*1* Amity University - Export Excellence Award for Revolutionizing Export of Minerals& Metals from India
*> Sharda-Top Rankers Excellence Award Leadership Excellence to ShriVed PrakashCMD.
Asia Pacific HRM Congress Award 2015-CEO with HR Orientation to ShriVed Prakash CMD
*1* Ministry of Commerce awarded Rajbhasha Trophy (third prize) for the excellence inimplementation of Official Language Policy.
*> Economic Times - 56th rank by ET500 in 2015.
EQUITY SHARE CAPITAL & DIVIDEND
The Board of Directors recommends declaration of dividend @ 30% on the equity capitalof Rs 1000 million of the Company for the year 2015-16 out of profits of the Company.
A sum of Rs 12591.95 million was available in the reserves and surplus of your Companyas on 1st April 2015. Your Directors have proposed that Dividend at the rate of 30% bepaid out of profits of the Company. Accordingly an amount of Rs 12779.46 million wasavailable in "Reserves and Surplus" of your Company as on 31st March 2016.
FOREIGN EXCHANGE EARNINGSAND OUTGO
The Foreign Exchange earnings and outgo of your Company during 2015-16 has been asunder:-
| ||EARNINGS || ||OUTGO |
| ||Rs in Million || ||Rs in Million |
|Exports ||6761.88 ||Imports ||91415.38 |
|Others ||63.04 ||Interest ||0.54 |
| || ||Others ||420.58 |
|Total ||6824.92 ||Total ||91836.50 |
The wholly owned subsidiary of your Company - MMTC Transnational Pte. Ltd. Singapore(MTPL) incorporated in October 1994 has been engaged in commodity trading and hasestablished itself as a credible and reputable trading outfit in Singapore. During thefinancial year 2015 -16 MTPL achieved business turnover of USD 108.28 million as againstUS$ 248.02 million during last fiscal. The Net Loss aftertax incurred by MTPL during thefinancial year 201516 amounted to US$ 0.28 million. The net worth of MTPL stood at US$15.36 million as on 31st March 2016 as against the net worth of US$ 15.64 million as on31.3.2015.
Pursuant to the provisions of Section 129 of the Companies Act 2013 the auditedfinancial statements of MTPL together with Director's Report & Auditor's Report areattached herewith.
MMTCS PROMOTED PROJECT- Neelachal Ispat Nigam Ltd. (NINL)
Your company has set up Neelachal Ispat Nigam Limited (NINL) - an iron & steelplant of 1.1 million tonnes capacity 0.8 million tonne coke oven and by product unit withcaptive power plant jointly with Govt. of Odisha and others. The project has been grantedIron ore mining lease with an estimated reserves of 110 million tonnes. The phase-II ofthe Project for production of steel with Basic Oxygen Furnace Oxygen Plant and SMS gotcommissioned in March 2013 and Steel Billets Production commenced. During the year2015-16 NINL achieved a sales turnover of Rs 10856 million and incurred net loss of Rs3345 million. This was primarily due to recession in the economy and steel sector inparticular. With the stabilization of steel making facility and starting of iron oremining by end of current financial year NINL's performance is expected to improve.
To take advantage of new opportunities emerging in the free market environment yourcompany has promoted a
number of joint ventures following the public-private partnership model in earlieryears. Abrief on the current status of such JVs is given hereunder:
(i) Your Company has divested 10% stake in M/s Indian Commodity Exchange Limited (ICEX)out of 26% held by your Company out of the total paid up capital of Rs 100 crores for Rs200 Million thereby reducing the equity holding to 16% as on 31.3.2016. During the yearICEX has reported a net loss of Rs 74.56 million for the year 2015-16 as against a netloss of Rs 81.56 million during 2014-15.
(ii) Your company had participated in the equity of Currency Futures Exchange under thename and style of "United Stock Exchange of India Ltd which has been merged with"BSE Limited" (BSE) during the year and as a result your Company holds 77922equity shares of Rs 1 each in BSE. During the year BSE earned a net profit of Rs 1061.2millions against 1014.4 millions in 2014-15 and declared an interim dividend of Rs 3.50and final dividend of Rs 4.00 on equity share of Rs 1/- each.
(iii) The joint venture for medallion manufacturing unit in collaboration with PAMPSwitzerland in the name of MMTC-PAMP India Pvt. Ltd. achieved a turnover of Rs 245607millions and profit aftertax of Rs 590.2 million during 2015-16. MMTC-PAMP became India'sfirst LBMAaccredited refiner for Gold and silver. During 2015-16 MMTC has sold Gold Barsproduced by MPIPLin the domestic market achieving a turnover of Rs 5301.0 million.
(iv) For effective marketing of the finished products of both medallions and jewelleryyour company has set up a JV Company in partnership with a leading Indian company underthe name and style of MMTCGitanjali Limited for setting up retail stores at various citiesin India. MMTC Gitanjali Limited has reported a turnover of Rs 283.24 million and net lossof Rs 21.8 million for the year 2015-16 as against net loss of Rs 9.7 million during2014-15.
(v) The JV Company-M/s. SICALIron Ore Terminals Limited (SIOTL) allocated primarily forexport of Iron ore could not make any progress during 2015-16 due to continuing ban oniron ore exports from Bellary-Hospet Sector in Karnataka State. In view of uncertainfuture of iron ore exports at the instance of SIOTL Kamarajar Port Ltd. (erstwhileEnnore Port Ltd.) is in the process of converting the facility into coal handling also.
(vi) TM Mining Company Ltd.-your company's JV with M/s TATA Steel Ltd. for miningexploration and allied activities has obtained certificate for commencement of operations.
(vii) To facilitate promotion of two-way trade the SPV promoted by your Company inassociation with IL&FS IIDC has been allotted land to set up International Cargo hubat Haldia and Free Trade and Warehousing Zone at Kandla on lines similar to SpecialEconomic Zone. Work Orders for preparation of Business Plan and architectural Master Planfor the Haldia Project have been issued to the selected bidders.
(viii) MMTC commissioned a 15 MW capacity Wind Mill project with 25 Wind EnergyGenerators in March 2007 at Gajendragad in Karnataka. The cost of the project was Rs68.75 crores and its life expectancy is 30 years. Full return of capital on "realcash receipt basis" was achieved in Feb 2015 itself. The total sale value of powerfrom the project till 31.03.2016 is about Rs 77 crores which qualifies for full taxholiday benefit. The power generated from the project is sold to HESCOM. The project isrunning successfully and has contributed to the development of the area by meeting someportion of energy needs of Karnataka state. The turnover of the project during 2015-16 wasRs 73.9 million with a profit of Rs 56.8 million.
INDUSTRIAL RELATIONS & HUMAN RESOURCE MANAGEMENT
Cordial and harmonious industrial relations were maintained in the Company during theyear. No man days were lost due to any industrial unrest during the year. Regular meetingswere held with the Federation/Unions/Associations of Officers Staff and SC/ST Employeesunder Joint Consultative Machinery Forum. The aim of these meetings is to promote exchangeof information/ideas with a view to achieve Company's goals and objectives and also tomitigate employees' grievances.
The aggregate manpower of the company as on 31st March 2016 stood at 1340 including 6Board level executives comprising of 513 Officers and 827 staff. This manpower includes 7officers 106 staff-workers of erstwhile Mica Trading Company Ltd. which had been mergedwith your company pursuant to the orders of BIFR. The composite representation of thetotal manpower is - women employees representing 21.12% (283 employees) of the totalmanpower; SC ST OBC & persons with disabilities (PWD) to the extent of 21.19% (284employees) 9.18% (123 employees) 9.10% (122 employees) and 2.01% (27 employees)respectively. During the year 8 officers were inducted through campus recruitment and openadvertisement.
Policy for reservations for SCs STs OBCs and PWD in services was followed fully asper the government guidelines in recruitment and promotion.
For further enhancing / upgrading the skills of employees in the constantly changingbusiness scenario 1243 employees were imparted training during the year in differentspheres of company's activities. This was done throug h programmes organized inassociation with in-house faculty as well as external resource persons from renownedinstitutions/organizations. The employees deputed for training had adequate representationof SC ST and women employees ( SC- 221 ST- 99 and women -240). In terms of man dayssuch training works out to 1776 training man days during the year2015-16.
IMPLEMENTATION OF OFFICIAL LANGUAGE
The Company is committed to implement Official Language Policy of the Government ofIndia. Best efforts were made to achieve the targets prescribed in the Annual Programmefor the year 2015 -16 issued by the Department of Official Language Ministry of HomeAffairs Govt. of India. To promote the usage of Hindi in Company's day to day workseveral programme viz. Hindi Workshops/Hindi Typing training on Computers/HindiDay/Week/Fortnight were organized at Corporate Office and Regional Offices during theyear. Apart from this Special Hindi Classes were also arranged for staff in CorporateOffice to train them in Hindi Notings and Drafting. This has brought positive results anda considerable increase of use of Hindi was observed in day to day official work.
During the year the Hon'ble Committee of Parliament on Official Language inspected ourCorporate Office and Ahmedabad Regional Office. The Company was awarded Third Prize viz.Rajbhasha Trophy for the excellence in implementation of Official Language Policy byMinistry of Commerce during this period. For the very same year the Company was alsoawarded with Vishesh Prashansa Puraskar by Town Official Language Implementation Committeefor outstanding work done in the area of Official Language implementation.
The Vigilance Wing of your Company continued its focus on preventive vigilance tofosterthe goodwill & confidence stemming from value based business practices and forstrengthening the Company as a professionally managed globally competitive &internationally reputed organization. With the initiatives of Vigilance Division of yourCompany various drills/manuals have been prepared and implemented. During the year underreview the vigilance division processed fourteen complaints (eleven were carried overfrom last year and there were three new complaints) out of these 10 complaints have beendisposed off and action on remaining 4 complaints is in progress. Scrutiny ofAnnualProperty Return for the calendaryear 2015 from MMTC employees has been done. Division wasalso instrumental in organizing "VigilanceAwareness Week" in various offices ofMMTC from 27.10.2015 to 31.10.2015 with the theme of "Preventive Vigilance as a Toolof Good Governance".
Training to Vigilance and Non-Vigilance Officers has been imparted on zonal basis forsensitizing the employees about the preventive vigilance aspect. During the period underreview no new vigilance case has been registered.
In accordance with the provisions of Section 177 of Companies Act 2013 the Board ofyour company introduced a Scheme on 'Vigil MechanismRs in compliance with the directionsof Audit Committee of Directors. This Audit Committee Vigil Mechanism is established forDirectors and employees to report their genuine concerns. The scheme has been notifiedvide Circular dated 14th August 2014. The concerns if any from any employee/Director shallbe addressed to the Chairman of the Audit Committee. During the year under review no suchcomplaint has been received. This mechanism is apart from the Whistle Blower Policyalready in force.
Integrity Pact is promoted as part of series of steps taken by Central VigilanceCommission for ensuring transparency equity and competitiveness in public procurement. Inyour Company too it has been implemented to promote transparency/equity amongst thebidders and to plug any possibility of corrupt practices in trade conducted by theCompany. Shri DRS Chaudhary IAS (Retd.) has been appointed to function as IndependentExternal Monitors (IEM).
CORPORATE SOCIAL RESPONSIBILITYAND SUSTAINABLE DEVELOPMENT
In compliance to CSR Rules your Company in its endeavor to continue it commitmenttowards CSR & Sustainability initiatives a fund of Rs.45 lakhs was agreed in theannual MOU with Ministry of Commerce. This will be utilized for undertaking CSR activitiesunder Swachh Bharat Abhiyan during 2015-16. The annual report on CSR activity undertakenby your Company during 2015-16 is annexed to this report.
Your Company reposes its firm faith in continuous development adoption and dedicationtowards the best corporate governance practices. Towards this end the norms prescribedunder the Companies Act 2013 SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015(Listing Regulations) and Guidelines applicable for CPSEs issued by theDepartment of Public Enterprises in this regard are being implemented in letter andspirit. However appointment of woman director on the Board of the company is yet to bemade by the Government. Two Independent Directors have since joined the Board of yourCompany as on date.
A separate report on corporate governance along with certificate from M/s Blak &Co.(CP No.11714) regarding compliance of the stipulations relating to corporate governancespecified in Listing Regulations is annexed hereto and forms part of this report.
CODE OF CONDUCT
Pursuant to Regulation 15(5) of Listing Regulations the Code of Conduct applicable tothe Board members & senior management personnel has been posted on the website of yourcompany. All Board Members and Senior Management Personnel as on 31st March 2016 to whomthe said Code is applicable have affirmed compliance of the same for the period ended31st March 2016.Based on the affirmation received from Board Members and SeniorManagement Personnel declaration regarding compliance of Code of Conduct made by theChairman & Managing Director is given below:
Declaration as required under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and DPEs Guidelines on Corporate Governance
"All the members of the Board and Senior Management Personnel have affirmedcompliance of the 'Code of Business Conduct & Ethics for Board Members and SeniorManagement Personnel' of the company for the financial yearended on March 312016."
| ||Sd/- |
| ||VED PRAKASH |
| ||Chairman & Managing Director |
|BUSINESS RESPONSIBILITY REPORT ||DIN.: 02988628 |
In accordance with the provisions of regulation 34(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 your Company has prepared the BusinessResponsibility Report for inclusion in the Annual Report for the year 2015-16. Theframework and principles suggested by SEBI to assess compliance with environment socialand governance norms pertain to Corporate Social Responsibility and SustainableDevelopment activities of the Company. The Business Responsibility Report of your Companyis annexed herewith and forms part of the Annual Report.
PUBLIC DEPOSIT SCHEME
As on 1st April 2016 there were no outstanding public deposits and the company did notinvite/ accept any public deposit during the year ended 31st March 2016.
The extracts of Annual Return pursuant to provisions of Section 92 read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 is furnished in prescribedform-MGT-9 and the same is annexed herewith.
STATUTORY AUDITORS REPORT
The report of Statutory Auditors for the year 2015-16 along with Management's reply tothe observations of the Statutory Auditors is annexed herewith.
COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA
The Comptroller & Auditor General of India (C&AG) has given 'NIL' commentsunder section 143 (6) (b) of the Companies Act 2013 on the accounts of the Company forthe year ended 31.03.2016.The communication dated 28.7.2016 of C&AG of India in thisregard is annexed herewith.
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s. Blak & Co.
Practicing Company Secretaries New Delhi to conduct the Secretarial Audit of theCompany for the financial year ended March 31 2016. The Secretarial Audit Report (in FormMR -3) alongwith Management's Reply on the observations of the Secretarial Auditor isannexed herewith.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Details of investments loans and guarantees covered under the provisions of Section186 of the Companies Act 2013 are given in Note 6.27.5 and 19 respectively of the Notesforming part of the financial statements.
RELATED PARTY TRANSACTIONS
All transactions entered by the Company with Related Parties were in the OrdinaryCourse of Business and not at Arm's Length basis. The Audit Committee granted omnibusapproval for the transactions undertaken during 2015-16. The approval of the Board andShareholders through postal ballot for such Related Party Transactions were taken.Suitable disclosures as required under AS-18 have been made in Note 25 of Notes to thefinancial statements. Details of the transaction are provided in FormAOC-2 which isannexed herewith.
The Policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the Company's website at the following link: http://mmtclimited.com/files/.pdf/95_party_policy.pdf
RISK MANAGEMENT POLICY
The Board of Directors approved the Risk Management Policy after the same has been dulyrecommended by the Audit Committee of Directors to take care of various risks associatedwith the business undertaken by your company. The details of Risk Management as practicedby the Company is provided as part of Management Discussion and Analysis Report which isannexed herewith.
CONSERVATION OF ENERGY
During the year 2015-16 there was no activity in Mica group of your company. Pursuantto rule 8(3) of Companies (Accounts) Rules 2014 a statement on conservation of energy isannexed to this report.
PARTICULARS OF EMPLOYEES
Pursuant to provisions of Rule 5(2) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules as amended from time to time it is stated that there were noemployees who were in receipt of remuneration exceeding Rs 60 lakhs per annum or Rs 5.00lakhs per month during the year 2015-16.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 your Directorsstate that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for the year ended 31.3.2016;
c) the Directors have taken a proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis.
e) the directors of your company had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
DISCLOSUREUNDERTHESEXUALHARASSMENTOF WOMENATTHE WORK PLACE (PREVENTION PROHIBITION& REDRESSAL)ACT 2013
The Company has in place a Policy in line with the requirements of The SexualHarassment of Women at the Workplace (Prevention Prohibition & Redressal) Act 2013.An Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment at work place. All employees (permanent contractualtemporary trainees) are covered under this policy.
No complaints were received by the Company under the above Act during the year underreview. BOARD OF DIRECTORS
Following are the changes in the Board of Directors of your company since 1st April2015: -
|Name of the Director ||Category ||Date of Appointment/ Cessation ||Appointment/ Cessation |
|Mr. Rajni Ranjan Rashmi ||Govt. Nominee Director ||29.04.2015 ||Cessation |
|Mr. Ajay Kumar Bhalla ||Govt. Nominee Director ||29.04.2015 ||Appointment |
|Mr. Bhagwati Prasad Pandey ||Govt. Nominee Director ||06.08.2015 ||Cessation |
|Mr. J. K. Dadoo ||Govt. Nominee Director ||06.08.2015 ||Appointment |
|Mr. Ashwani Sondhi ||Director (Marketing) ||06.01.2016 ||Appointment |
|Mr. Arvind Kalra ||Independent Director ||14.02.2016 ||Cessation |
|Mr. Rana Som ||Independent Director ||10.04.2016 ||Cessation |
|Mr. N Bala Baskar ||Independent Director ||10.04.2016 ||Cessation |
|Dr. Subas Pani ||Independent Director ||10.04.2016 ||Cessation |
|Mr. S R Tayal ||Independent Director ||10.04.2016 ||Cessation |
|Mr. R. Anand ||Independent Director ||15.06.2016 ||Appointment |
|Mr. Balkrishna K. Shukla ||Independent Director ||04.07.2016 ||Appointment |
The Board places on record its deep appreciation for the commendable services and thecontributions made by Mr. Rajni Ranjan Rashmi Mr B P Pandey Mr. Arvind Kalra Dr SubasPani Mr S R Tayal Mr. Rana Som and Mr.N Bala Baskar. The Board alsowelcomesShriAKBhallaShri J KDadoo ShriAshwani Sondhi Shri RAnand and Shri Balkrishna Khanderao Shukla andexpresses its confidence that the Company shall immensely benefit from their rich andvaried experience.
In terms of provisions of Article 87(4)(A) of Articles of Association of the Companyregarding rotational retirement of Directors Shri An and Trivedi Director(Marketing) andShriAKBhalla Govt Nominee Directorshall retire at the AGM and being eligible haveoffered themselves for reappointment.
Your Directors would like to acknowledge and place on record their sincere appreciationof all stakeholders- Shareholders Department of Commerce all Govt. Agencies RBI andother Banks Railways Customs Ports Customers Suppliers and other business partnersfor the excellent support and cooperation received from them during the year. YourDirectors also recognize and appreciate the efforts and hard work of all the employees ofthe Company and their continued contribution towards its progress.
| ||By the Order of the Board |
| ||sd/- |
| ||(Ved Prakash) |
| ||Chairman & Managing Director |
|Dated: 19.08.2016 ||DIN No: 02988628 |