DIRECTORS' REPORT 

The Members MMTC Limited, New Delhi.

Ladies & Gentlemen,

On behalf of Board of Directors, I have pleasure in presenting 52nd Annual Report on the performance of your company for the financial year ended 31st March 2015 along with audited statements of accounts and Statutory Auditor's Report.

RESULTS OF OPERATIONS

Your company, one of the leading trading companies in India, recorded a business turnover of Rs.182,415.04 million (including sale of services Rs.46.20 million) during 2014-15 as against the business turnover of Rs.250,744.94 million registered during last fiscal. This business turnover includes Exports of Rs.23007.00 million, Imports of Rs.145301.50 million and domestic trade of Rs.14065.90 million. The other trade related earnings contributed Rs.427.78 million. The trading profit earned by your Company stood at Rs.2079.12 million as against Rs.3455.79 million during last fiscal. The Company has reported Profit After Tax of Rs.479.10 million in the current fiscal compared to Rs.186.42 million earned last year.

The performance of different business groups of your Company is highlighted in the Management Discussion and Analysis Report, which is annexed and forms part of this Report.

EQUITYSHARE CAPITAL & DIVIDEND

The Board of Directors recommends declaration of dividend @25% on the equity capital of Rs 1,000 million of the Companyforthe year 2014-15 out of profits of the Company.

RESERVES

Asum of Rs.12418.70 million was available in the reserves and surplus of your Company as on 1st April, 2014. Your Directors have proposed that Dividend at the rate of 25% be paid out of profits of the Company. Accordingly, an amount of Rs.12591.95 million was available in "Reserves and Surplus" of your Company as on 31st March, 2015.

SUBSIDIARY COMPANY

The wholly owned subsidiary of your Company - MMTC Transnational Pte. Ltd., Singapore (MTPL) was incorporated in October 1994 under the laws of Singapore with a share capital of US$ 1 million. During the year 2014-15, MTPL achieved business turnover of US$ 248.02 million as against US$ 369.46 million during last fiscal. The Profit After Tax earned by MTPL during 2014-15 amounted to US$ 0.13 million. The net worth of MTPL stood at US$ 15.64 million as on 31st March 2015 as against net worth of US$ 15.51 million as on 31.03.2014.

MTPL enjoyed prestigious "Global Trader Programme" (GTP) status awarded to it by International Enterprise, Singapore, an arm of the Govt, of Singapore from the year2000 to 2013.

Pursuant to the provisions of Section 129 of the Companies Act, 2013, the audited financial statements of MTPL together with Director's Reports Auditor's Report are attached herewith.

MMTC'S PROMOTED PROJECT-Neelachal Ispat Nigam Ltd. (NINL)

Your company has set up Neelachal Ispat Nigam Limited (NINL) - an iron & steel plant of 1.1 million tonnes capacity, 0.8 million tonne coke oven and by product unit with captive power plant, jointly with Govt, of Odisha and others. The project has been granted Iron ore mining lease with an estimated reserves of 110 million tonnes. The phase-ll of the Project for production of steel, with Basic Oxygen Furnace, Oxygen Plant and SMS got commissioned in March 2013 and Steel Billets Production also started. During the year 2014-15, NINL achieved a sales turnover of Rs.13156 million and loss of Rs.2327 million due to recession in the economy and steel sector in particular. With the stabilization of steel making facility and starting of iron ore mining by end of this financial year, NINL's performance is expected to improve substantially.

PROJECTS/JOINTVENTURES

To evolve a new business model for taking advantage of new opportunities emerging in the free market environment, your company has promoted a number of joint ventures following the public- private partnership route in earlier years. A brief on the current status of such JVs is given hereunder:

(i) M/s Indian Commodity Exchange Limited in which MMTC has a stake of 26% of the total paid up capital of Rs.100 crores has reported a net loss of Rs.81.56 million for the year 2014-15 as against a net loss of Rs.89.84 million during 2013-14.

(ii) The JV Company - Currency Futures Exchange under the name and style of "United Stock Exchange of India Ltd in which MMTC has invested an amount of Rs.30 million. The said JV Company is in the process of merger with BSE Ltd as per the approval of SEBI, CCI and shareholders of the exchange. The merger of United Stock Exchange with BSE was approved by the Hon'ble High Court of Bombay which will be effective from the date the order is filed with ROC.

(iii) The joint venture for medallion manufacturing unit in collaboration with PAMP Switzerland in the name of MMTC-PAMP India Pvt. Ltd. achieved a turnover of Rs.220639.73 million and reported a net profit of Rs.1124.72 million for the year 2014-15 and has declared 70% dividend on the paid up capital. During the year, MMTC-PAMP became India's first LBMAaccredited refinerfor Gold and Silver. 

(iv) For effective marketing of the finished products of both medallions and jewellery, your company has set up a JV Company, in partnership with a leading Indian company under the name and style of MMTC Gitanjali Limited for setting up retail stores at various cities in India. MMTC Gitanjali Limited has reported a turnover of Rs.111.96 million and net loss of Rs.9.70 million for the year 2014-15 as against net loss of Rs.7.86 million during 2013-14.

(v) The JV Company - M/s. SICAL Iron Ore Terminals Limited (SIOTL) could not make any progress during 2014-15 due to non-availability of iron ore for exports from Bellary-Hospet Sector in Karnataka State. The JV company has been pursuing with Kamarajar Port Limited(KPL) for permission to convert this facility for handling discharge of coal imports instead of iron ore exports, so as to meet growing demand of thermal power plants in Tamil Nadu. Ministry of Surface Transport, Govt, of India have agreed to the proposal of KPL and KPL has already issued tender for selection of operator with first right of refusal to SICAL.

(vi) M/s Blue Water Iron Ore Terminal Private Ltd, one of the other joint ventures of your Company could not commence operation. The JV Company is being wound up.

(vii) TM Mining Company Ltd.-your company's JV with M/s TATA Steel Ltd. for mining, exploration and allied activities has obtained certificate for commencement of operations. Efforts are on to identify suitable projects to operationalise.

(viii) To facilitate promotion of two-way trade, the SPV promoted by your Company in association with IL&FS has been allotted land to setup International Cargo hub at Haldia and Free Trade and Warehousing Zone at Kandla on lines similar to Special Economic Zone. The SPV promoted by MMTC jointly with ILFC IDC Fund has been allotted 75 acres of land at Kandla for development of Phase-1 of Kandla FTWZ Project which is currently in progress. 200 acres of land have also been allotted to the SPV at Haldia to set up an International Cargo Hub outside the purview of SEZAct, as per State Government policy. Part construction of Compound Wall to secure physical possession of the land for the Haldia project has been started. Work Orders for preparation of Business Plan and architectural Master Plan for the Haldia Project have been issued to the selected bidders. Development work at Kandla has also been started.

(ix) Your Company has set up a 15 MWWind Mill Project with 25 Wind Energy Generators(WEGs) of 600 KVAeach which was commissioned in March, 2007 by MMTC through M/s.RRB Energy Ltd. Sale of power from the project till 31.3.2015 amount to Rs.70 crores. Full return of capital on 'real cash receipt basis' has been achieved in February, 2015.The project is connected to 110/33 KV Grid at Gajendragad Sub-station controlled by Karnataka State owned Enterprise i.e. M/s. Hubli Electricity Supply Company Ltd. (HESCOM).The project is running successfully for the last 8 years and has contributed to the development of the area by meeting some portion of the energy needs of Karnataka State.

INDUSTRIAL RELATIONS & HUMAN RESOURCE MANAGEMENT

Cordial and harmonious industrial relations continued to prevail in your company with no man-days lost during the year. Regular meetings were held with the Unions /Associations/ Federation for attaining an amicable resolution of HR related issues to achieve Company's goals and objectives.

The aggregate manpower of the company as on 31st March, 2015 stood at 1439, excluding Board level executives, comprising of 542 Officers and 897 staff. This includes 8 officers, 112 staff / workers of erstwhile Mica Trading Company Ltd., which had been merged with your company pursuant to the orders of BIFR. While the composite representation of the total manpower consisted of women employees representing 20.92% (301 employees) of the total manpower, the representation of SC, ST, OBC & persons with disabilities (PWD) was to the extent of 21.26% (306 employees), 8.89% (128 employees), 8.61% (124 employees) and 2.29% (33 employees) respectively. During the year 16 officers were inducted through campus recruitment and open advertisement. Policy for reservations for SCs, STs, OBCs and PWD in services was followed fully in recruitment and promotion.

With the objective of further enhancing / upgrading the skills of employees in the constantly changing business scenario, 1057 employees were imparted training during the year in different spheres of company's activities. This was done through programmes organized both with in-house expertise as well as external resources from renowned institutions / organizations. The employees deputed for training included 166 employees belonging to SC, 79 to ST and 302 women employees. In terms of man-days such training works out to 2070 training man-days during the year 2014-15.

During the year an understanding was reached between MMTC and IIM-Ahmedabad that MMTC would depute senior officers for "Advanced Leadership" program once a year. In December 2014, 35 senior officers of MMTC underwent Advanced Leadership Training at the IIM-Ahmedabad. Out of 35 officers, 7 belonged to SC and 3 belonged to ST, which amounts to 28.57%.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company is committed to implement Official Language Policy of the Government. During the year 2014-15 your company consistently strived to adhere and implement the Official Language Policy to meet the targets given in the annual programme issued by the Department of Official Language, Ministry of Home Affairs, Govt, of India. To promote usage of the Official Language by employees of the company, several programs in the form of Hindi Workshops, Hindi Seminars, Hindi Day/Week/Fortnight were organized at the Corporate Office and Regional Offices during the year under review.

Hon'ble Parliamentary Committee on Official Languages inspected your company's Mumbai Regional Office and Bengaluru Regional Offices. During the year, the Company was awarded Rajbhasha Trophy for excellence in implementation of Official Language Policy in the Company by Ministry of Commerce. 

VIGILANCE

Continuing to foster the goodwill & confidence stemming from value based business practices and strengthening the Company as a professionally managed, globally competitive & internationally reputed organization, the vigilance group of your company carried further its focus on preventive vigilance. With the efforts of Vigilance Division of your Company, a comprehensive Finance and Accounts Manual as well as a standardized Business Manual, Corporate Risk Management Policy have been prepared and circulated for implementation. During the period under review, Vigilance Division processed 38 complaints (18 were carried forward from last year and 20 new complaints have been added to the tally) out of which 27 complaints have been disposed of and action on the remaining 11 complaints is in progress. Scrutiny of Annual property returns for the calendar year 2014 from MMTC employees have been done.

During the year under report Vigilance group of your Company was also instrumental in organizing "Vigilance Awareness Week" in various offices of MMTC from 27.10.2014 to 01.11.2014. The theme for the week was "Combating Corruption -Technology as an enabler".

New initiatives undertaken by Vigilance Division include vigilance training and skill up gradation to vigilance & non-vigilance officers on zonal basis for sensitizing employees about the preventive vigilance aspect, ERP system up-gradation work for plugging the gaps in existing ERP Module, installation of voice recording in the cabin of Head of Finance for recording forex fixings, installation of video camera in premises where gold/silver is delivered, strengthening of KYC norms, and introduction of multi-layer system of audit.

VIGIL MECHANISM

In accordance with the provisions of Section 179 of Companies Act 2013, the Board of your company introduced a Scheme on 'Vigil Mechanism' in compliance with the directions of Audit Committee of Directors. This Audit Committee Vigil Mechanism is established for Directors and employees to report their genuine concerns. The scheme has been notified vide Circular dated 14th August 2014. The concerns if any from any employee/Director shall be addressed by the Chairman of the Audit Committee. During the year under review, no such complaint has been received.

INTEGRITY PACT

Integrity Pact has been implemented to promote transparency/equity amongst the bidders so as to plug possibility of corrupt practices in trade conducted in the Company. Integrity Pact is being implemented as part of series of steps taken by Central Vigilance Commission for ensuring transparency, equity and competitiveness in public procurement. Shri Bijoy Chatterjee, IAS (Retd.) & Shri DRS Chaudhary IAS (Retd.), have been appointed to function as Independent External Monitors (IEM).

CORPORATE SOCIAL RESPONSIBILITYAND SUSTAINABLE DEVELOPMENT

As a responsible corporate body, your Company has always been committed to discharge its social responsibility in the best possible way. Various initiatives have been taken for the benefit of society and the environment since 2006-07. With a view to address the CSR issues, your Company had revised its Corporate Social Responsibility Policy in line with the Guidelines issued by Department of Public Enterprises, Govt, of India and in accordance with the Companies Act, 2013. The average net profit of the preceding 3 years in case of your Company being negative, MMTC was statutorily not required to undertake any CSR initiative during 2014-15. In view that MMTC since 2006 has been continuously undertaking CSR initiatives, it was decided by the Board of Directors, to voluntarily make an allocation of Rs.49 lakhs for undertaking CSR activities during 2014-15, to maintain continuity in its socially responsible stature.

Your Company is a member of the Global Compact Network, India and apart from undertaking CSR/SD initiatives in line with the Global Compact Principles, italso submits its Communication on Progress (COP) to UN Global Compact every year.

The funds allocated for CSR were utilized for construction of two public toilets at Haiderpur in North Delhi, which was undertaken in association with "Sulabh International Social Service Organization", operation and maintenance of which has been assigned to Sulabh International. Besides, a small contribution was made towards Clean Ganga Fund established by the Government of India for the rejuvenation of River Ganga.

In accordance with the provisions of the Companies Act, 2013 a report on CSR activities of your Company in the prescribed format is annexed herewith and forms part of the Annual Report.

CORPORATE GOVERNANCE

Your Company reposes its firm faith in continuous development, adoption and dedication towards the best corporate governance practices. Towards this end, the CG norms enshrined under the Companies Act, 2013 as also the SEBI guidelines in this regard are being implemented in letter and spirit. However, appointment of women director on the Board of the Company is yet to be complied with owing to the fact that all the directors on the board are appointed by the President of India in the case of CPSEs.

Aseparate report on corporate governance along with certificate from M/s Blak&Co.(CP No.11714) regarding compliance of the stipulations relating to corporate governance specified in clause 49 of the Listing Agreement(s) signed with stock exchanges is annexed hereto and forms part of this report. 

CODE OFCONDUCT

Pursuant to Clause 49 (I) (D) of the Listing Agreement signed with Stock Exchanges, a detailed Code of Business Conduct and Ethics for Board Members and Senior Management Personnel has been laid down and hosted on the website of your company. All Board Members and Senior Management Personnel, except one General Manager (under suspension) on the regular rolls of the Company as on 31st March, 2015, to whom the said Code is applicable, have affirmed compliance of the same for the period ended 31st March, 2015.

BUSINESS RESPONSIBILITY REPORT

In accordance with the directives of SEBI and provisions of Clause 55 of Listing Agreement signed with stock exchanges, based on the list of top 100 companies given by BSE, your Company has prepared the Business Responsibility Report for inclusion in the Annual Report for the year 2014-15. The framework and principles suggested by SEBI to assess compliance with environment, social and governance norms pertain to Corporate Social Responsibility and Sustainable Development activities of the Company. The Business Responsibility Report of your Company is annexed herewith and forms part of theAnnual Report.

PUBLIC DEPOSIT SCHEME

As on 1st April 2014, there were no outstanding public deposits and the company did not invite/accept any public deposit during the year ended 31st March, 2015.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

ANNUALRETURN

The extracts of Annual Return pursuant to provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in prescribed form-MGT-9 and the same is annexed herewith.

STATUTORY AUDITOR'S REPORT

The report of Statutory Auditors for the year 2014-15 along with Management's reply to the observations of the Statutory Auditors is annexed herewith.

COMMENTS OF COMPTROLLERS. AUDITOR GENERAL OF INDIA

The Comptrollers Auditor General of India (C&AG) has given 'NIL' comments under section 143 (6) (b) of the Companies Act, 2013 on the accounts of the Company for the year ended 31.03.2015. The communication dated 22nd July, 2015 of C&AG of India in this regard is annexed herewith.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company engaged the services of M/s. Black & Company, Practicing Company Secretaries, New Delhi to conduct the Secretarial Audit of the Company for the financial year ended March 31,2015. The Secretarial Audit Report (in Form MR-3)alongwith Management's Reply on the Observations of the Secretarial Auditor is annexed herewith.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Note 7.5,6.2 and 19 respectively of the Notes forming part of the financial statements.

RELATED PARTY TRANSACTIONS

All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and not at Arm's Length basis. The Audit Committee granted omnibus approval for the transactions undertaken during 2014-15. The approval of the Board and Shareholders through postal ballot for such Related Party Transactions were taken. Suitable disclosures as required under AS-18 have been made in Sub-Note 25 of No. 20 of the Notes to the financial statements. Details of the transaction are provided in Form AOC-2 which is annexed herewith.

The Board approved Policy on Related Party Transactions has been uploaded on the Company's website at the following link:http://mmtclimited.gov.in/files/.pdf/95_party_policy.pdf

RISK MANAGEMENT POLICY

The Board of Directors approved the Risk Management Policy after the same has been duly recommended by the Audit Committee of Directors to take care of various risks associated with the business undertaken by your company. The details of Risk Management as practiced by the Company is provided as part of Management Discussion and Analysis Report, is annexed herewith. 

CONSERVATION OF ENERGY

During the year 2014-15, there was no activity in Mica group of your company. Pursuant to rule 8(3) of Companies (Accounts) Rules, 2014, a statement on conservation of energy is annexed to this report.

PARTICULARS OF EMPLOYEES

Pursuant to provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, it is stated that there were no employees who were in receipt of remuneration exceeding Rs.60 lakhs per annum or Rs. 5.00 lakhs per month during the year 2014-15.

DIRECTORS'RESPONSIBILITYSTATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year ended 31.3.2015;

c) the Directors have taken a proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PHOHIBITION& REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal)Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment, complaints received and disposed off during each calendar year: No. of complaints received : Nil

No. of complaints disposed off : Nil

BOARD OF DIRECTORS

Following are the changes in the Board of Directors of your company since 1st April 2014: -

• Smt. Anita Agnihotri, SS&FA, Department of Commerce, Ministry of Commerce & Industry relinquished the charge of Part Time Director on the Board of MMTC on 16th June, 2014.

• Shri Bhagwati Prasad Pandey, AS & FA, Department of Commerce, Ministry of Commerce & Industry took charge of Part Time Director on the Board of MMTC vice Smt. Anita Agnihotri w.e.f. 16th June, 2014.

• Shri Anil Razdan relinquished the charge of Part Time Non Official (Independent) Director on 12th July, 2014.

• Shri G.S.Vedi relinquished the charge of Part Time Non Official (Independent) Director on 13th July, 2014.

• ShriArun Balakrishnan relinquished the charge of Part Time Non Official (Independent) Director on 15th July, 2014.

• Shri Ved Prakash, Director(Mktg) took the additional charge of CMD w.e.f. 31.12.2014 from Shri D.S. Dhesi who relinquished the charge of CMD, MMTC on 30.12.2014 consequent upon his demitting the office of Additional Secretary in Department of Commerce, Ministry of Commerces Industry.

• Shri R.R. Rashmi, Additional Secretary, Department of Commerce took charge of Part Time Director on the Board of MMTC w.e.f. 24.2.2015 vice Shri Madhusudan Prasad, Special Secretary, Deptt. Of Commerce.

• Shri Ved Prakash assumed the charge of Chairman and Managing Director of MMTC Ltd on 19.3.2015.

• Shri A.K. Bhalla, Additional Secretary, Department of Commerce took charge of Part Time Director on the Board of MMTC Ltd. w.e.f. 29.4.2015 vice Shri R.R. Rashmi.

• Shri Bhagwati Prasad Pandey, AS&FA, Department of Commerce relinquished the charge of Part Time Director on the Board of MMTC on 6.8.2015.

• Shri J.K. Dadoo, Additional Secretary & Financial Advisor, Department of Commerce took charge of Part Time Directoron the Board of MMTC Ltd. w.e.f. 6.8.2015 vice Shri Bhagwati Prasad Pandey. 

The Board places on record its deep appreciation for the commendable services and the contributions made by Smt. Anita Agnihotri, Shri Anil Razdan, Shri G.S.Vedi, ShriArun Balakrishanan, Shri Madhusudan Prasad, Shri D.S. Dhesi, Shri R.R. Rashmi and Shri Bhagwati Prasad Pandey. The Board also welcomes Shri A.K. Bhallaand Shri J.K. Dadoo and expresses its confidence that the Company shall immensely benefitfrom their rich and varied experience.

In terms of provisions of Article 87(4)(A) of Articles of Association of the Company regarding rotational retirement of Directors, Shri M.G. Gupta, Director(Finance) and Shri P.K. Jain, Director(Marketing) shall retire at the AGM and, being eligible, have offered themselves for reappointment.

ACKNOWLEDGEMENTS

Your Directors would like to acknowledge and place on record their sincere appreciation of all stakeholders-Shareholders, DepartmentofCommerce, all Govt. Agencies, RBI and other Banks, Railways, Customs, Ports, NMDC, Customers, Suppliers and other business partners for the excellent support and cooperation received from them during the year. Your Directors also recognize and appreciate the efforts and hard work of all the employees of the Company and theircontinued contribution towards its progress.

By the Order of the Board

sd/-(Ved Prakash)

Chairman and Managing Director

Dated: 13.8.2015