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MMTC

BSE: 513377|NSE: MMTC|ISIN: INE123F01029|SECTOR: Trading
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Notes to Accounts Year End : Mar '18

*Refer note 36 (c)

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, 0.02 crore (PY. Rs, 0.03 crore).

- Includes Rs, 209.79 crore (PY. Rs, 209.79 crore) recoverable from various borrowers and National

Spot Exchange (NSEL) arising on account of default of payment obligation of NSEL against which full provision of Rs, 209.79 crore (PY Rs, 209.79 crore) 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 also investigated the case.

a) As taken, valued and certified by the management.

b) I nventories including goods in transit are valued at lower of the cost or realizable value as on 31st March 201 8. Valuation of closing stock at market price being lower than cost, has resulted in a loss of Rs, 0.64 crore (PY. Rs, 4.72 crore) and also includes Rs, 3.00 crore on account of fair value hedge adjustment (Gain) on account of hedging of gold inventory.

c) Stock-in-trade includes the following:

i) 21020 units (PY. 21020 units) Certified Emission Reductions (CERs) valued at Rs, 0.05 crore (PY. Rs, 0.07 crore) and Nil (PY. 21020 units) Verified Carbon Units (VCUs) valued at Rs, Nil (PY. Rs, 0.03 crore) as per Ind AS-2 ''Inventories'', being lower of cost or net realizable value.

ii) Nil number of CERs under certification.

iii) An amount of '' 4.35 crore (PY. '' 4.30 crore) has been spent on account of Depreciation, O&M cost of Emission Reduction equipment.

d) Stock in Trade includes an inventory of Rs, 856.29 crore (PY. Rs, 1921.83 crore) valued at cost relating to pulses imported under Price Stabilization Scheme of the Government of India to create Buffer Stock of Pulses. (Refer note 36(e)).

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.

Movements in equity share capital: During the year, the company has neither issued nor bought back any shares.

The Company does not have any holding company.

During the year 2017-18, Board of Directors in their meeting held on 19th March, 2018, approved the issue of bonus shares in the ratio of 1:2 i.e. one bonus share of the face value of Rs, 1/- each for every two shares of the face value of Rs, 1/- each fully paid up held by the shareholders on record date which was subsequently, fixed as 4th May, 2018. Issuance of bonus shares will be done by capitalisation of free reserves to the tune of Rs, 50 crore created out of general reserves and profits of the company. The above mentioned shares were allotted by the share transfer committee in their meeting held on 7th May, 2018 to all eligible shareholders. Consequent to the allotment of bonus equity shares, the paid up share capital of the company stands increased to Rs, 150/- crore divided into 150 crore equity share of Rs, 1/each fully paid up w.e.f. 7th May, 2018.

- 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. Interest payable on loan repayable on demand is based on MCLR plus spread of banks.

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

a) I n term of DPE guidelines vide OM dated 3rd Aug 2017 and 4th Aug 2017, the company has revised pay scale of Board level and below Board level Executives w.e.f. 1st Jan 2017 with approval of Board/ Administrative Ministry. Accordingly, liability for the period from 1st Jan 2017 to 31st Mar 2018 amounting to Rs, 11.71 crore (including Rs, 2.41 crore for the period 1st Jan 2017 to 31st Mar 2017) has been made in the accounts during the year.

b) Pay revision of staff cadre employees is also due from 1st Jan 2017 for which final settlement is yet to take place. Keeping in view the past practice, an ad-hoc provision of Rs, 10.45 crore towards the estimated arrears for the period 1st Jan 2017 to 31st Mar 2018 has been made in the accounts during the year.

c) In terms of amendment in the Payment of Gratuity Act w.e.f. 29th Mar 2018 and OM dated 11th April 2018 issued by DPE enhancing ceiling of payment of gratuity to the employees of CPSEs from Rs, 10 Lakhs to Rs, 20 Lakhs provision of Rs, 49.96 crore for all employees (officers and staff) including normal liability on pre revised pay/ceiling has been made in the accounts based on the actuarial valuation as on 31st Mar 2018. Further liability of Rs, 7.00 crore has also been made during the year towards differential gratuity payable to employees (officers and staff) retired during 1st Jan 2017 to 31st Mar 2018.

d) Consequential additional liability in respect of Earned Leave/Half Pay Leave has also been made based on the Actuarial Valuation.

e) During the year (22nd March, 2018) the company notified Voluntary Retirement Scheme and invited applications from employees for opting voluntary retirement with discretion to the management to accept or reject any application without assigning any reason. The said scheme was closed on 20th April, 2018. Total 86 employees had submitted offers opting for VR under this scheme. The management has on 23rd April, 2018 accepted the offers of 65 employees. Accordingly, the termination benefits in the form of ex-gratia and notice pay etc payable to the 65 employees amounting to Rs, 18.26 crore (PY. Rs, Nil) will be recognized in the year 2018-19 in accordance with provisions of Ind AS 19 Employee Benefits

i) Includes interest of Rs, Nil (PY. Rs, 93.38 crore) claimed from APSCSCL, as per the terms of Agreement between MMTC and APSCSCL, on abnormal delayed receipt of Subsidy of Rs, Nil (PY. Rs, 245.31 crore) from the Government by the Company for supply and distribution of RBD Palmolin and Rs, Nil (PY. Rs, 11.05 crore) towards interest on delayed payment made by APSCSCL as per the agreement which have been accounted for on receipt of the said subsidy.

ii) a) Includes Rs, 4.05 crore (PY. Rs, 3.24 crore) 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 to Rs, 45.75 crore (PY. Rs, 41.46 crore) towards the claim Rs, 22.64 crore (PY. Rs, 22.53 crore), interest Rs, 21.41 crore (PY. Rs, 17.24 crore) and other cost etc. Rs, 1.70 crore (PY. Rs, 1.69 crore) has been made up to 31.03.2018.

b) Inculdes Rs, 1.60 crore (PY. Rs, Nil) towards arbitration award decided against the company relating to transactions with an Associate. The amount was deposited with Registrar General Delhi High Court on 10th May 2018 after deducting applicable TDS.

ii) Guarantees issued by Banks on behalf of the Company Rs, 15.82 crore (PY. Rs, 15.43 crore) in favour of customer towards performance of contracts against which backup guarantees amounting to Rs, Nil (PY. Rs, 42.57 crore) have been obtained from associate suppliers.

iii) Letters of Credit opened by the Company remaining outstanding Rs, 179.29 crore (PY. Rs, 65.08 crore).

iv) 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, 414.09 crore (PY. Rs, 600.29 crore).

v) Corporate Guarantees of Rs, 1410.56 crore (PY. Rs, 1460.56 crore) given by the company in favour of financial institutions/banks on behalf of Neelachal Ispat Nigam Limited (NINL), a Joint Venture 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, 180.00 crore given to NINL by a bank against which corporate guarantee amounting to Rs, 90.00 crore 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, 2.50 crore 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, 17.50 crore as on 31.3.2018.

vi) The company entered into a purchase contract with a foreign supplier for import of coking coal for onward sale to NINL (a JV 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, 513.10 crore (USD 7.872 crore @ Rs, 65.18 as on 31.03.2018) (PY Rs, 510.54 crore), cost of arbitration Rs, 6.37 crore (USD 0.098 crore @ Rs, 65.18 as on 31.03.2018) (PY Rs, 6.36 crore) along with interest thereon @ 7.50% p.a. from 30.9.2009 to 12.5.2014 and post award interest @ 15% p.a. from 1st June, 2014 until payment. The company filed petition before the Hon''ble Delhi High Court under section 34 of the Arbitration and Conciliation Act, 1996 against the final award which was not allowed. Against this decision of the court, the company filed an appeal before Hon''ble Division Bench of Delhi High Court that has been admitted by the Hon''ble Division Bench of Delhi High Court. The appeal is yet to come up for regular hearing. In the meantime the party has filed a separate execution petition before separate single bench. The company has requested for disposal of this execution petition stating that the entire matter is pending before the double bench. Next date for hearing has been fixed on 09th July, 2018 for disposal of the execution petition by the single bench.

Pending final out-come of the legal proceedings, the Management has considered it prudent not to make any provision towards the award in its books of accounts as on 31.03.2018, 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 communicated to NINL, the legal position on bearing of liability, if any arising out of the referred dispute.

vii) A back to back supplier of steam coal has claimed an amount of Rs, 50.43 crore (PY. Rs, 50.43 crore) 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.

viii) Custom department have raised demand of Rs, 180.32 crore (PY. Rs, 179.21 crore) at various ROs 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. Also in case of RO Kolkata, Mumbai and Chennai Rs, 17.48 crore (PY. Rs, 17.48 crore), Rs, 21.56 crore (PY. Rs, 21.56 crore) and Rs, 3.32 crore (PY. Rs, 3.32 crore) 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.

ix) 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 for Rs, 1.93 crore (PY. Rs, 1.93 crore) which are being contested. Against this, an amount of Rs, 0.03 crore (PY. Rs, 0.03 crore) has been deposited and bank guarantee of Rs, 1.03 crore (PY. Rs, 1.03 crore) furnished.

x) 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.

xi) 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.

1. Commitments

Capital Commitments: Estimated amount of contracts including foreign currency contracts net of advances remaining to be executed on capital account and not provided for is Rs, Nil (P.Y. Rs, 0.08 crore). Capital commitment in respect of investment in joint venture Rs, 3.02 crore (PY. Rs, 8.43 crore)

2. General Disclosures

a) Following goods on account of un-billed purchases are held by the Company under deposit and shown under other current assets (note no. 11 (B)) as well as other current liabilities (note no.21).

b) 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.

c) Investment in and advances to Neelachal Ispat Nigam Ltd (NINL)-Joint Venture company :

i) The company alongwith Government of Odisha has set up a 1.1 MT integrated steel plant in Odisha and invested Rs, 379.69 crore (PY. Rs, 379.69 crore) (Note 6) towards 49.78% in equity capital in NINL.

ii) The company has been extending, from time to time, short term credit facility (cash credit) to NINL upto a limit of Rs, 1425.00 crore for its day to day operational activities on continuing basis. In addition, a trade related financial facility to the extent of Rs, 550.00 crore has also been extended. Against this, outstanding under trade receivable (note 7) is Rs, Nil (PY. Rs, 231.00 crore), under Other Assets (advances to related parties) (note 11) is Rs, 1786.70 crore (PY. Rs, 966.50 crore) and under Loans (note 8) is Rs, Nil (PY. Rs, 130.00 crore) aggregating to Rs, 1786.70 crore (PY. Rs, 1327.49 crore) as against total net worth of the company of Rs, 1449.45 crore as on 31.03.2018.

iii) The company has also given corporate guarantees amounting to Rs, 1410.56 crore (PY. Rs, 1460.56 crore) 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, 2.50 crore every month during the tenor of the loan i.e. 4 years from October, 2014 against which pending commitment is Rs, 17.50 crore as on 31.3.2018(note 34 (v)).

iv) The company has recognized trade related interest of Rs, 138.73 crore (PY. Rs, 72.08 crore) and other interest income of Rs, Nil (PY. Rs, 15.40 crore) on the credit facilities extended to NINL which is included in total outstanding.

v) NINL have given corporate gurantee of Rs, 945.00 crore (PY. Rs, 945.00 crore) to the company to secure credit facilities extended to them from time to time.

vi Ministry of Commerce on 4th May 2018 has conveyed approval to the company to infuse an additional equity of Rs, 149.34 crore in NINL subject to contribution of equity by other stake holders and in principle approval by the banks to extend credit facilities in accordance with the revised business plan etc.

vii) NINL has been incurring losses for last 6 years and its net worth has become negative (Rs, (-) 552.05 crore as on 31.3.2018 and Rs, (-) 175.14 crore as on 31.3.2017). Net assets of NINL as per their financial statements, excluding MMTC dues are Rs, 1234.65 crore as on 31.3.2018.

viii) Considering the expected operationalization of iron ore mine owned by NINL during 2018-19, capital repair of blast furnace already undertaken during 2017-18 and upward trend in the price and demand of Steel globally, the Management has considered its investment and advances as good.

d) The Company has filed a recovery suit of Rs, 31.40 crore against M/s AIPL in respect of Mint sale transaction (PY. Rs, 31.40 crore) which included overdue interest of Rs, 2.95 crore (PY. Rs, 2.95 crore) 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, 167.20 crore (PY. Rs, 167.20 crore) which is not tenable as per legal opinion and is being contested.

e) Under Price Stabilization Scheme of the Government of India to create Buffer Stock of Pulses, MMTC imported Pulses from July 2015 onwards until 31.03.2017. As per the scheme MMTC''s trading margin has been fixed at 1.5% on C&F cost at the time of sale and all expenses related to the import shall be to the account of Govt. The difference between the sale realized and cost incurred including MMTC''s margin has been shown as claim receivable from Govt. and adjusted against advance received from Govt. pending liquidation of entire stock imported under the scheme. The stocks have been stored at various CWC/SWC/Other God owns in various States and valued at cost.

f) A claim for Rs, 1.53 crore (PY. Rs, 1.89 crore) against an associate on account of damaged imported Polyester is pending for which a provision of Rs, 1.53 crore (PY. Rs, 1.53 crore) exists in the accounts after taking into account the EMD and other payables amounting to Rs, Nil (PY. Rs, 0.36 crore). EMD & other payables of Rs, 0.36 crore which was payable to the party last year has been adjusted against the claim amount of Rs, 1.89 crore which has resulted in reduction of claim receivable. The company has requested customs for abandonment which is pending for adjudication. A criminal & civil suit has been filed against the Associate.

g) 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, 3.55 crore (PY. Rs, 3.53 crore) 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 which was vacated and Indian bank had to make payment to the foreign bank. The matter is still pending in the court. 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, 8.60 crore (PY. Rs, 8.60 crore), already paid for and after adjustment of EMD & payables provision for the balance amount has been made during the year 2014-15.

h) At Regional Office, Hyderabad fake bills of lading covering two shipments of copper valued at Rs, 3.75 crore (PY. Rs, 3.75 crore) 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.

i) Hon''ble Delhi High Court has directed the Company to deposit Rs, 39.62 crore (PY. Rs, 39.62 crore) stated to be receivable by one of the Company''s coal suppliers as per their books of accounts from MMTC in a case relating to execution of decree filed by a foreign party against the coal supplier. MMTC has filed application and counter affidavit stating that the supplier''s contractual obligations are yet to be discharged and MMTC is unable to deposit any amount at this stage. Any amount found payable to the supplier after resolution of all issues, the same will be deposited with the court instead of releasing to the supplier without any liability on MMTC. The hearings are in progress.

3. Financial Instruments- Fair Values and Risk Management

4.Financial Instruments by Categories

The following tables show the carrying amounts and fair values of financial assets and financial liabilities by categories. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

5.Fair Value Hierarchy

- Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active markets.

- Level 2 - Level 2 hierarchy includes financial instruments measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 - Level 3 hierarchy includes financial instruments measured using inputs that are not based on observable market data (unobservable inputs).

The following tables present fair value hierarchy of assets and liabilities measured at

fair value:

6. Financial risk management, objectives and policies

The company''s activities expose it to the following financial risks:

-market risk -credit risk and -liquidity risk.

The company has not arranged funds that have any interest rate risk.

a) Market risk

i) Foreign Exchange Risk

The company has import and export transactions and hence has foreign exchange risk primarily with respect to the US$. The company has not arranged funds through long term borrowings. The short term foreign currency loans (buyer''s credit) availed from banks are fixed interest rate borrowings. As a result, the company does not have any interest rate risk. The company''s risk management policy is to use hedging instruments to hedge the risk of foreign exchange.

The company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. The company designates the spot element of forward contracts with reference to relevant spot market exchange rate. The difference between the contracted forward and the spot market exchange rate is treated as the forward element. The changes in the spot exchange rate of hedging instrument that relate to the hedged item is deferred in the cash flow hedge reserve and recognized against the related hedged transaction when it occurs. The forward element of forward exchange contract is deferred in cost of hedging reserve and is recognized to the extent of change in forward element when the transaction occurs.

The following tables show the summary of quantitative data about the company''s exposure to foreign currency risk from financial instruments expressed in '' :

The company has no exposure in respect of foreign currency receivable/payable since loss/ gain is to the account of the Associate supplier/customer except on provision towards litigation settlement where matter is still under dispute. Also the company has taken forward exchange contracts in respect of payables at the risk and cost of the associate.

The company has no exposure in respect of foreign currency receivable/payable since loss/ gain is to the account of the Associate supplier/customer except on provision towards litigation settlement where matter is still under dispute. Also the company has taken forward exchange contracts in respect of payables at the risk and cost of the associate.

Sensitivity:

As of March 31, 2018 and March 31, 2017, every 1% increase or decrease of the respective foreign currencies compared to our functional currency would impact our profit before tax by approximately '' NIL and '' NIL, respectively.

a) Price Risk

The company''s exposure to equity securities price risk arises from investments held by the company and classified in balance sheet as at fair value through other comprehensive income. Out of the two securities held by the company, one is listed in NSE and the other (ICEX) is not listed.

As of March 31, 2018 and March 31, 2017, every 1% increase or decrease of the respective equity prices would impact other component of equity by approximately Rs, 0.19 crore and Rs, 0.20 crore, respectively. It has no impact on profit or loss.

b) Credit Risk

Credit risk refers to the risk of default on its obligation by a counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Accordingly, credit risk from trade receivables has been separately evaluated from all other financial assets in the following paragraphs.

Trade Receivables

The company''s outstanding trade receivables are mostly secured through letter of credit/BG except in respect of JV''s and Govt of India.

Impairment on trade receivables is recognized based on expected credit loss in accordance with provisions of Ind AS 109. The company''s historical experience for customers, present economic condition and present performance of the customers, future outlook for the industry etc. are taken into account for the purposes of expected credit loss.

Credit risk exposure

Trade receivables are generally considered credit impaired when overdue for more than three years (except government dues), unless the amount is considered receivable, when recoverability is considered doubtful based on the recovery analysis performed by the company for individual trade receivables. The company considers that all the above financial assets that are not impaired though overdue are of good credit quality.

With regard to ceratin trade receivables, the company has equivalent trade payables to associate suppliers which are payable on realization of trade receivables. Such trade receivables are considered not impaired though past due.

Other financial assets

Credit risk relating to cash and cash equivalents is considered negligible because our counterparties are banks. We consider the credit quality of term deposits with scheduled banks which are subject to the regulatory oversight of the Reserve Bank of India to be good, and we review these banking relationships on an ongoing basis. Credit risk related to employee loans are considered negligible since major loans like house building loans, vehicle loans etc. are secured against the property for which loan is granted to the employees. The other employee loans are covered under personal guarantee of concerned employees along with surety bonds of other serving employees. There are no impairment provisions as at each reporting date against these financial assets. We consider all the above financial assets as at the reporting dates to be of good credit quality.

c) Liquidity Risk

Our liquidity needs are monitored on the basis of monthly and yearly projections. The company''s principal sources of liquidity are cash and cash equivalents, cash generated from operations and availability of funding through an adequate amount of committed credit facilities to meet obligations when due.

Due to the dynamic nature of underlying businesses, the company maintains flexibility in funding by maintaining availability under committed credit lines.

Short term liquidity requirements consists mainly of sundry creditors, expense payable, employee dues arising during the normal course of business as of each reporting date. The company maintains sufficient balance in cash and cash equivalents to meet short term liquidity requirements.

7. Impact of Hedging Activities

8 Cash Flow Hedge

As at 31st March 2018 there was no outstanding Hedging Instrument on account of the company.

9. Fair Value Hedge

As per the Risk Management Policy, the company enters into forward contracts with commodity exchanges to hedge against price fluctuations in gold and silver inventories. The gain or loss on the hedging instrument is recognized in profit or loss. The hedging gain or loss on the hedged item adjusts the carrying amount of the hedged item and is recognized in profit or loss.

10. Disclosure in respect of Indian Accounting Standard (Ind AS)-36 Impairment of assets

During the year, the company assessed the impairment loss of assets and accordingly provision towards impairment in the value of PPE amounting to Rs, Nil has been made during the year.

11. Disclosure in respect of Indian Accounting Standard (Ind AS)-19 Employee Benefits

12.General description of various employee''s benefits schemes are as under:

a) 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. The scheme is funded by the company and the liability is recognized on the basis of contribution payable to the insurer, i.e., the Life Insurance Corporation of India, however, the disclosure of information as required under Ind AS-19 have been made in accordance with the actuarial valuation.

As per Actuarial Valuation company''s expected contribution for FY 2018-19 towards the Gratuity Fund Contribution is Rs, 6.55 crore (PY. Rs, 0.43 crore) . However, the company is making contribution to the fund as per the demand made by Life Insurance Corporation of India.

b) Leave Compensation:

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.

The liability on this account is recognized on the basis of actuarial valuation.

c) Long Service Benefits: Long Service Benefits payable to the employees are as under-

i) Service Award:

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

ii) Compassionate Gratuity

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

iii) Employees'' Family Benefit Scheme

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, 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.

iv) 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

The summarized position of various defined benefits recognized in the Statement of Profit & Loss, Other Comprehensive Income (OCI) and Balance Sheet & other disclosures are as under:

d) Provident Fund: The Company''s contribution paid/payable during the year to Provident Fund and the liability is recognized on accrual basis. 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.

e) Superannuation Pension Benefit - During the year, the Company has recognized Rs, 4.55 crore (PY. Rs, 8.04 crore) towards Defined Contribution Superannuation Pension Scheme in the Statement of Profit & Loss.

f) Post-Retirement Medical Benefit: Available to retired employees at empanelled hospitals for inpatient treatment and also for OPD treatment under ''Defined Contribution Scheme'' as under:

i) The liability for the year 2017-18 has been calculated at the rate of 1.50% of PBT in respect of scheme for retirees prior to 1.1.2007 and @ 4.50% of Basic DA paid during 2017-18 in respect of scheme for retirees after 1.1.2007, as per the defined contribution scheme.

ii) Pending creation of trust for management of fund, the contribution for the current year along with the liability as on 31.3.2017 has been shown as company''s obligation as on

31.3.2018 under ''Defined Contribution Scheme'' and additional contribution @ 6.25% (PY. @ 8.50%) has been added during the year in the present value of obligation being one year closer to settlement.

iii) During the year, total expenses of Rs, 14.49 crore (PY. Rs, 17.12 crore) has been charged to Profit & Loss Account.

13. Disclosure in respect of Indian Accounting standard (Ind AS)-108: Operating Segments

Based on the management approach as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the company''s performance and allocates resources based on an

analysis of various performance indicators by business segments. Accordingly, information has been presented for each business segment. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual business segments, and are as set out in the significant accounting policies. Business segments of the company are:-Precious Metals, Metals, Minerals, Coal & Hydrocarbon, Agro Products, Fertilizer and Others

Segment Revenue and Expense Details regarding revenue and expenses attributable to each segment must be disclosed

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances etc. Assets relating to corporate and construction are included in unallocated segments. Segment liabilities include liabilities and provisions directly attributable to respective segment.

b) Subsidiary

MMTC Transnational Pte. Ltd., Singapore

c) Joint Venture:-

i) Neelachal Ispat Nigam Ltd

ii) Free Trade Warehousing Pvt. Ltd.

iii) MMTC Pamp India Pvt. Ltd.

iv) MMTC Gitanjali Ltd.

v) Sical Iron Ore Terminal Ltd.

vi) TM Mining Co. Ltd.

d) Government and its related entities

i) Government of India - holds 89.93% equity shares of the Company and has control over the company.

ii) Central Public Sector Enterprises in which Government of India has control.

e) Post-Employment Benefit Plan

i) MMTC Limited CPF Trust

ii) MMTC Limited Gratuity Trust

iii) MMTC Limited Employees'' Defined Contribution Superannuation Trust

14. Balances of some of the Trade Receivable, Other Assets, Trade and Other Payable are subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made. However, management does not expect to have any material financial impact of such pending confirmation/ reconciliation.

15 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).

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

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

i) Changes in the wording of Accounting Policy No.2.2 Functional and Presentation Currency for reporting of financial in crores of Indian rupees (Rs, in crores) (up to two decimals).

ii) Accounting Policy No. 2.4 (i) (c) (iv) has been added under Revenue Recognition to clarify the revenue recognition when gold procured domestically to bring the same in line with the existing practices followed in such cases.

The above changes have no financial impact on the financials of the company.

18. Amount in the financial statements are presented in Rs, crore (up to two decimals) except for per share data and as otherwise stated. Certain small amounts may not appear in financial statements due to rounding off in Rs, in crore. Previous year''s figures have been regrouped/ rearranged wherever considered necessary.

19. Approval of financial statements

The financial statements were approved by the board of directors and authorized for issue on 29.05.2018

Source : Dion Global Solutions Limited
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