MMTC Ltd

The Members

MMTC Limited,

New Delhi.

Ladies & Gentlemen,

On behalf of Board of Directors, I have pleasure in presenting 47th Annual Report onthe performance of your Company for the financial year ended 31st March 2010 along withaudited statements of accounts, Auditor's Report & Review of Accounts by theComptroller and Auditor General of India.

RESULTS OF OPERATIONS

Your Company exhibited outstanding performance in recording its highest ever toplinefor the sixth consecutive year. Your company achieved record level business turnover ofRs. 451,242 million during 2009-10 registering a growth of more than 22% over the previousyear. This best ever business turnover since MMTC's inception in 1963 includes exports ofRs. 32,228 million, highest ever imports of Rs. 399,690 million and domestic trade of Rs.19,324 million. The other trade related earnings contributed Rs. 1397 million. The netprofit of Rs. 2162 million earned by your Company registered a growth of 54% over previousyear and is the highest ever net profit after tax earned by the Company in its history.

This noteworthy performance is despite intense competition faced by the Company in allits trade activities -- both from local as well as international players which putconsiderable pressure on margins. This was responded to through growth in core operationsby competitive offering of products bundled with efficient services, as also bysuccessfully tapping new areas of business by innovative value addition, aggressivemarketing efforts and better utilization of available resources.

The highlights of the Company's performance during 2009-10 are as below:-

(Rs. in million)

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 & RANKINGS

Following Awards and Rankings were conferred on your Company during 2009-10:

1. MOU Excellence Award for the year 2007-08

2. All India Export excellence award (Silver Trophy) for the Year 2008-09 in MerchantEnterprise category by EEPC;

3. CAPEXIL highest award for Highest Export in Minerals and Ores sector for the year2008-09 (18th time in a row);

4. Ranked 5th by CAPITAL MARKET in their 2009 Compendium of TOP 500 Companies in India.

5. Top Indian Company in the Trading Sector by Dun & Bradstreet in their rankings"India's Top 500 companies 2009". In the same publication your Company wasranked 11th based on total income for the year 2008-09.

6. Amity Excellence Award in the category "Wealth Creator of the Year" for2009-10.

7. Ranked 14th amongst India's top Companies by "Business Standard" in itspublication "BS1000" released in February 2010.

8. Ranked 10th in the list of India's Top PSUs 2010 released by Dun & Bradstreet

DIVIDEND

The Board of Directors recommended declaration of dividend of 90% on the pre-splitandpre- Bonus equity capital of the Company for the year 2009-10.

RESERVES

A sum of Rs. 10734 million was available in the reserves and surplus of your Company ason 1st April 2009. Your Directors have proposed that out of Rs. 1637.64 million availableout of the profits for the year 2009-10, after payment of dividend and tax thereon, anamount of Rs.220 million be transferred to General Reserves of the Company and balanceprofit of Rs. 1417.64 million be carried forward as retained profits. Accordingly anamount of Rs. 12371.47 million shall be available in "Reserves and Surplus" ofyour Company as on 31st March 2010.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Foreign Exchange earnings and outgo of your Company during 2009-10 have been asunder: -

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 capitalof USD 1 million. During the year 2009-10, MTPL achieved its second best ever businessturnover of USD 525 million & second highest Profit after tax of USD 6.54 millionsince inception. The net worth of MTPL stood at USD 18.03 million as on 31st March 2010.MTPL has so far paid total dividends of US$ 6.15 million as against capital of US$ 1million contributed by your company, besides multiplying its net worth by nearly 18 timessince its inception.

MTPL continues to enjoy prestigious "Global Trader" (GT) status awarded to itby International Enterprise, Singapore since FY 2000.

Pursuant to the provisions of Section 212 of the Companies Act, 1956, the auditedfinancial statements of MTPL together with Directors' Report & Auditors' report areattached herewith.

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

Your company had set up Neelachal Ispat Nigam Limited (NINL) - an iron & steelplant of 1.1 million tonnes per annum capacity, 0.8 million tonne coke ovens andby-product unit with captive power plant, jointly with Govt. of Orissa. The project hasfirm Iron ore supply linkages and also has captive Iron ore mining rights for reservesestimated at about 150 million tons. The construction of phase-lI of the Project with anestimated cost of Rs.18550 million is under progress. During the year 2009-10, NINLachieved a sales turnover of Rs.15800 million and generated net profit of Rs. 379 million.Future Projects/ Joint Ventures

Aiming at diversification and with a view to add value to its existing tradingoperations, your Company has undertaken various strategic initiatives following public-private partnership route. Brief details of these value multiplier strategic initiativesto enhance your Company's future sustainability are given below:

(i) Your Company has promoted a Commodity Exchange under the name and style of"Indian Commodity Exchange Limited" which has since commenced operations inNovember 2009.

(ii) Your Company is participating in the equity of a Currency Futures Exchange underthe name and style of "United Stock Exchange of India Ltd." which is also likelyto commence operations soon.

(iii) Your Company has joined hands with an international producer as a joint venturepartner for setting up a gold/silver medallion manufacturing unit, which would alsoinclude a gold refinery as an integral part, under the name and style of "MMTC-PampIndia Private Limited". The civil construction activities for medallion manufacturingunit located in Haryana are already 95% complete and the medallion manufacturing unit islikely to commence trial production in the last quarter of 2010 and commercial productionin first quarter of 2011.

(iv) For effective marketing of the finished products from above unit, as well asjewellery from other sources, your company is setting up, in partnership with a leadingIndian Company, a chain of retail stores at various cities in India for sales ofmedallions, jewellery and its homegrown brand of 'SANCHI' silverware. Towards this end aspecial purpose vehicle (SPV) under the name and style of "MMTC-Gitanjali PrivateLimited" has been incorporated and 14 retail outlets have already been opened invarious cities/towns in India.

(v) Your Company is setting up permanent berth with loading facilities for iron ore atEnnore Port jointly with SICAL and L&T Infrastructure Ltd. under the name and style ofM/s. SICAL Iron Ore Terminals Limited. The permanent berth being constructed by M/s. SICALIron Ore Terminals Limited is likely to be operational by end August 2010.

(vi) Your Company is also developing a deep draught iron ore berth at Paradeep Port(Orissa) jointly with Noble Group Ltd. and Gammon Infrastructure Projects Ltd. under thename and style of M/s. Blue Water Iron Ore Terminal Private Ltd. The project is in theinitial phase and will be ready only towards end 2013.

(vii) Towards investing in mining exploration your Company has executed a joint ventureagreement with M/s. TATA Steel Ltd. for exploration and development of mines for minerals,ferrous and non-ferrous ores, precious metals, diamonds and coal etc., both in India andabroad.

(viii) To facilitate promotion of two-way trade, your Company is setting up free tradeand warehousing zones at Haldia and Kandlaon lines similar to Special Economic Zones.

(ix) Your Company has been allotted a coal mine in the Jharkhand State having estimatedreserves of about 700 million MT. The prospecting license for the said mine has since beenissued by the concerned authorities and pre-feasibility study commenced.

INDUSTRIAL RELATIONS & HUMAN RESOURCE MANAGEMENT

Cordial and harmonious industrial relations continued to prevail in your Company withno man-days lost during the year. Regular meetings were held with the Unions /Associations for arriving at amicable resolution of personnel issues with a view toachieve Company's goals and objectives.

The aggregate manpower of the company as on 31st March 2010 stood at 1838, includingsix Board level executives, the balance comprising of 608 Officers, 1139 staff & 91workers. This manpower strength includes 21 officers, 130 staff & 91 workers oferstwhile Mica Trading Company Ltd., which had been merged with your company pursuant tothe orders of BIFR. While the composite representation of the total manpower consisted ofwomen employees representing 18.28% (336 employees) of the total manpower, therepresentation of SC, ST, OBC & persons with disabilities (PWD) was to the extent of21.10% (388 employees), 7.29% (134 employees), 1.41% (26 employees) and 1.68% (31employees) respectively. During the year 8 officers were inducted through campusrecruitment and 2 through lateral induction. Presidential Directives on reservations forSCs, STs, OBCs and PWD in services were followed fully in recruitment and promotion. In aneffort for rightsizing the manpower, Voluntary Retirement Scheme was offered which wasavailed by 10 officers, 11 staff cadre employees and 03 workers.

Aiming towards further enhancing / upgrading the skills of employees in the constantlychanging business scenario, 1270 employees were imparted training during the year indifferent spheres of Company's activities. This was done through programmes organized,both with in-house expertise as well as external resources, by renowned institutions /organizations. The employees deputed for training included 221 employees belonging to SC,70 to ST and 299 women employees. In terms of man-days such training works out to 2773training man-days during the year 2009-10.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company is committed to uphold Official Language Policy of the Government. Towardsthis and to promote usage of the Official Language by employees of the Company, severalprogrammes in the form of Hindi workshops, Hindi seminars, Hindi Day/Week/ Fortnight wereorganized at the Corporate Office and Regional Offices.

During the year the Company had the privilege of interacting with the ParliamentaryCommittee on Official Languages. This Committee inspected/ visited corporate office &reviewed the measures/ steps taken for implementation of the Official Language policy. TheHon'ble Committee expressed satisfaction on the steps/ measures taken and the progressmade in implementation of Official Language.

VIGILANCE

Continuing to foster the goodwill & confidence stemming from value based businesspractices and strengthening the Company as a professionally managed, globally competitive& internationally reputed organization, the Vigilance group of your Company carriedfurther its focus on preventive vigilance by stepping up surprise inspections. During theyear 311 vigilance and 120 non-vigilance inspections were conducted and based on thefeedback received, corrective/ preventive measures were suggested. An annual calendar ofvigilance inspections was prepared by the group well in advance to ensure systematic andregular vigilance inspections. Special emphasis was also laid on updation of trade relateddrills/ manuals, streamlining of tendering and other procedures in line with theguidelines issued by Central Vigilance Commission.

During the year under report Vigilance group of your Company was also instrumental inorganizing "Vigilance Awareness Week" in various offices of MMTC in November2009 whereat stress was laid upon increasing vigilance awareness amongst employees andbusiness associates, to bring enhanced transparency in public dealings.

CORPORATE SOCIAL RESPONSIBILITY

Your Company had already adopted Corporate Social Responsibility as Policy initiativein the year 2006-07. The main focus of the Company's CSR policy is in the areas ofinfrastructure development, promotion of literacy, health care, promotion of afforestationin mining areas and relief & restoration in times of natural calamities in thevicinity of MMTC's operations. Recently your Company has reoriented its CSR policy inaccordance with the guidelines issued by Department of Public Enterprises on the subject.

CORPORATE GOVERNANCE

Corporate governance is an area of major significance for all those who are affected byorganizations directly or indirectly, whether as investors, directors, employees,suppliers, customers or the community in general. Your Company remains committed anddedicated to continuous development and adoption of the best corporate governancepractices, which include honesty, trust and integrity, transparency, performanceorientation, responsibility and accountability, mutual respect, and commitment to theorganization.

A separate report on corporate governance along with Statutory Auditor's certificateregarding compliance of the stipulations relating to corporate governance specified inclause 49 of the listing agreement(s) signed with stock exchanges is annexed to and formspart of this report.

CODE OF CONDUCT

Pursuant to Clause 49 (l)(D) of the Listing Agreement signed with Stock Exchanges, adetailed Code of Conduct for Board Members and Senior Management Personnel has been laiddown and hosted on the website of your Company. All Board Members and Senior ManagementPersonnel (except one) on the regular rolls of the Company as on 31st March 2010, to whomthe said Code is applicable have affirmed compliance of the same for the period ended 31stMarch 2010. Action against the one defaulting General Manager is in progress.

PUBLIC DEPOSIT SCHEME

As on 1st April 2009, there were no outstanding public deposits and the Company did notinvite/ accept any public deposit during theyearended 31st March 2010.

STATUTORY AUDITORS' REPORT

The Statutory Auditors have not given any comments having an impact on the profit forthe year 2009-10. Applicable disclosures have been made in the 'notes forming part ofaccounts' in respect of other observations contained in the report of statutoryAuditors,as annexed, which have no financial impact on the profit for the year 2009-10.

COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comptroller & Auditor General of lndia(C&AG) has given 'Nil' comments undersection 619(4) of the Companies Act, 1956 on the accounts of the Company for the yearended 31.03.2010. The communication dated 26th July 2010 of C & AG in this regard isannexed herewith.

CONSERVATION OF ENERGY

During the year 2009-10, there was no activity in Mica group of your company. Pursuantto Section 217(i)(e) of the Companies Act, 1956, a statement on conservation of energy isannexed to this report.

PARTICULARS OF EMPLOYEES

Pursuant to provisions of section 217(2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975, as amended from time to time, astatement of the particulars of employees who were in receipt of remuneration exceedingRs.24 lakhs per annum or Rs. 2.00 lakhs per month during the year 2009-10 is annexed tothis report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, yourDirectors state:

i) That in the preparation of the annual accounts, the applicable accounting standardshave been followed along with proper explanation relating to material departures;

ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year ended 31.3.2010;

iii) That the Directors have taken a proper and sufficient care for the maintenance ofthe adequate accounting records in accordance with the provisions of Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv) That the Directors have prepared the annual accounts on a going concern basis.

BOARD OF DIRECTORS

Mr. R Gopalan, relinquished the charge of part-time Director on the Board of MMTC andMr. P K Chaudhery AS, Department of Commerce, Ministry of Commerce & Industry tookover as part time Director on the Board of MMTC vice Mr. R Gopalan w.e.f.14th January2010.

Mr. Ved Prakash took over the charge of Whole Time Director (Marketing) on the Board ofMMTC w.e.f. 19th February 2010.

Mr. Adarsh R Goyal relinquished the charge of Whole Time Director (Marketing) on 31stDecember 2009 on superannuation.

Mr. S K Kar relinquished the charge of Whole Time Director (Finance) on 30th June 2010on superannuation.

The Board places on record its appreciation for the commendable services and thecontributions made by Mr. R Gopalan, Mr. S K Kar and Mr. Adarsh R Goyal towards effectivedischarge of the functions of the Board and its Committees. The Board also welcomes Mr. PK Chaudhery & Mr. Ved Prakash and expresses confidence that the Company shallimmensely benefit from their rich and varied experience.

In terms of provisions of Article 87(4)(A) of Articles of Association of the Companyregarding rotational retirement of Directors, Dr. S Behuria, Director, Mr. Sunir Khurana,Director (Marketing), Mr. Anil Baijal, Non Official Part time

Director and Mr. H L Zutshi, Non Official Part time Director shall retire at the AGMand being eligible have offered themselves for reappointment.

ACKNOWLEDGEMENTS

Your Directors are thankful to the Department of Commerce, all Govt. Agencies, RBI andother Banks, Railways, Customs, Ports, NMDC, Customers and Suppliers for their valuablesupport and cooperation during the year. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services rendered by managers and staff ofyour company without which it would not have been possible to realize vastly improvedbusiness turnover and profit recorded during the year.