MMTC Ltd Auditors Report.

TO THE MEMBERS OF MMTC LTD.

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of MMTC Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2018, the statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information, in which are incorporated the financial statements for the year ended on that date audited by the Branch Auditors of the Companys Regional Offices at Mumbai, Kolkata, Ahmedabad, Vizag, Chennai, Hyderabad, Bhubaneshwar and Jaipur.

Managements Responsibility for the Standalone Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS Financial Statement in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanation provided to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the state of affairs (financial position) of the Company as at 31stMarch, 2018, its profit (financial performance including other comprehensive income), its cash flows and the changes in the equity for the year ended on that date

Emphasis of Matters

a. We draw attention to Note No.34 (ix) to the standalone Ind AS financial statements in respect of non-provision of liability, if any arises, in case of non- extension of time/waiver/write off of GR-1 forms.

b. We draw attention to Note No. 34 (v), (vi), and 36 (c) to the Standalone Ind AS financial Statements in respect of fund based and non-fund based exposure of the Company in M/s Neelachal Ispat Nigam Limited (NINL)-a joint venture Company.

Our opinion is not modified in respect of these matters.

Other Matter

We did not audit the Ind AS financial statements/ financial information of 8 Regional Offices included in the standalone financial statements of the Company whose Ind AS financial statements/financial information reflect total assets of INR 3,994.44 Cr. as at March 31, 2018 and total revenue of INR 12,856.26 Cr. for the year ended on that date, as considered in the standalone Ind AS financial statements. The Ind AS financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure-1" a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The reports on the accounts of the branch offices of the Company audited under section 143 (8) of the Act by the Branch auditors have been sent to us and have been properly dealt with by us in preparing the report;

d) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;

e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended;

f) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company;

g) With respect to the adequacy of internal financial controls over financial reporting of the company and operating effectiveness of such controls, refer to our separate Report in "Annexure-2"

h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. There are pending litigations including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 34 and 36 to the standalone Ind AS financial statements, the impact of the same is unascertainable as the matters are sub-judice.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred to the Investors Education and Protection Fund by the Company.

3. As required by C & AG of India through directions, issued under Section 143 (5) of the Act, 2013, we give our report in the attached "Annexure-3"

For O.P. Tulsyan & Co.
Chartered Accountants
FRN:500028N
Place: New Delhi Rakesh Agarwal
Date: 29.05.2018 Partner
M No.: 081808

Annexure-1 To the Independent Auditors Report on the Standalone Ind AS Financial Statements of MMTC LTD.

(Referred to in Paragraph 1 under the "Report on Other Legal and Regulatory Requirement")

We further report that:

1. In Respect of Its Fixed Assets

i. The Company has maintained proper records in respect of its fixed assets showing full particulars including quantitative details and situation of fixed assets.

ii. Based on the physical verification reports produced before us, in our opinion, the said assets have been physically verified by the management at reasonable intervals.

iii. Title Deeds of immovable property are held in the name of the company except in the case mentioned below:

Region/Office Asset Description Gross Value Area Remarks
Corporate Office Land for Residential Colony at New Delhi 13.16 Lakhs 32.33 Acres Lease Agreement is in Joint Name of MMTC and State Trading Corporation
Bhubaneshwar Office Residential Building, Roads, Culverts and Electrical Installations 47.57 Lakhs 2 Acres Lease Deed Expired in 201 1 . Paradeep Port recommended for renewal of lease for 15 years and Government has approved the renewal upto 2025. Execution of lease deed is under process.

2. In Respect of Its Inventory

i. As explained to us, the inventories have been physically verified during the year by the Management.

ii. I n our opinion and according to the information and explanation given to us, no material discrepancies were noticed during the course of physical verification.

iii. In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the management needs to be further strengthened in relation to the size of the MMTC Limited and the nature of its business.

3. Loans given to parties covered under section 189

The company has granted unsecured loan to one of its joint venture company, M/s Neelachal Ispat Nigam Limited.

i. I n our opinion and according to the information and explanation given to us, terms and conditions on which loan has been granted is not pre-judicial to the interest of the company.

ii. According to the information and explanation given to us, payment terms of loan and interest were revised by the Board by granting extension and enhancing credit facility for which a fresh agreement is yet to be entered.

iii. According to the information and explanation given to us and in consequence to extension of credit facility extended for which agreement is yet to be entered, we are unable to comment upon the amount overdue, if any, as on balance sheet date.

4. Compliance of Provision of Section 185 and 186 of the Companies Act, 2013 in respect of loans, guarantees and securities

According to the information and explanations given to us, and as per the records verified by us, the company has not granted any loan or given any guarantee and provided any security covered under Section 185 of the Act. During the year, the Board of Directors of the Company has sanctioned extension of credit facility upto a limit of 630.00 Crores(Outstanding 361.70 Cr. as on 31st March 2018) to one of its joint Venture- M/s Neelachal Ispat Nigam Ltd, without taking consent of all the directors present at the board meeting which is required for compliance of section 186of the Act, though, in managements view, the said advance is related to trade activities in the ordinary course of business which is outside the purview of Sec. 186.

5. Acceptance of Deposits

According to the information and explanations given to us, the company has not accepted deposits as per the directive issued by the Reserve Bank of India and the provision of Section 73 to 76 of the Act or any other relevant provision of the Act and the rules framed there under.

6. Maintenance of Cost Records

As explained to us, maintenance of cost records has not been prescribed by the Central Government for the company under Section 148(1) of the Act.

7. Undisputed & Disputed Statutory Dues

(a) According to the information and explanations given to us and as per the records verified by us, the Company has been regular in depositing undisputed statutory dues including Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax with the appropriate authorities.

(b) There were no undisputed amount payable in respect of Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax and other statutory dues in arrear as at 31st March 2018 for more than six months from the date they became payable.

(c) I n case of dues of Income Tax or sales tax or service tax or duty of custom or duty of excise or value added tax or cess which have not been deposited on account of any dispute are attached as Annexure A.

8. Loans from Banks/Financial Institutions/Government/Debentures

According to the information and explanations given to us and as per the records verified by us, the Company has not defaulted in repayment of loans or borrowings to a financial institution, bank, Government or dues to debenture holders.

9. Proceeds of Public Issue(including debt instruments)/Term Loans

According to the information and explanations given to us and as per the records verified by us, the Company has not raised any money during the year through initial/further public offer (including debt instruments). Term loans raised by the company during the year have been utilized for the purpose for which they were obtained.

10. Frauds on or by the Company

According to the information and explanations given to us and based on the audit procedures performed in accordance with the generally accepted auditing practices in India, we report that no fraud by the company or on the Company by its officers or employees has been noticed or reported during the year.

11. Managerial Remuneration

As per notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of Companies Act, 2013 is not applicable to the Company. Accordingly, paragraph 3(xi) of the Order is not applicable to the Company.

12. Nidhi Companies

I n our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions of paragraph 3(xii) of the Order are not applicable to the Company.

13. Related Party Transactions

According to the information and explanations given during the course of our verification, in our opinion, all transactions with the related parties made by the company are in compliance with section 177 and 188 of the Act, where applicable and the relevant details in respect of such transactions have been appropriately disclosed in the Ind AS standaloneFinancial Statements under Ind As-24 - "Related Party Disclosures" specified under Section 133 of the Act read with relevant rules.

14. Preferential Issue

According to the information and explanations given to us and based on our examination of records, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of paragraph 3(xiv) of the Order are not applicable to the Company.

15. Non-Cash Transactions with Directors etc.

According to the information and explanations given to us and based on our examination of records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with the directors as referred to in section 192 of Companies Act, 2013. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

16. Provision of 45-IA of the Reserve Bank of India Act.1934

According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

For O.P. Tulsyan & Co.
Chartered Accountants
FRN.:500028N
Place: New Delhi RakeshAgarwal
Date:29.05.2018 Partner
M. No.:081808

Annexure-2 To the Independent Auditors Report of even date on theInd AS standalone financial statements of MMTC Ltd.

Report on the Internal Financial Controls over financial reporting under Section 143(3) (i) of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MMTC Ltd. ("the Company") as of March 31,2018, in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls:

The Companys Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility:

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting and the Standards on Auditing, issued by the ICAI deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exist, and testing and evaluating the design and operating effectiveness of the internal control based on the assessed risk . The procedures selected depend on the auditors judgment, including the assessment of risks of material misstatements of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting:

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that:

1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting:

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion:

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 201 8, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For O.P. Tulsyan & Co.
Chartered Accountants
FRN.:500028N
Place: New Delhi Rakesh Agarwal
Date:29.05.2018 Partner
M No.:081808