SUMMER TRAINING REPORT ON

“ANALYSIS OF FINANCIAL STATEMENTS OF MMTC

LIMITED”
Undertaken at

“MMTC LIMITED”
Submitted in partial fulfillment of the requirements

For the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

to

Guru Gobind Singh Indraprastha University, Delhi

Under the Guidance of Submitted by

Dr. Ajay Pratap Singh Paras Jain

Faculty Guide MBA-III Sem

Enrollment No.:03121303912

Session 2012 – 14

1
 LIST OF CONTENTS

S.No. Topic Page No.

1 Acknowledgement 3

2 Certificate of completion 4

3 Project Completion Certificate 5

4 Executive Summary 7-8

5 Objective 9

6 MMTC’s profile 10-16

7 Operating areas 17-23

8 Structure of the finance department 24

9 Functions of the divisions of the finance department 25-26

10 Financial statements of MMTC Ltd. 27-31

11 Performance at a glance 32

12 Working at MMTC 33
 Import procedure followed at MMTC 34-36
 Export procedure followed at MMTC 37-39

13 Major documents in import/export 40-48

14 My experience 49

15 My views on MMTC 50

16 Bibliography 51

ACKNOWLEDGEMENT

2
As the outset I am grateful to MMTC Ltd for having given me the opportunity to

do my summer internship with them.

I take this opportunity to thank Mr. Deepak Kr.Dua (DGM, F& A) who not only

served as my guide at MMTC LIMITED, but also encouraged and challenged me

throughout my summer internship program. He gave me his valuable time and

guided me at each step with his experience and provided me all the required

information.

A sense of gratitude is nor enough to express my sincere thanks towards

Mr. Nishant Kumar (Dy. Manager F & A) who guided me with his insights and

knowledge. He took active interest in my project and was always there to give me

his word of guidance.

My sincere thanks to Dr. Ajay Pratap Singh, my faculty guide who took active

intrest in my project and was always there to give his word of valuable guidance.

I duly acknowledge with gratitude the help and cooperation received from the
entire MMTC LIMITED team.

Paras Jain

Certificate of completion

3
 To Whom It May Concern

I _______________________, Enrolment No. ______________from MBA-III Sem of the Tecnia Institute

of Advanced Studies, Delhi hereby declare that the Summer Training Report (MS-201)
entitled______________________________________________________________________________
_______________at ________________________________ is an original work and the same has not
been submitted to any other Institute for the award of any other degree. A presentation of the
Summer Training Report was made on _______________________ and the suggestions as approved
by the faculty were duly incorporated.

Date: Signature of the

Student

Certified that the Summer Training Report submitted in partial fulfillment of Master of Business
Administration (MBA) to be awarded by G.G.S.I.P. University, Delhi by _________________________,
Enrolment No. ________________ has been completed under my guidance and is Satisfactory.

Date: Signature of the Guide:

Name of the Guide:

Designation:

4
 Project completion certificate

This is to certify that……………………………………………………………………………………….……(Full Name of the

Student), a student of Master of Business Administration (MBA), a class of 2012, Tecnia Institute of
Advanced Studies, Affiliated to GGS.IP. University bearing Enrolment No.……………………………………….
………., has undertaken the Summer Internship Training at …………………………………………………………………..
(Name of the Company) during ………………………..……… to ………………………………….… under my
supervision & guidance.

He / She has conducted a study & completed the STR Titled …………….
…………………………………………………………….

……………………………………………………………………………………………………………………………………………………………
…………..

Signature of the Guide Seal of Organization

Name of the Guide: Date:

Designation:

Address:

5
EXECUTIVE SUMMARY

6
The project is on “ANALYSIS OF FINANCIAL STATEMENTS
OF MMTC LIMITED”

The main objective of the study was to study financial statements of MMTC
Limited.
The project includes the mission and objectives of the company along with its
performance and the product line. The report includes the functions of the finance
department, its structure and working.
 
The report will first give you a brief about Accounting system at MMTC,
Financial statements of MMTC Limited.,

You will also get information on Import procedure followed at MMTC, Export
procedure followed at MMTC; the report includes each and every step involved in
the import/export of any product, as well as the major documents required.

 
After this you will come to know about use of electronic data in decision making at
MMTC
 
Apart from this you will come to know about how I analyzed & interpreted the
collected data. I hope that you will find this report interesting & will help you in
conducting further studies on this sector.

Corporate Mission

7
 As the largest trading company of India and a major trading company of
Asia, MMTC aims at improving its position further by achieving sustainable
and viable growth rate through excellence in all its activities, generating
optimum profits through total satisfaction of shareholders, customers,
suppliers, employees and society.

Co
Corporate Objectives

 To be a leading International Trading House in India operating in the

competitive global trading environment, with focus on bulk as core
competency and to improve returns on capital employed.
 To retain the position of single largest trader in the country for product lines
like Minerals, Metals and Precious Metals.
 To render high quality of service to all categories of customers with
professionalism and efficiency.
 To provide support services to the medium and small scale sectors.
 To streamline system within the Company for settlement of commercial
disputes.
 To promote development of trade-related infrastructure.

8
 OBJECTIVE OF THE STUDY

To study the ‘working and functions’ at the finance department of MMTC

To study the nature and scope of regulatory environment of the company.

To know how most of the targets are achieved in the company.

To know how various tasks like, data entry, tender floating, trading, fund management, etc.
are performed in the company.

To know the imports and export procedure followed at MMTC Limited

Moreover, my career-objective is to enter into the corporate world. Keeping in line with my
goal, I wanted to adore myself with professional skills. Thus, I took this opportunity to
acquaint myself with the ‘Working and Functions’ of the finance department.

9
 HoCOMPANY PROFILE

Established in 1963, MMTC is today India's leading international trading company, with

a turnover of over Rs.28000 crores.

It is the first international trading company of India to be given the coveted status

"SUPER STAR TRADING HOUSE" and it is the first Public Sector Enterprise to be

accorded the status of "GOLDEN SUPER STAR TRADING HOUSE" for long standing

contribution to exports.

MMTC is one of the largest non-oil importers in India. MMTC's diverse trade activities

encompass Third Country Trade, Joint Ventures, and Link Deals - all modern day tools

of international trading. Its vast international trade network, which includes a wholly

owned international subsidiary in Singapore, spans more than 85 countries in Asia,

Europe, Africa, Oceania and Americas, giving MMTC global market coverage.

10
INDIA'S LEADING EXPORTER OF MINERALS

MMTC is major global player in the mineral trade and is the single largest exporter of
minerals from India. With its comprehensive infrastructure expertise to handle minerals,
the company provides full logistic support from procurement, quality control to
guaranteed timely deliveries of minerals from different ports, through a wide network of
regional and port offices in India, as well as international subsidiary. MMTC has won the
highest export award from Chemicals and Allied Products Export Promotion Council
(CAPEXIL) as the largest exporter of minerals from India for the eleventh year in a row.

BULLION TRADER IN THE INDIAN SUBCONTINENT THE SINGLE LARGEST

MMTC is the largest importer of gold and silver in the Indian sub continent, handling about 100
MT of gold and 500 MT of silver annually. MMTC has opened a retail jewellery showroom at
Maker Bhawan in Mumbai. MMTC supplies branded hallmarked gold and studded jewellery.
MMTC has also opened a DUTY FREE jewellery store in the Departure Lounge at Sahara
International Airport, Mumbai, India. An assay and hallmarking unit has been set up at New
Delhi for testing the purity of gold and gold articles in accordance with the internationally
accepted fire assay method. Besides organizing major jewellery exhibitions abroad, exclusively,
MMTC is keen to set up manufacturing & joint ventures for modern jewellery in association
with leading names in the international jewellery trade as well as marketing. MMTC supplies
gold on loan basis to the bullion traders and jewellers in India at international rate of interest to
help jewellers and artisans to overcome their working capital requirement.

11
THE BIGGEST IMPORTER OF NON FERROUS METALS & INDUSTRIAL RAW
MATERIAL TO INDIA

MMTC is India's largest seller of imported non-ferrous metals viz. copper, aluminum, zinc, lead,
tin and nickel. It also sells imported minor metals like magnesium, antimony, silicon and
mercury, as also industrial raw materials like asbestos and also steel and its products. MMTC
imports quality products conforming to international specifications like ASTM or BSS or LME
approved brands.

Major institutional customers of MMTC in India are accredited with ISO-9002 status. MMTC
sources its metals from empanelled suppliers including producers and traders throughout the
world.

GROWING INTEREST IN AGRO PRODUCTS WORLDWIDE

MMTC is amongst the leading Indian exporters and importers of agro products. The company's
bulk exports include commodities such as rice, wheat, wheat flour, Soya meal, pulses, sugar,
processed foods and plantation products like tea, coffee, jute etc. Recently the company has also
started trading on commodity exchanges where various agro commodities like paddy, sugar &
soya oil is traded.

12
GENERAL TRADING

MMTC also handles items like textiles, Mulberry raw silk, building materials, marine products,
chemicals, drugs and pharmaceuticals, processed foods, hydro carbons, coal and coke, gold &
silver etc. Information on above can be supplied on request. MMTC also exports engineering
products.

AN INTEGRATED GLOBAL TRADER WITH BULK HANDLING CAPABILITIES

Its comprehensive infrastructure for bulk cargo handling, with well-developed arrangements for
rail and road transportation, warehousing, port and shipping, operations, gives MMTC complete
control over trade logistics, both for exports and imports. The company's countrywide domestic
network is spread over 85 regional, sub-regional, port and field offices, warehouses and
procurement centers.

BROADBASED ACTIVITIES BEYOND TRADING

MMTC's progress in the recent past has taken it from monopoly status to a competitive open
market player making a strong thrust towards broad basing its sphere of activities, while
consolidating its core areas of business.

To create synergy between its manufacturing, trading and technology partners and to
bring optimum efficiency and expertise to its operations worldwide, MMTC has
promoted along with government of Orissa, a million tones capacity Iron & Steel plant
and a 0.8 million tone capacity Coke Oven battery with by product recovery plant and a
captive power plant of 55 MW capacity.

13
SUPPORT SERVICES

MMTC lays emphasis on human resources development and related activities. Several
training programmes are conducted to upgrade managerial skills in the latest
developments in trade management, export marketing, general management.

COMPUTERIZATION

MMTC has a Systems & ERP Division comprising a highly professional team to cope with the
highly competitive environment. MMTC's operational offices are all equipped with modern
computing tools.

SOCIAL AND WELFARE ACTIVITIES

MMTC's social and welfare activities promote welfare of the employees through various
schemes like sports activities, liberal loan facilities like house building advance,
conveyance loan, house hold loan, marriage advance, etc. It also provides subsidized
canteen facilities, medical treatment, and residential accommodation in some of the
major cities for its employees. It also takes care of employees' families through merit
scholarship, tuition fee reimbursement, etc. The Company is committed towards
environmental upkeepment through forestation in the mining areas, development of
tribal areas and infrastructure development through rail links, port facilities, etc.

14
TRADE PROCEDURES

MMTC Ltd. mainly performs three kinds of trade related transactions.

These are as follows:

 Exports;
 Imports; and
 Borrowings

MMTC Ltd. is involved in the imports of several commodities such as fertilizers, hydrocarbons,
Coal, agricultural products, gemstones, Gold etc. from countries like South Africa, Australia,
Indonesia, Malaysia, Canada, Switzerland, China, Japan etc. Similarly, it also exports products
like minerals, iron ore, agricultural products, jewellery etc. These products are exported to
countries like China, Japan, Korea, Malaysia, Singapore, Vietnam, Indonesia, Kuwait etc. to
meet the export obligations. MMTC Ltd. also involves itself in the short term borrowing of
funds.

Managing risk is a challenging task. Risk Management is a systematic approach in identifying,

analyzing and controlling areas or events with a potential for causing unwanted change. It is
through risk management that risks to any specific program are assessed and systematically
managed to reduce risk to an acceptable level. Risk Management signifies the basic ideology to
identify, analyze, evaluate and treat the different business and financial risks that are frequently
tackled in day to day business operations. Risk is an all-pervasive feature. Risk Management is
the act or practice of controlling risk. It includes risk planning, assessing risk areas, developing
risk-handling options, monitoring risks to determine how risks have changed and documenting
overall risk management programs.

15
MMTC – where opportunities are explored consistently and continuously with dedication and
persistence. The last four decades of MMTC’s dedication has richly rewarded the Company by
placing in its present enviable position of India’s largest international trading house. With annual
business turnover of over US$ 2 billion, MMTC contributes significantly to India’s international
trade by opening export opportunities across the globe for Indian products and sourcing inputs
required by the domestic industry, agriculture and for home consumption.

MMTC is committed to continuously innovate its business operations that support

competitiveness across the larger value chain with models founded on market principles. The
Company’s diverse core competencies provide robust competitive capabilities resulting into
organization’s ability to add value into its product and services.

To adapt effectively to the era of globalization and liberalization, MMTC has been adopting new
and innovative tools of trading for enhancement of productivity and efficiency. Providing end-to-
end logistics, protecting customers from perceivable risks, supplying quick and reliable market
information backed by dependable after sale service through ERP solutions, are some of the
strategic initiatives which have made the Company truly market driven with enhanced customer
satisfaction.

16
 OPERATING AREAS OF MMTC

MMTC Ltd. is involved in the imports of several commodities such as fertilizers, hydrocarbons,
Coal, agricultural products, gemstones, Gold etc. from countries like South Africa, Australia,
Indonesia, Malaysia, Canada, Switzerland, China, and Japan etc. Similarly, it also exports
products like minerals, iron ore, agricultural products, jewellery etc. These products are exported
to countries like China, Japan, Korea, Malaysia, Singapore, Vietnam, Indonesia, Kuwait etc. to
meet the export obligations. MMTC Ltd. also involves itself in the short term borrowing of
funds.

MMTC is amongst the leading Indian exporters and importers of agro products. The
company's bulk exports include commodities such as rice, wheat, wheat flour, Soya
meal, pulses, sugar, processed foods and plantation products like tea, coffee, jute etc.
MMTC also undertakes extensive operations in oilseed extraction, from the
procurement of seeds to the production of de-oiled cakes for export, as well as the
production of edible oil for domestic consumption. It also imports edible oils.

MMTC also handles items like textiles, Mulberry raw silk, building materials, marine
products, chemicals, drugs and pharmaceuticals, processed foods, hydro carbons, coal
and coke, gold & silver etc. Information on above can be supplied on request. MMTC
also exports engineering products.

17
  MINERALS

MMTC is the largest exporter of Minerals and Ores from India exporting Iron Ore,
Manganese Ore, Chrome Ore and Minor Minerals for over four decades. It has
been successfully providing outlets to the various Ores being produced in different
mining regions. With its comprehensive infrastructure, experience and expertise to
handle Minerals, the Company provides end-to-end logistics from procurement,
quality control to timely deliveries from different ports through its wide network of
regional and port offices in India. MMTC holds a unique record of being the
leading minerals exporter from India, securing country’s highest export award
from CAPEXIL for 12 years in a row.

18
  AGRO PRODUCTS

MMTC is India’s leading exporter and importer of Agro Commodities. It exports Wheat, Rice,
Maize, De-oiled Cake etc. and imports items such as Edible oil, Pulses, Raw Sugar etc. The
Company also undertakes domestic marketing of sugar and pulses.

19
  PRECIOUS METALS

MMTC is the largest importer of Gold in India handling near 100 tonnes of Gold
and 500 tones of Silver annually for supplies to bullion dealers as also to small and
medium jewellery manufacturers in India. MMTC also sells branded, hallmarked
Gold and Studded jewellery in the domestic and international markets, through
major jewellery exhibitions, its exclusive jewellery duty free showrooms and retail
outlets. ‘SANCHI’ – MMTC’s brand of Sterling Silverware is sold to customers
through sales counters from its regional offices, franchisees, duty free showrooms,
exhibitions and from various State Emporia. Sanchi is sold online too at
www.indiatimes.com MMTC also imports rough diamonds, other precious and
semi precious stones.

20
  NON-FERROUS METALS & INDUSTRIAL RAW MATERIALS

The Company is India’s single largest importer and distributor of Non-Ferrous

Metals and Industrial Raw Materials such as Copper, Aluminium, Zinc, Lead, Tin,
Nickel, Metal Concentrates, Brass, Magnesium, Antimony, Silicon and Mercury. It
organizes supplies of quality products conforming to international specifications
like ASTM, BSS and also LME approved brands. Deliveries to customers are
executed on high seas, ex-go down or ex-bond basis to suit specific needs. The
Company also provides risk management tools such as future trading and hedging
options through international/national commodity exchanges offering value added
services for the benefit of its customers.

21
 COAL & HYDROCARBONS

MMTC is aggressively pursuing business opportunities in the Coal and

Hydrocarbon sector and is one of the major importers of Low Ash
Metallurgical Coke, Non-Coking (Steam) & Coking Coal, Naphtha,
Superior Kerosene Oil, Furnace Oil, Bitumen, etc. for State Electricity
Boards, Power Plants, Cement & Paper Industry, Coke Oven Batteries,
Fertilizer Units, Steel industry, Foundaries etc. in India. It also has its
captive coke oven battery producing 800000 tonnes of metallurgical coke
annually from imported coal.

22
 FERTILIZERS AND FERTILIZER RAW MATERIALS

A major player in the Fertilizer business, MMTC is one of India’s largest

buyers of finished Fertilizers & Fertilizer Raw Materials like Urea, Muriate
of Potash, Di-Ammonium Phosphate, Sulphur, Rock Phosphate, Phosphoric
Acid etc. with over three decades of fertilizer handling experience. The
Company also undertakes merchanting trade in fertilizers across the borders
and with other countries.

23
STRUCTURE OF FINANCE DEPARTMENT OF MMTC

24
 FUNCTIONS OF THE DIVISIONS OF THE FINANCE
DEPARTMENT

 TRADE DIVISION (Associate Finance)

 Examines the trade proposals.

 Analyzes the risk.
 Mitigates the risk.
 Receivables analysis and follow-up.
 Computes Sales tax, VAT, Service tax, etc.
 Accounting entries related to trade.
 Fund management.
 Ensures that all guidelines are being followed.
 Checks and approves files for payment.
 Approaches the bank for opening of a LC.
 Mitigates foreign exchange risk.
 Makes out the schedules of its division.
 Arranges finance for imports/purchases.
 Accountable for price realization.
 Answerable to auditing parties.

 SERVICE DIVISION (Associate Finance)

 Prepares salary vouchers for the employees.

 Provides monetary benefits to the employees.
 Provides loans to the employees.
 Loan monitoring and recovery.
 Maintains records of the post-retirement benefits of the employees.
 Deduction and remittance of PPF.
 Provides for TDS, income tax return of the employees.

25
 ADMINISTRATIVE DIVISION(Associate Finance)

 PAYMENTS

 Rent, rates, taxes, lighting, heating, insurance, general expenses,

printing, stationery, repairs, renewals, telephone, accountancy fees,
legal charges, audit fees, advertisement, postage, travelling expenses,
entertainment, magazines, training of employees, consultancy fees,
bank charges and commission, miscellaneous expenses, etc.

 RECEIPTS

 Recoveries from employees, incidental income, gains, rebates,

commission received, rent received, bank interest received, interest on
investments, miscellaneous incomes, etc.

 CENTRAL ACCOUNTS DIVISION (Associate Finance)

 Prepares information reports by collecting financial data.

 Audits the financial statements.
 Maintains the Accounting books of the Company.
 Computes the Corporate tax liability.
 Records financial data through Management Information System (MIS).
 Prepares quarterly results.
 Coordinates with the Board of Directors.
 Answerable to auditing parties.

26
 FINANCIAL STATEMENTS OF MMTC LTD.

FINANCIAL STATEMENTS
FOR
THE FINANCIAL YEAR ENDED 31ST MARCH, 2012 -2013

27
 BALANCE SHEET OF MMTC LIMITED 2011-12
.

(in crores)

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 100.00 100.00 50.00 50.00 50.00

Equity Share Capital 100.00 100.00 50.00 50.00 50.00

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 1,321.40 1,279.74 1,237.15 1,073.38 979.96

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 1,421.40 1,379.74 1,287.15 1,123.38 1,029.96

Secured Loans 3,429.87 5,001.99 4,614.36 4,305.20 3,198.35

Unsecured Loans 0.00 1,081.48 550.44 0.00 3.28

Total Debt 3,429.87 6,083.47 5,164.80 4,305.20 3,201.63

Total Liabilities 4,851.27 7,463.21 6,451.95 5,428.58 4,231.59

Application Of Funds

Gross Block 202.38 207.44 206.41 202.64 202.49

Less: Accum. Depreciation 105.12 96.59 84.67 75.73 62.65

28
Net Block 97.26 110.85 121.74 126.91 139.84

Capital Work in Progress 0.00 0.51 0.72 4.89 4.16

Investments 467.29 283.09 272.91 231.54 254.97

Inventories 924.40 647.97 2,134.83 578.53 553.21

Sundry Debtors 2,770.61 2,556.25 1,583.33 1,929.64 1,490.72

Cash and Bank Balance 2,853.12 303.34 336.59 95.50 367.77

Total Current Assets 6,548.13 3,507.56 4,054.75 2,603.67 2,411.70

Loans and Advances 5,630.06 2,384.52 1,668.56 1,905.58 652.95

Fixed Deposits 0.00 6,444.89 5,744.17 5,762.50 5,584.27

Total CA, Loans & Advances 12,178.19 12,336.97 11,467.48 10,271.75 8,648.92

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 7,541.75 4,868.22 5,020.64 4,860.28 4,527.13

Provisions 349.72 400.00 390.27 352.05 291.40

Total CL & Provisions 7,891.47 5,268.22 5,410.91 5,212.33 4,818.53

Net Current Assets 4,286.72 7,068.75 6,056.57 5,059.42 3,830.39

Miscellaneous Expenses 0.00 0.00 0.00 5.83 2.25

Total Assets 4,851.27 7,463.20 6,451.94 5,428.59 4,231.61

Contingent Liabilities 1,759.19 1,755.43 1,747.98 1,719.02 1,200.38

Book Value (Rs) 14.21 13.80 257.43 224.68 205.99

Financial statements are the end product of an accounting process which starts with identification
of accounting information and recording thereof in the books of primary entry. They are

29
prepared following the accounting concepts and principles. Financial statements are historical in
nature.

Financial statements are the summarized statements of accounting data produced at the end of
the accounting process by an enterprise through which it communicates the accounting
information to the internal (management) and the external users. The external users can be
investors, lenders, suppliers and trade creditors, customers, government and their agencies and
employees. Customarily, a set of financial statements includes

 Balance Sheet ( Position Statements)

 Profit & Loss Account ( Income Statements)
 Schedules & Notes to accounts

The financial statements are prepared according to the historical cost convention on accrual basis
and in line with the fundamental accounting principles or prudence, consistency and materiality.
The financial statements are reported in Indian Rupee and all values are rounded to the nearest
million unless otherwise stated.

The financial statements are prepared on the basis generally accepted accounting principles in
India, accounting standards issued by THE Institute of Chartered Accountants of India and the
provisions of the Companies Act 1956, as amended time to time. Purchases and sales are booked
where the company has entered into purchase/sale, contract/agreement with the sellers/buyers or
received allocation letter from the Government on performance of the contract/agreement
/allocation either wholly or partially.

Revenue is recognized on the accrual basis and accounted on actual realization since reliability
of such items is uncertain in accordance with the provisions of AS – 9 issued by ICAI.

All Fixed assets are stated at historical cost less accumulated depreciation and any impairment in
value.

30
Depreciation is charged on straight line method at the rates approved by the Board of directors,
which are equal to or higher than those provided under schedule XIV of the Companies Act,
1956. Depreciation on assets acquired/disposed during the year is provided from/upto the month
the asset is disposed/acquired.

Analysis of Financial statements is a systematic process of the critical examination of the

financial information contained in the financial statements in order to understand and make
decisions regarding the operations of the firm.

Several Tools & Techniques are used in analyzing the financial statements which are as follows.

 Comparative Financial Statements

 Common – size Financial Statements
 Trend percentages
 Ratio Analysis
 Funds Flow Statements
 Cash Flow Statements

Among all these tools & techniques Ratio Analysis is one of the most used tools for preparing
the Financial Statements. A ratio is an arithmetical expression of relationship between two
related or interrelated items, when calculated on the basis of accounting information are called
accounting ratios.

Ratio Analysis is a technique of analyzing the financial statements by computing ratios. Ratios
are regarded as a test of earning capacity, financial soundness and operating efficiency of
business organization. The use of ratios in accounting and financial management to the
profitability, financial position (liquidity & Solvency) and operating efficiency of an enterprise.

The accounting ratios are classified into four categories, which are as follows.

 Liquidity Ratios(short term solvency)

 Solvency Ratios (long term solvency)
 Activity Ratios
 Profitability Ratios

PERFORMANCE AT A GLANCE

31
For the financial year ending 2012 2011 2010 (Rs. in
31st March million)

Total Sales 659291 688545 451242

Exports 20454 36934 32228
Imports 610417 633008 399690
Domestic 28420 18603 19324
Trading Profit 2766 3300 3176
Income from Other Sources 7284 5104 6639
Profit after Tax 707 1216 2162

Total Assets 127427 127098 118394

Net Worth 14213 13797 12871
Earnings Per Share (Rupees) 0.71 1.22 43.25
Dividend 0.25 0.25 9.00
Net Worth to Share Capital 14.2 13.8 25.7
(times)
Profit after Tax to Capital 7.9 14.1 21.8
Employed (%)
Profit after Tax to Net Worth (%) 4.97 8.81 16.8
Sales per Employee (Rs. 394.1 389.7 245.5
Millions)

WORKING AT MMTC

32
IMPORT PROCEDURE FOLLOWED AT MMTC

33
 PURCHASE ORDER

BUYER SHIPMENT SELLER

BANK DOCUMENTS BANK

PAYMENTS

Steps PARTICULARS Yes/No/NA

1 Requirement from the customers

2 Licence

3 Tender for sourcing the material

4 Evaluation of the tenders

34
5 Bid bond from the suppliers

6 Confirmation of bid bond

7 Selecting the bidders in sequence

8 Approval of higher authorities

9 Taking necessary internal approval for offering the material

10 Offer to the buyers

11 Acceptance from the buyers

12 Internal approval for issuing LOI

13 LOI on the suppliers

14 PG from suppliers

15 Waiver from Transchart for CFR shipment

16 Necessary approval for finalizing contract with suppliers and

buyers

17 Contract with the suppliers

18 Contract with the buyers

19 Financial arrangement from the buyers

20 Confirmation of BG

21 Opening of the Letter of Credit on the suppliers

22 Nomination of vessel to buyers

23 Acceptance of vessel from the buyers

24 Communicating the acceptance of the vessel to the suppliers

25 Appointing inspection agency at discharge port

26 Inspection at load port

27 Monitoring loading operations

28 Receiving photocopies of the shipping documents

29 Receipt of funds from the buyers as per terms of contract

35
30 Arrangement for remittance as per the terms of the contract to
suppliers

31 Receipt of duly endorsed shipping documents form bank/supplier

and forwardimg the same to concerned RO

32 ROs to forward the original documents to customers after

confirmation of receipt of payment

33 Coordination with Ros for final invoicing

34 Discharge port draft survey report

35 Receipt of laytime calculation

36 Settling laytime calculation with the buyers and suppliers

37 Settlement of bills received from handling agents, inspection

agencies

38 Returning performance guarantee of the supplier

39 Proper entries in the respective modules of ERP systems

40 Proper filing of TDS & Sales tax returns

EXPORT PROCEDURE FOLLOWED AT MMTC

PURCHASE ORDER

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SELLER SHIPMENT BUYER

BANK DOCUMENTS BANK

PAYMENTS

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Steps PARTICULARS Yes/No/NA

1 Receipt of enquiry from prospective buyer/ Issue of tender for export

2 Sending Quotations (Performa invoice).

3 Receipt of order (indent).

4 Assessing importer’s credit worthiness.

5 Entering into contract (FOB , C&F, CIF, CPT, CIP, FAS)

6 Obtaining a guarantee for payments (Letter of credit).

7 An export license is required.

8 Obtaining pre-shipment finance.

9 Procurement of goods.

10 Pre-shipment inspection.

11 Excise clearance.

12 Obtaining certificate of origin.

13 Declaration that the goods are nor hazardious

14 Reservation of shipping space.

15 Packing and forwarding.

16 Insurance of goods.

17 Customs clearance (Shipping bill).

18 Obtaining mates receipt.

19 No dead freight / No damages certificate

20 Weight Certificate

21 Quality certificate

22 Draft survey Certificate

23 Shut out Certificate

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24 Short Shipment Notice

25 Shipping advice to buyer

26 Payment of freight and issuance of bill of lading.

27 Preparation of invoice.

28 Securing payment.

29 Settlement of post shipment claims like dispatch / demurrage with

Charterer / Carrier

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MAJOR DOCUMENTS IN IMPORT/EXPORT

LETTER OF CREDIT

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42
43
44
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BILL OF LADING:

A document issued by a carrier (railroad, steamship or trucking company) which serves as a

receipt for the goods to be delivered to a designated person or to his order. The bill of lading
describes the conditions under which the goods are accepted by the carrier and details that nature
and quantity of the goods, name of vessel (if shipped by sea), identifying marks and numbers,
destination, etc. The person sending the goods is the “shipper” or “consignor”, the company or
agent transporting the goods is the “carrier” and “and the person for whom the goods are
destined is the “consignee”. Bills of lading may be negotiable or non-negotiable. If negotiable,
i.e., payable to the shipper’s order and properly endorsed, title of the goods passes upon delivery
of the bill of lading.

LETTER OF CREDIT:

It’s a media that protects both parties so that seller can get guarantee and if the buyer is not
making advance payments. L/C is issued by the buyer’s bank after the deal has been finalized in
favor of seller’s bank (name of the seller as specified). It’s a bank-to-bank transaction. L/C is a
negotiable instrument i.e. the seller can get his payment from any bank and anywhere in his
country. It may be revocable or irrevocable document. An irrevocable L/C provides guarantee
by the issuing bank in the event that all terms and conditions are met by the buyer of the goods
(or drawee). A revocable L/C can be cancelled or altered by the drawee after it has been issued
by the drawee’s bank. A confirmed L/C is one issued by a bank which is validated or guaranteed
by another bank.

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BANK GUARANTEE:

A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary. Unlike a line

of credit, the sum is only paid if the opposing party does not fulfill the stipulated obligations

under the contract. This can be used to essentially insure a buyer or seller from loss or damage

due to nonperformance by the other party in a contract. A bank guarantee might be used when a

buyer obtains goods from a seller then runs into  cash flow difficulties and can't pay the seller. The

bank guarantee would pay an agreed-upon sum to the seller. Similarly, if the supplier was

unable to provide the goods, the bank would then pay the purchaser the agreed-upon sum.

Essentially, the bank guarantee acts as a safety measure for the opposing party in the

transaction.

CERTIFICATE OF ORIGIN: 

A Certificate of Origin (often abbreviated to C/O or COO) is a document used in international

trade. It is a printed form, completed by the exporter or its agent and certified by an issuing body,

attesting that the goods in a particular export shipment have been wholly produced,

manufactured or processed in a particular country.

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Some other documents are also needed while export/import any commodity like:

Health certificate.

No beef fat/animal fat certificate.

Quality/quantity check certificate issued by he surveyor.

Certificate of weight issued by the independent surveyor.

Stowage certificate issued by the independent surveyor at load port.

Certificate regarding the classification of the vessel.

All these documents are provide as original and 3 copies of each should be provided as per
contract

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 MY EXPERIENCE

I had a wonderful experience being to a Public Sector Undertaking (MMTC

LTD.). From the time of submission of the application form till the time of the
completion of the training, it was absolute fun and a learning experience as
well.

I learnt the way how most of the objectives are accomplished at a PSU. I got to
know how various tasks like, data entry, tender floating, trading, fund
management, etc. are performed in a company.

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 MY VIEWS ON MMTC

 I believe that 10 years hence, MMTC will emerge as one of the Major Ratnas among
Indian PSUs.

 It will become new, energetic and more vibrant by 2020.

 For this to be achieved, the employees need to be more efficient, and moreover the use of
IT should be increased in every department and every division.

 The major challenge that MMTC faces is to recreate, rejuvenate and present itself as a
relevant global trading organization in the current scenario. It needs to change its product
profile by adding various products like, building material, engineering goods,
security/medical equipment, timber, textile, raw silk, yarn, etc.

 The work culture of MMTC should be cultivated in such a way, by offering perquisites,
bonus, and increasing accountability & responsibility of the employees, and by
delegating the authority, so that the Company achieves quicker and better results.

 The Company should not remain dependent only on its core product, i.e. Minerals;
instead it should explore newer opportunities from its product line, maybe Fertilizers.

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 BIBLIOGRAPHY

 www.mmtclimited.com
 MMTC 49th Annual Report 2011-2012.
 MMTC’s magazine ‘Exploring Possibilities’.
 MMTC’s magazine ‘Spectrum’
 www.google.com
 www.wikipedia.com
 https://www.mmtc.eproc.in
 www.mmtcretail.com

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