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State Trading Corporation of India Ltd.

BSE: 512531 Sector: Others
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OPEN 120.00
VOLUME 29178
52-Week high 138.75
52-Week low 44.75
Mkt Cap.(Rs cr) 723
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 120.00
CLOSE 119.35
VOLUME 29178
52-Week high 138.75
52-Week low 44.75
Mkt Cap.(Rs cr) 723
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

State Trading Corporation of India Ltd. (STCINDIA) - Director Report

Company director report

The Board of Directors presents the 62nd Annual Report on the business and operationsof the Company and its Audited Statement of Accounts for the year ended March 31 2018together with the Auditors' Report and Comments on the Accounts by the Comptroller andAuditor General (CAG) of India.


The performance of the Company during the year 2017-18 vis--vis the previous year issummarized in the table below:

( Rs. Crore)
2017-18 2016-17
Exports 266 789
Imports 10216 6382
Domestic 343 581
Grand Total 10825 7752
Profit Before Tax 32 (-)150
Profit After Tax 38 (-)166
Net Worth (incl. revaluation reserves) 931 890


During 2017-18 your company recorded a business turnover of Rs.10825 crores as againstRs.7752 crores achieved in 2016-17. The increase in turnover was mainly due tohigher bullion sales.


In view of the crisis faced by company on account of current liquidity crunch low networth higher borrowing costs and the consequential need to conserve cash the Board ofDirectors have not recommended any dividend for the year 2017-18.


An amount of Rs.830.15 crore (excluding revaluation reserves of Rs.884.60 crore) wasavailable in the Reserves and Surplus of the Company as on 1st April 2017. An amount ofRs.40.67 crore (PAT: Rs.37.52 crore and other comprehensive income: Rs.3.15 crore) isbeing retained as surplus in the Balance Sheet. Accordingly as on 31st March 2018 theequity capital stood at Rs.870.81 crore.


STC had 591 employees on its rolls as on 31.03.2018 which included 402 officers and189 staff members. During the year the Company recruited 3 Finance Professionals in theexecutive cadre.

Industrial Relations

During the year 2017-18 the company continued to maintain cordial harmoniousindustrial relations. No man-days were lost due to any labour unrest. Personnel policiesand welfare schemes were suitably improved / amended so as to bring them in line with theoverall business interests of the Company.

Recruitment of SC/ST/OBC/PWD

The Company has been following the Government of India policy forreservation/recruitment for SCs/STs/OBCs and PWD.

Employees' Learning & Development

With a view to enable employees to fulfil their potential and help them in their careerprogression domain specific training opportunities and behavioural programmes wereorganized. During the year around 206 employees were imparted training in differentspheres. Besides a six day induction training programme for recently recruited executiveswas organised at IIFT New Delhi wherein 29 executives participated.

In all 235 employees were imparted training during the year wherein 486 man-days werededicated.

STC'S performance in terms of MOU 2017-18 with respect to HRM Parameters:

One of the HRM parameters for MoU 2017-18 was for holding DPC without delay forexecutives (E0 and above level) which was successfully completed as all DPCs from E1 toE8 level were held without delay in 2017-18.

Another HRM parameter was preparation of succession plan and its approval by Board ofDirectors before 31.12.2017. The Succession Plan of the Corporation was successfullyprepared and approved by Board of Directors in its 617th meeting held on 13.12.2018.

With a view to develop a robust and transparent

Performance Management System (PMS) as part of MoU target for the year 2017-18 onlinePMS has been introduced and has been successfully implemented in the Corporation inrespect of all executives (E1-E8) within prescribed timelines w.e.f. 08.02.2018 incompliance of MoU 2017-18 target.

A week long (six day) Management Development Programme on "InternationalBusiness" was conducted from March 12-17 2018 for further enhancing/ upgrading theskills of 29 newly recruited executives (i.e. 7.21% of the total executives) through IIFTNew Delhi a Centre of Excellence set up in 1963 by Govt. of India as an Autonomousorganization.


The Company has been making continuous efforts in implementation of official languagepolicy of the Govt. of India. In order to achieve the targets employees have been giventraining on working in Hindi on computers. Besides they are provided necessaryinformation on various aspects of official language through regular workshops conducted inHindi. Raj Bhasha Fortnight was organised during September 2017 in which employees weremotivated towards use of official language Hindi through various Hindi competitions /programmes. On the occasion of Hindi Divas on 14th September 2017 winners of HindiCompetitions were given awards. In addition employees contributing significantly to theexecution of official language Hindi were given cash prizes under Official LanguageEncouragement Scheme. Divisions and Branch offices performing outstanding in the area ofexecution of official language were facilitated with

Raj Bhasha Shield.


Vigilance plays a vital role in the adoption and implementation of best practices ofCorporate Governance and ethics in the Company. During the year Vigilance Division of theCompany played an important role in sensitizing the employees about the preventive actionto be taken while handling trade proposals and took measures to improve the existingsystem and processes.

Steps were also taken for systemic improvement in the areas of record managementdefining of the role and responsibility of executives and scrutiny of APRs etc. Regularand surprise checks were conducted in addition to 7 CTE type inspections to check properimplementation of STC's trade guidelines.

Vigilance team also carried out detailed inspection of Chennai Branch during August2017. Remedial measures were taken to expedite timely completion of investigations anddisciplinary proceedings.

The Company observed Vigilance Awareness Week 2017 from 30th October to 4th November2017 at Corporate Office and Branch Offices. The theme of the Vigilance

Awareness Week was "My Vision- Corruption Free India".

Laying stress for creation of awareness on the ill effects of corruption amongst schooland college students various outreach activities viz. quiz competitionsdebates/elocution were also conducted. Three training programmes on ‘VigilanceClearance' ‘Role & responsibility of PO' and ‘Role of Employees inmaintaining integrity in the Organisation' were organised for the executives of theCorporation during the year 2017-18. With a view to create awareness about the rules andprocedures of the Company and about new developments taking place in the area of vigilanceadministration Vigilance

Division issued a quarterly e-newsletter "NAI DISHA"

During the year 2017-18 a total of 9 cases have been disposed off and action onremaining 22 cases is in progress as on 31.03.2018.

PERFORMANCE OF SUBSIDIARY COMPANY STCL Ltd. (Formerly Spices Trading Company Limited)

In view of extraordinary losses suffered by STCL leading to erosion of its net worthand keeping in view the remote possibility of its turnaround the Union Cabinet had inAugust 2013 decided to wind up STCL. Accordingly a winding up petition was filed by STCLbefore the Hon'ble High Court of Karnataka and the same continues to be pending due toobjections by Banks.

At present STCL has 11 employees on its rolls. Due to above developments no businessoperations were undertaken by STCL during the year.

The company incurred a loss of 657 crore (unaudited) during 2017-18 mainly on accountof the interest accrued on outstanding loans and had a negative net worth of 4562 crore(unaudited) as on 31.03.2018.


As per the requirement of Regulation 34(2) of schedule V of the SEBI (ListingObligation and Disclosure Requirements) Regulation 2015 a detailed Management Discussionand Analysis Report forming part of the Annual Report of the Company is placed atAnnexure-I.


As required under Section 134(3) (a) of the Companies Act 2013 an extract of theAnnual Return pursuant to Section 92(3) of the Act is annexed to this Report atAnnexure-II.


The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)

Act 2013. An Internal Complaints Committee is set up to redress complaints received inthis regard. All employees (permanent contractual temporary trainees) are covered underthis policy. During the year two complaints of sexual harassment were received. While onecomplaint has been disposed off in the financial year 2018-19 the interim report of thesecond complaint has been submitted to the Disciplinary Authority.


In order to promote transparency and accountability an appropriate mechanism is inplace in the Company to provide information to citizens under the provisions of Right toInformation (RTI) Act 2005.


The Company has not accepted any deposits from Public. Therefore the requirement ofChapter V of the Companies Act 2013 is not applicable to it. There were no outstandingpublic deposits pending as on 01.04.2017 .


During the year the company has not provided/given any loans guarantees or made anyinvestment as specified under section 186 of the Companies Act 2013.


The company has not entered into any contracts or arrangements with related parties asreferred to in subsection (1) of section 188 of the Companies Act 2013. All transactionsentered by the company with related parties were in the ordinary course of business andnot at Arm's length basis.


As per DPE guidelines & provisions of Companies Act 2013 the budgetary allocationof CSR is based on the profitability of the company. During the year 2016-17 the Companyincurred a loss of Rs.150 crore and average net profit of immediately preceding last threefinancial years was negative. Thus no budget allocation was made for CSR during the year2017-18 as per CSR Rules. An amount of Rs.15.11 lakh accrued from previous years wascarried forward in the year 2017-18 out of which an amount of Rs.13.60 lakh wascontributed to "Swacch

Bharat Kosh" and an amount of Rs.0.75 lakh was allocated to "CapacityBuilding" projects Another Rs.0.75 lakh was kept for contribution to Emergency Needshowever the amount could not be utilized as need did not arise. This amount will becarried forward in the next year 2018-19 for the same purpose and it will be utilized asand when need arises. An annual report on Company's CSR activities in prescribed format asper the Companies (Corporate Social Responsibility Policy) Rules 2014 is placed atAnnexure –III.


In pursuance of the Public Procurement Policy for Micro & Small Enterprises (MSEs)Order 2012 notified by Ministry of Micro Small and Medium Enterprises vide their Orderdated 23rd March 2012 the Company had set an annual target of making a minimum 20 percentof its annual procurement of goods and services from MSEs including 4 percent from MSEsowned by SC or ST entrepreneurs. During the year 2017-18 the Company made procurementworth Rs.1.93 crore from MSEs which accounted for 54% percent of total value of annualprocurement made by STC of goods produced and services rendered by MSEs as against 20%target specified in the guidelines. Out of this procurement from SC/ST entrepreneur stoodat Rs.0.31 lakh i.e 16% as against a sub-target of 4%.

During the year 2018-19 also the Company shall strive to achieve the annualprocurement target of 20 percent of goods and services produced/rendered by MSEsincluding 4 percent from MSEs owned by SC or ST entrepreneur.


The information required to be disclosed in accordance with the Companies (Accounts)Rules 2015 is ‘nil' as the Company is mainly engaged in trading activities.


The Financial Statements have been prepared in accordance with the Generally AcceptedAccounting Principles (GAAP) and in compliance with all applicable Indian AccountingStandards (Ind-AS) issued by The Institute of Chartered Accountants of India (ICAI) andnotified by the Ministry of Corporate Affairs vide notification dated 16.02.2015 andCompanies Indian Accounting Standards Rules 2015. These Indian Accounting Standard(Ind-AS) are applicable to the Company with effect from 01.04.2017 with transition date01.04.2016. Accordingly these financial statements for the year ended 31.03.2018 arefirst financial statements prepared by the Company in accordance with Ind-AS. The figuresof previous year ended 31.03.2017 and figures of transition date i.e. 01.04.2016 have beenre-stated as per the requirements of Ind-AS to make comparable and Ind-AS complied.

Considering the above requirements the company has implemented Ind-AS during thefinancial year 2017-18 with the transition date being 01.04.2016. Detailed disclosuresregarding first time adoption of Indian Accounting Standard transition from IGAAP toInd-AS and reconciliation of equity and assets is given at Note no.36 of the financialstatements. Further as per Ministry of Corporate Affairs (MCA) notification thefinancial statements have been prepared as per the format prescribed under the scheduleIII (Division II) of the Companies Act 2013.


The Company has in place well-established internal financial controls. The Company hasa well-defined Delegation of Powers (DOP) which lays down the financial powers availableto various levels of company's executives. The DOP helps facilitate faster and prudentcommercial decision-making by executives at various levels. During the year the DOP wassuitably amended from time to time to match accountability with authority considering theprevailing requirements. The Company has an Internal Audit Division supported by anoutside professional Chartered Accountant firm which conducts internal audit of company'scorporate office as well as branches and suggests various preventive and corrective steps.The audit observations are periodically reviewed by the Management Audit Committee and theAudit Committee of the Board of Directors issues necessary directions wherever required.


During the financial year 2017-18 nine meetings of the Board of Directors were heldand the interval between any two Board meetings did not exceed 120 days.


All the Part-time Non-official Directors (Independent Directors) have affirmed thatthey meet the criteria of Independence as provided in Section 149(6) of the Companies Act2013 for the financial year ending 31.03.2018


STC being a Government company all members of the Board are appointed by the Presidentof India through Administrative Ministry i.e. Ministry of Commerce & Industry Govt.of India which inter-alia fixes the remuneration through their respective appointmentorders/pay fixation orders. The non-executive part-time official Directors (Governmentnominees) are not entitled for any remuneration or sitting fee on monthly basis. Thepart-time non-official (Independent) Directors are paid sitting fee for each Board /Committee meetings attended by them at the rate as per provisions of the Companies Act2013 and as approved by the Board from time to time. The eligibility criterion forappointment of Independent Directors is laid down by the Department of Public EnterprisesGovt of India. The positive attributes expected to be exhibited by the IndependentDirectors are conveyed to them on their appointment and a declaration in the appropriateperforma is obtained from them every year to confirm that they continue to qualify asIndependent Director


The Companies Act 2013 provides exemption to the Government Companies with respect toevaluation of Board and its Directors. However evaluations of the directors are done byadministrative ministry. The performance of the Company and Board of Directors areevaluated by the Department of Public Enterprises vis-a-vis MOU entered into with theGovernment of India.


A Board approved Risk Management Framework has been put in place to add objectivity tothe process of risk management while taking a decision on accepting or rejecting a tradeproposal. The Risk Management Framework measures the various risk involved in a businessproposal in the form of a total risk score which is weighed vis-a-vis available riskmitigation measures.

Further the company has implemented an Anti-Fraud Policy in order to control and tohelp in prevention and detection of frauds in the Company. The Policy intends to promoteconsistent legal and ethical organizational behaviour by assigning responsibility for thedevelopment of controls and providing guidelines for reporting and conduct ofinvestigations of suspected fraudulent behaviour.


The Company does not take exposure in volatile commodities/ market condition.Generally it makes purchases only against confirmed orders backed by appropriate marginmoney by way of EMD.

Guidelines are in place requiring forward foreign exchange cover to be taken in respectof transactions involving STC funds.


The Company believes that Corporate Governance is at the root of the shareholders'value creation. Pursuant to SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Guidelines on Corporate Governance for CPSEs issued by theDepartment of Public Enterprises (DPE) Govt of India a Report on Corporate Governancefor the year 2017-18 forming part of this report is placed at Annexure-IV. The Company hascomplied with the conditions of Corporate Governance as stipulated in the above referredRegulations and DPE guidelines on Corporate Governance for CPSEs. Compliance certificatefrom the practicing Company Secretary in this regard and Management replies theretoforming part of this Report are placed at Annexure -V.

The Company has got its Secretarial Audit for the financial year ended 31st March 2018conducted by practicing Company Secretaries M/s P.C. Jain & Co. and their report alongwith Management replies to the observations made by Secretarial Auditors forming part ofthis Annual Report is placed at Annexure -VI.

In line with the best practices your Company has made available all information ofinterest to its investors on the Company's Corporate website namely Company has also put in place various policies such as:

Whistle Blower Policy

Web Archival Policy

Policy on Preservation of Documents

Policy on Materiality of Related Party Transactions and dealings with Related PartyTransactions

Policy for determination of materiality of events and information and theirdisclosures.

Policy for determining material subsidiaries.

The above policies are also available on STC's website. The separate meeting ofIndependent Directors were held on 28.11.2017 and 20.03.2018 at the registered office ofthe Company.


M/s P. Jain & Company Chartered Accountants were appointed as Statutory Auditorsof the company for the financial year 2017-18 by the Comptroller & Auditor General ofIndia (C&AG). Their report along with replies of the Management is attached andforms part of this report.


The comments of C&AG under Section 143(6) of the Companies Act 2013 on theaccounts of the Corporation for the year 2017-18 and replies of the management thereto areattached and form part of this Report.


Pursuant to the provisions of Section 134(5) of the Companies Act 2013 in relation toDirectors' Responsibility Statement it is hereby confirmed that: (a) in the preparationof the annual accounts for the year ended 31st March 2018 the applicable IndianAccounting Standards (Ind-AS) have been followed along with proper explanation relating tomaterial departures; (b) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for the year 2017-18;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; (d) the Directors have prepared the annual accounts on a going concernbasis for the year ended 31st March 2018; (e) the Directors have laid down internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and operating effectively; and (f) the Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems areadequate and operating effectively.



Since the last Annual General Meeting Shri Sunil Kumar Additional SecretaryDepartment of Commerce Ministry of Commerce & Industry Govt. of India was appointedas Part Time Official Director on the Board of STC w.e.f. 21.10.2017 pursuant to OfficeOrder dated 28.09.2017 issued by the Government of India Ministry of Commerce &Industry Department of Commerce and as per provisions of the Companies Act 2013Pursuant to Order dated 28.12.2017 of Government of India Ministry of Commerce &Industry Department of Commerce and as per provisions of the Companies Act 2013 Shri

Umesh Sharma (holding DIN 03298909) Director (Finance)

MMTC was assigned the charge of Director (Finance) STC in addition to his existingcharge. Accordingly Sh. Umesh

Sharma assumed the charge of Director (Finance) STC w.e.f. 04.01.2018. Shri S.C. PandeySpecial Secretary & Financial Advisor Department of Commerce and Ministry ofCommerce & Industry was appointed as Part time Official Director on the Board of STCPursuant to Office Order dated 16.03.2018 issued by the Government of India Ministry ofCommerce & Industry Department of Commerce and as per provisions of the CompaniesAct 2013 w.e.f. 27.03.2018.

As per Section 161 other applicable provisions of the Companies Act 2013 and Article79(4) of the Articles of Association of the Company these Directors will hold office upto the next Annual General Meeting of the Company and are eligible for appointment by theCompany at that meeting as a Director.

The Board welcomes all the new Directors and hopes that the Company shall immenselybenefit from their rich and varied experience.

Pursuant to the provisions of Section 152 of the Companies Act 2013 Shri S.K. SharmaDirector (Personnel) and Shri P. K. Das Director (Marketing) shall retire by rotation atthe ensuing Annual General Meeting and being eligible have offered themselves forre-appointment.

As per Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a brief resume of all Directors seeking appointment/re-appointment aregiven in the notice convening the 62nd Annual General Meeting of the Company.


Shri Inder Jit Singh AS DoC who was appointed as Director w.e.f. 10.11.2016 ceasedto be Director pursuant to Office Order dated 28.09.2017 issued by the Government ofIndia Ministry of Commerce & Industry Department of Commerce. Sh. Jitendra KumarDadoo AS&FA DoC who was appointed as Director w.e.f. 06.08.2015 ceased to beDirector pursuant to Office Order dated 16.03.2018 issued by the Government of IndiaMinistry of Commerce & Industry Department of Commerce.

The Board appreciates the efforts and valuable contributions put in and guidanceprovided by Shri Inder Jit Singh and Shri J.K. Dadoo during their tenure asMembers of the Board of STC.


The Company has nominated its CMD all Functional Directors and Company Secretary asKey Management Personnel pursuant to Section 203 of the Companies Act 2013.


Pursuant to the provisions of various Sections of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors of the Company have constituted various Committees of Directors like AuditCommittee Stakeholders Committee Relationship Committee CSR Committee Nomination &Remuneration Committee. The composition of these committees & other details arementioned in the Corporate Governance Report forming part of and annexed to the Directors'Report


Pursuant to the requirements of Schedule V of the SEBI (Listing Obligation andDisclosure Requirements) Regulation 2015 and DPE guidelines on Corporate Governance forCPSEs the Board Members and Senior Management Personnel have affirmed compliance to theCode of Conduct for the financial year ending 31st March 2018.


The Board of Directors would like to acknowledge and place on record its sincereappreciation of the continued patronage and the confidence posed by business associatesand customers during the year.

The Board expresses and places on record its gratitude for the continued co-operationand support provided by the Ministry of Commerce and Industry other Ministries andDepartments of the Government of India various state governments financial institutionsbanks railways ports regulatory and statutory authorities shareholders legal advisersand consultants from time to time.

The Board also acknowledges the constructive suggestions received from Comptroller& Auditor General of India Statutory Auditors and Internal Auditors. Last but not theleast the Board places on records its appreciation for the hard work and dedication ofall the employees of the Company.

For and on behalf of the Board of Directors
(Rajiv Chopra)
Chairman & Managing Director
(Additional Charge)
DIN 06466326
New Delhi
Date: 10th August 2018