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Notes to Accounts of State Trading Corporation Of India Ltd.

Mar 31, 2016

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2. REVENUE RECOGNITION - INCOME/EXPENSES

Income and expenses are accounted for on accrual basis except the following which are recognised on cash basis:

a) Claims for refund of excess insurance premium on open policies.

b) Interest on loans to subsidiaries and on delayed payments of sales/ trade finance where realization is doubtful.

c) Export benefits.

d) Interest realisable from the items handled on Government account.

e) Dividend on investments.

f) Liquidated damages.

g) Claims lodged with Insurance Companies.

3. USE OF ESTIMATES

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

4. TRANSACTIONS IN FOREIGN CURRENCIES

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) All monetary items denominated in foreign currencies at the year-end are translated at year-end rates. In case of monetary items where the closing rate is unrealistic, translation rate is estimated based on past trend and expected realization/ disbursement.

c) Non-monetary items other than fixed assets denominated in foreign currencies are reported on exchange rate at the transaction date. Fixed Assets are reported on exchange rate as at the transaction date as increased/reduced by the exchange difference arising on the corresponding foreign currency liability.

d) Income or expense on account of exchange difference on settlement or translation is recognized in the Statement of Profit & Loss. Premium or Discount on forward exchange contracts is recognized on pro-rata basis with reference to the life of the forward contract except for forward covers taken at the behest of Business Associates, in which case the premium or discount is recognized at the inception of the forward exchange contract on matching principles since the corresponding transactions with the Associate are carried out based on the forward rate.

5. FIXED ASSETS - TANGIBLE

Fixed Assets other than land & building are stated at historical cost less accumulated depreciation and impairment. Land & building are stated at revalued amount less amortization/depreciation.

6. INTANGIBLE ASSETS

Cost incurred on Intangible assets (computer software), resulting in future economic benefits are capitalized as Intangible Assets and amortized on straight-line method over a period of two and a half year beginning from the date of capitalization.

7. DEPRECIATION AND AMORTISATION

a. Depreciation on tangible fixed assets other than land is provided in accordance with useful life of assets specified in Schedule II of Companies Act, 2013 on straight-line method.

b. Leasehold land is amortised over the lease period. Land on perpetual lease is not amortised.

c. Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the date the asset is available for use/disposed.

8. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value and impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

9. INVESTMENTS

a) Long term investments are carried at cost. When there is a decline (other than temporary) in the value of long term investments, the carrying amount is reduced to recognise the decline.

b) Current investments are carried at the lower of cost and fair value.

10. INVENTORIES

Inventories are carried at lower of cost and net realizable value. Cost is determined as (a) on weighted average method in respect of inventories pertaining to own business and items handled on Govt. account under PDS or otherwise, (b) on actual cost as per specific identification method in respect of items handled on back to back arrangement with business associates, (c) Goods-in-transit valued at CIF cost. Cost includes cost of procurement (excluding element of self-insurance, if any), duties, taxes and cess and all direct and indirect costs incurred to bring the stocks to the condition as at the time of valuation. Net realizable value is the estimated price realizable in the ordinary course of business less further costs to be incurred for completing the sale. Estimates of net realisable value are based on the most reliable evidence available at the time of estimation as to the amount the inventories are expected to realize and also take into consideration fluctuations of price or other factors affecting the realizable value including events occurring after the balance sheet date to the extent that such events confirm the conditions existing at the balance sheet date.

11. COST OF SALE AND SALES

a) Purchases and sales are recognised on the performance of contracts.

b) In cases where contracts provide for crystallization of price or for price adjustment on a subsequent date, corresponding purchases and sales are booked on the basis of expected settlement price and any differential determined subsequently is accounted for at the time of final settlement. Cost of Sale and Sales are accounted for considering all costs and elements including usance interest on supplier''s credit as provided for in the contract and incurred till the date of recognition including expenses incurred by and surplus accruing to Business Associates as per contract terms.

c) In respect of back-to-back / tripartite / joint-execution / third party arrangements, purchases and sales are booked on the basis of documents furnished by the Business Associate as adjusted for the fixed trade margin accruing to the Company.

d) Sales include transactions under third party arrangements and counter-trade obligations met by exports through the Company.

e) In case of dealings on behalf of the Government (including consignments under Government''s Gift / Grant Scheme), purchases and sales and incidental expenses or income thereof are accounted for under the respective head of accounts. Surplus or deficit to Government Account, after adjusting service margin accruing to the Company, is adjusted in Cost of Sales or Trade Income respectively.

12. CLAIMS

Claims are recognized in the Statement of Profit & Loss if there is no uncertainty relating to its ultimate realization. Claims recognized in the Statement of Profit & Loss but subsequently becoming doubtful are provided for through the Statement of Profit & Loss.

13. SELF INSURANCE

The Company covers certain commodities handled by it on selective basis under its self-insurance scheme. The surplus of premia realised to cover the risk of commodities over the related claims and reinsurance premia paid to outside agencies to cover the risk of claims is included under the head ''Other Income (Trade)''. No provision is made in respect of unexpired risks and claims are accounted as expenditure when reported.

14. EMPLOYEE BENEFITS

a) Short term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

b) Employees'' benefit, under defined contribution plan comprising provident fund and pension fund are recognized based on the undiscounted obligation of the company to contribute to the plan. The same is paid to funds administered through separate Trust.

c) Retirement Benefits:

i) Company''s contributions to Gratuity Trust Fund and liability towards Leave Encashment and Half Pay Leave are provided on accrual basis. Gratuity, Leave Encashment and Half Pay Leave are determined on the basis of Actuarial Valuation undertaken as at the year end.

ii) Liability towards Post-retirement Medical Benefits is provided based on Actuarial Valuation as at the year end.

d) Other Long Term Benefits:

Other long term benefits i.e. Long Service Award are determined on the basis of Actuarial Valuation undertaken at the year end.

e) Termination Benefits:

Retirement benefits under voluntary retirement scheme is written off in the year in which opted.

15. PROVISION FOR DOUBTFUL DEBTS/ADVANCES/CLAIMS

Provision for doubtful debts / advances /claims is made where there is uncertainty of realization irrespective of the period of its dues. For outstanding over three years (except government dues), provision is made unless the amount is considered realizable as per management estimate.

16. RESERVES

a) Exchange Fluctuation Reserve represents exchange fluctuation gains on treasury operations set aside to meet future losses, if any.

b) Export/Import Contingency Reserve is appropriated out of profits to meet unforeseen losses in respect of export/import operations.

17. EXHIBITIONS AND FAIRS

The cost of samples and other items acquired for various exhibitions and fairs in India and abroad are charged to revenue in the year in which incurred.

18. EXPENSES ON COMMON SERVICES

Recovery of expenses in respect of certain common services between the Company and its erstwhile subsidiaries is based on turnover/contract concluded/occupancy/ utilisation of manpower as is considered appropriate to the nature of expense recovered.

19. BORROWING COSTS

Borrowing costs attributable to acquisition or construction of qualifying assets up to the date the assets are ready for their intended use are capitalized as part of cost of such asset. All other borrowing costs are recognized as expense of the year in which incurred.

20. TAXES ON INCOME

a) Current tax is provided on the basis of taxable income determined under the Income Tax Act, 1961.

b) Minimum Alternative Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward.

c) Deferred tax is recognized, subject to the consideration of prudence, on timing difference. Deferred Tax Assets and Liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

21. CASH FLOW STATEMENT

a) Cash Flows relating to trade finance provided by Business Associates or the Company for execution of trading contracts including utilization of the finance towards fixed deposits with banks for opening letters of credit in favour of suppliers and refund/payment/recovery of interest thereon as per the terms of Contract are treated as part of Operating Activities.

b) Cash Flow Statement is prepared in accordance with the on Indirect Method prescribed in Accounting Standard - 3 on Cash Flow Statement issued by ICAI.

22. PROVISONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if the following conditions are satisfied:

i) The company has a present obligation as a result of past event,

ii) A probable outflow of resources is expected to settle the obligation, and

iii) The amount of the obligation can be reliably estimated.

Contingent liability is disclosed, if

i) The company has a possible obligation as a result of past event,

ii) The Probability of out flow of resources is not remote and,

iii) No reliable estimation of such obligation is possible.

Contingent assets are neither recognized nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

45. CONTINGENT LIABILITIES & COMMITMENT

Notes: (a) The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

(b) Contingent liabilities include an amount of Rs. 82.57 crore (Rs. 82.57 crore) along with interest payable to a foreign supplier on account of import of pulses in earlier years as per award of arbitral tribunal passed in favour of foreign supplier. The company has filed an appeal against the Tribunal award in the Hon''ble Delhi High Court. This transaction was undertaken on behalf of Ministry of Consumer Affairs (MOCA), hence the corresponding claim is made with MOCA, which is under consideration.

(c) Contingent liability is not updated by determining and including of interest by Mumbai Branch. Certain supporting documents of contingent liability were not available at Ahmedabad & Mumbai Branch.

46. (a) Trade receivables, loans & advances and other current & non-current assets include Rs. 31.09 crore (Rs. 18.85 crore) which are under dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on account of Government of India. Hence no provision is considered necessary.

(b) In the opinion of the Management of the company, the Current Assets, Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet and provision has been made wherever considered necessary.

47. Balances in parties'' accounts, claim recoverable and advances are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

48. Current and other liabilities include balances that are subject to reconciliation/confirmation and consequential adjustments.

49. Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Business Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

50. ADDITIONAL INFORMATION PURSUANT TO PART II OF SCHEDULE-III OF THE COMPANIES ACT, 2013

52. RELATED PARTY TRANSACTION

1. Key Management Personnel

i. Directors

a. Shri Khaleel Rahim Chairman & Managing Director

b. Shri Manoj Mishra Director (Finance) (up to 03.06.2015)

c. Shri Rajiv Chopra Director (Marketing)

d. Shri Sanjeev Sharma Director (Personnel)

e. Shri G. Ravichandran Director (Finance) (from 27.01.2016)

f. Shri P.K. Das Director (Marketing) (from 19.02.2016)

ii. Relatives of Directors None

Remuneration paid to Key Management Personnel Rs. 1.51 crore (Rs. 1.59 crore).

2. Subsidiary - STCL Ltd. (Wholly Owned Subsidiary)

Transactions - Amount charged during the year for Rent & other common services

Rs. Negligible (Rs. Negligible)


Mar 31, 2015

1. CONTINGENT LIABILITIES & COMMITMENT

(Rs. in crore)

I Contingent Liabilities not provided for 31.3.2015 31.3.2014

A Claims against the company /disputed liabilities not acknowledged 3,054.97 1,927.91 as debt (incl. interest wherever determined)

B Guarantees 59.39 66.47

C Other money for which company is contingently liable 26.24 46.07

II Commitment

A Estimated amount of contracts remaining to be executed on capital 9.25 9.57 account and not provided for

B Uncalled liability on shares and other investments partly paid - -

C Other commitments - -

Note:

(a) The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

(b) Contingent Liabilities include an amount of Rs. 82.57 crore (Rs. 170.86 crore) along with interest payable to a foreign supplier on account of import of Pulses in earlier years as per award of arbitral Tribunal passed in favour of foreign supplier. STC has filed an appeal against the Tribunal award in the Delhi High Court. This transaction was undertaken on behalf of Ministry of Consumer Affairs (MOCA), hence the corresponding claim is made with MOCA, which is under consideration.

2. Trade receivables, loans & advances and other current & non-current assets which are not specifically mentioned in notes include Rs. 18.85 crore (Rs. 61.09 crore) which are under dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on account of Government of India. Hence no provision is considered necessary.

3. Balances in parties'' accounts, claim recoverable and advances are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

4. Current and other liabilities include balances that are subject to reconciliation/ confirmation and consequential adjustments.

5. Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

6. DISCLOSURE AS PER AS-15 (EMPLOYEES BENEFIT)

General description of various defined employee benefit schemes are as under:

A. Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognised as expenses and is charged to the Statement of Profit & Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by the Government. Overall interest earnings and cumulative surplus is more than the statutory interest payment requirement.

B. Post-Retirement Medical Facility (PRMF)

The company has Post-Retirement Medical Facility (PRMF), under which retired employee and his/her spouse are eligible for medical facilities in the empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. Post retirement medical benefits are recognised in the books as per the actuarial valuation. Total liability of Rs. 94.58 crore (Rs. 93.97 crore) is estimated as per actuarial valuation as on 31.03.2015 for on roll and retired employees.

C. Leave

The Company provides for Earned Leave (EL) and Half Pay Leave (HPL) benefit to the employees of the Company which accrue annually at 30 days and 20 days respectively. The maximum ceiling for encashment of leave at time of superannuation/cessation from service other than on disciplinary ground shall be limited to 300 days (EL & HPL combined). 50% of EL subject to a maximum 150 days is en-cashable on resignation. EL is en-cashable while in service leaving a minimum balance of 15 days twice in a year. Total liability of Rs.15.66 Crore (Rs. 16.19 Crore) for EL and Rs. 13.77 Crore (Rs.13.72 Crore) for HPL is estimated as per actuarial valuation as on 31.03.2015.

D. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 x last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs. 10 lakhs on superannuation, resignation, termination, disablement or death. Total liability of Rs. 53.54 Crore (Rs. 53.15 Crore) is estimated as per actuarial valuation as on 31.03.2015 for on roll employees.

E. Other Benefits

Service awards are given to regular employees for rendering continuous service in the Company for long service rendered by them on completion of 15/25/30/35/38 years of service. Besides this, service award @ Rs. 1,000/- per year for each completed year of service is also given at the time of retirement subject to a maximum of Rs. 30,000/-. Total liability of Rs. 1.57 Crore (Rs. 1.56 Crore) is estimated as per actuarial valuation as on 31.03.2015 for on roll employees.

F. Pension

Company has defined contribution pension plan for its existing employees in pursuance to the guidelines issued by the Department of Public Enterprises. In this regard STC Employees Defined Contribution Superannuation Pension Trust has been formed. Under the scheme the employer''s contribution is 9% of basic pay plus VDA of eligible employees and the funds of the trust are managed by LIC.

The summarised position of various defined benefits recognised in the Statement of Profit & Loss and Balance Sheet are as under:

7. The company has a system of physical verification of inventories and fixed assets in phased manner at regular interval and verified with Books of Accounts and records. Differences observed, if any, are dealt with accordingly in the books.

8. As required by the Accounting Standard-28 on "impairment of Assets", the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

9. Accounting policies, Schedules and Notes on accounts attached form an integral part of the accounts. Values in brackets indicate corresponding previous year figure. Wherever necessary, previous year figures have been rearranged/regrouped to make them comparable with those of current year


Mar 31, 2014

1.1 Long term trade receivables include Rs. 568.44 crore (Rs. 568.44 crore) on account of export of pharma product to foreign buyers on back to back basis. The entire amount is overdue. As there is default in payments against export bills by the buyers which have ultimately gone into liquidation, litigation processes have been initiated by STC as well as by Indian Associates and their bankers. A claim of Rs. 527.86 crore has been admitted by the liquidator. There is, however, a corresponding credit under back to back arrangement of Rs. 568.78 crore (Rs. 568.60 crore) under sundry creditors. In view of this no provision is considered necessary.

1.2 Long term trade receivables include Rs. 788.47 crore (Rs. 787.69 crore) under the Credit Linked Insurance Scheme (CLIS) for export of gold jewellery etc. against which corresponding credit balances of Rs. 342.18 crore (Rs. 348.62 crore) are available, leaving net receivable of Rs. 446.29 crore. Action against the associates has been initiated. The matter is being pursued legally and company is hopeful of recovery. Yet as a measure of abundant caution a provision of Rs. 338.28 crore (Rs. 69.56 crore) has been made during the year, making a total provision to Rs. 446.29 crore to the extent of net debtors.

1.3 Long term trade receivable includes Rs. 4.94 crore (Rs. 4.94 crore) towards reimbursement of loss in supply of edible oil under PDS to M/s Gujarat State Civil Supply Corporation under the subsidy scheme of Government of India. The claim is being followed up with Government of India. However, as matter of prudence full provision has been made during the year.

1.4 Long term trade receivable includes Rs. 3.21 crore (Rs. 3.20 crore) recoverable from one of the associates towards import of pet bottle material, which are pledged with the company. Steps have been taken to recover the dues. A provision of Rs. 1.28 crore has been made during the year 2012-13 to the extent not covered by pledged stock.

1.5 Long Term Trade Receivables includes Rs. 51.52 crore (Rs. 51.52 crore) against which credit balance amounting to Rs. 42.29 crore (Rs. 42.29 crore) (Note no. 6) is available. Full provision for net amount of Rs. 9.23 crore has been made during the year. Trade & Misc. advances includes Rs. NIL (Rs. 84.86 crore) (Note no 18) in respect of one of the associates through whom various agricultural items were exported up to 2011-12 through Mumbai branch. Upon non-receipt of the dues from the associate, the company has initiated necessary legal steps for its recovery. However considering remote possibility of its recovery full outstanding amount of Rs. 81.82 crore has been written off during the year.

1.6 Long Term Trade Receivables includes Rs. 81.55 crore (Rs. 82.06 crore) recoverable from one of the associates against which legal cases u/s 138 of N.I. Act, 1881, for recovery of STC''s dues are pending in Patiala House courts, New Delhi. The outstanding amount is secured by way of stock of HR coils pledged to STC lying under the control and custody of CWC, Mumbai. An amount of Rs. 4.00 crore has been recovered during the financial year 2013-14. Further, payment of Rs. 9.50 crore has been made by the associate till 27.05.2014. Hence , no provision is considered necessary.

1.7 Long Term Trade Receivables includes Rs. 11.83 crore (Rs. 11.83 crore) recoverable from one of the associates for which legal cases u/s 138 of the N.I. Act, 1881, for recovery of STC''s overdues are pending in Patiala House Courts, New Delhi. The outstanding amount is secured by way of stocks of HR coils pledged to STC lying under the control and custody of CWC, Mumbai. Hence, no provision is considered necessary.

1.8 Claims recoverable (Govt. of India) include Rs. 114.95 crore ( Rs. 158.93 crore) (Note no. 25) towards import of pulses under government account since the year 2006-07 to 2010-11. The claim for the same has been lodged with the Ministry of Consumer Affairs for reimbursement of actual losses. An amount of Rs. 44.00 crore received from the Ministry of Consumer Affairs against the claim during the year. As the reimbursement of claim has been delayed for over three years, as a matter of prudence provision of Rs. 114.95 crore has been made during the year.

1.9 Trade receivable includes Rs. 122.22 crore (Rs. 121.99 crore) of one of the associates, which is overdue. The dues are fully secured by pledge of stocks, which were purchased under advance license in the name of the associate company. The fixed assets of the associate company have been taken over by Asset Reconstruction Company (India) Limited (ARCIL). ARCIL has initiated action to sell the associate company''s fixed assets including its plant to another company, which will facilitate in liquidation of the pledged stock and recovery of the dues. No provision is considered necessary.

1.10 Trade receivable includes Rs. 1468.14 crore (Rs. 1353.25 crore) recoverable form one of the associates for goods sold to them during earlier years. Dues are secured by EMD of Rs. 29.73 crore (Rs. 37.78 crore), corporate guarantee of its holding company and the personal guarantee of the chairman of its holding company. In addition, the associate had signed a Conciliation Agreement dated 15.11.2011 and further settlement agreement dated 17.05.2012 with STC for payment of entire dues by 10.11.2012. However, the associate did not pay the entire dues and sought more time for payment. The same was not agreed by the company and legal action against the associate has been initiated. The associate has affirmed its commitment to repay entire dues along with interest and paid Rs. 57.77 crore during the year 2013-14. Further, a sum of Rs. 23.00 crore has been received on 03.04.2014.

1. CONTINGENT LIABILITIES & COMMITMENT (Rs. in crore)

I Contingent Liabilities not provided for 31.3.2014 31.3.2013

A Claims against the company not acknowledged as debt 1,392.30 1,467.54

B Guarantees 110.27 219.87

C Other money for which company is contingently liable 581.68 411.80

II Commitment

A Estimated amount of contracts remaining to be executed on capital 9.57 10.09 account and not provided for

B Uncalled liability on shares and other investments partly paid - -

C Other commitments - -

Note: The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

2. Trade receivables, loans & advances and other current & non-current assets include Rs. 61.09 crore (Rs. 36.22 crore) which are under dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on Government of India''s accounts. Hence no provision is considered necessary.

3. Balances in parties'' accounts are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

4. Current liabilities include balances that are subject to reconciliation/confirmation and consequential adjustments.

5. Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

6. DISCLOSURE AS PER AS-15 (EMPLOYEES BENEFIT)

General description of various defined employee benefit schemes are as under:

A. Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognised as expenses and is charged to the Profit & Loss Account. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by the Government. Overall interest earnings and cumulative surplus is more than the statutory interest payment requirement.

B. Post-Retirement Medical Facility (PRMF)

The company has Post-Retirement Medical Facility (PRMF), under which retired employee and his/her spouse are eligible for medical facilities in the empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. Post-retirement medical benefits are recognised in the books as per the actuarial valuation. Total actuarial liability of Rs. 93.97 crore (Rs. 67.47 crore) is estimated as per actuarial valuation as on 31.03.2014 for on roll and retired employees.

C. Leave

The Company provides for Earned Leave (EL) and Half Pay Leave (HPL) benefit to the employees of the Company which accrue annually at 30 days and 20 days respectively. The maximum ceiling for encashment of leave at time of superannuation/cessation from service other than on disciplinary ground shall be limited to 300 days (EL & HPL combined). 50% of EL subject to a maximum 150 days is en-cashable on resignation. EL is en-cashable while in service leaving a minimum balance of 15 days twice in a year. Total actuarial liability of Rs. 16.19 crore (Rs. 17.77 crore) for EL and Rs. 13.72 crore (Rs. 13.10 crore) for HPL is estimated as per actuarial valuation as on 31.03.2014.

D. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 x last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs. 10 lakhs on superannuation, resignation, termination, disablement or death. Total actuarial liability of Rs. 51.28 crore (Rs. 44.64 crore) is estimated as per actuarial valuation as on 31.03.2014 for on roll employees.

E. Other Benefits

Service awards are given to regular employees for rendering continuous service in the Company for long service rendered by them on completion of 15/25/30/35/38 years of service. Besides this, service award @ Rs. 1,000/- per year for each completed year of service is also given at the time of retirement subject to a maximum of Rs. 30,000/-. Total actuarial liability of Rs. 1.56 crore (Rs. 1.53 crore) is estimated as per actuarial valuation as on 31.03.2014 for on roll employees.

F. Pension

Company has defined contribution pension plan for its existing employees in pursuance to the guidelines issued by the Department of Public Enterprises. In this regard STC Employees Defined Contribution Superannuation Pension Trust has been formed. Under the scheme the employer contribution is 9% of basic pay plus VDA of eligible employees and the funds of the trust are managed by LIC.

The summarised position of various defined benefits recognised in the P&L Accounts and Balance Sheet are as under:

7. The company has a system of physical verification of inventories and fixed assets in phased manner at regular interval and verified with Books of Accounts and records. Differences observed, if any, are dealt with accordingly in the books.

8. As required by the Accounting Standard-28 on "impairment of Assets", the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

9. Accounting policies, Schedules and Notes on accounts attached form an integral part of the accounts. Values in brackets indicate corresponding previous year figure. Wherever necessary, previous year figures have been rearranged/regrouped to make them comparable with those of current year.


Mar 31, 2013

1.1 Trade advances include a sum of Rs.87.39 crore (Rs.87.39 crore) recoverable from one of the parties, against which the company has initiated legal actions including criminal proceedings. Full provision has been made in earlier years. The company is successful in getting arbitration award for Rs.110.00 crore in its favour along with 12% interest per annum from 1st May, 2006 till realization of the award. However the parties have raised objections to the award before honourable court. Hearing of the same is in progress.

1.2 In respect of a trading operation in wheat during the year 2003-04 and 2004-05, disposal of goods and recovery have not taken place as per contract for which legal actions have been initiated. Entire dues, including recoverable from FCI a/c the associate, aggregating Rs.58.41 crore (Rs.58.41 crore) have been provided/written off in earlier years. Further, during the current year Rs.6.69 crore (Rs.19.35 crore) has been written off out of the provisions. The additional sales tax liability that may arise, for which the company has given declaration, is not ascertained.

1.3 Trade Receivables includes Rs.51.52 crore (Rs.51.52 crore) against which credit balance amounting to Rs.42.29 crore (Rs.35.21 crore) is available and Trade & Misc. advances includes Rs.84.86 crore (Rs.74.68 crore) (Note no 25) in respect of one of the associates through whom various agricultural items were exported up to 2011-12 through its Mumbai branch. Upon non-receipt of the dues from the associate, the company has initiated necessary legal steps for its recovery. The associate has also approached the company seeking further time for making payment. The party has submitted a payment plan and accordingly remitted USD 2,00,000 equivalent to Rs.1.10 crore approx. after the date of balance sheet. In view of the action taken for recovery and discussions with the associate, the company is hopeful of realization of entire dues and no provision is considered necessary at this stage.

1.4 Details of dues from Directors/ Officers :-

- Directors : NIL NIL

- Officers : Rs.5.37 crore Rs.4.35 crore

2.1 Long term trade receivables include Rs.568.44 crore (Rs.568.44 crore) on account of export of pharma product to foreign buyers on back to back basis. The entire amount is overdue. As there is default in payments against export bills by the buyers which have ultimately gone into liquidation, litigation processes have been initiated by STC as well as by Indian Associates and their bankers. A claim of Rs.527.86 crore has been admitted by the liquidator. There is, however, a corresponding credit under back to back arrangement of Rs.568.60 crore (Rs.568.67 crore) under sundry creditors. In view of this no provision is considered necessary.

2.2 Long term trade receivables include Rs.788.71 crore (Rs.787.69 crore) under the Credit Linked Insurance Scheme (CLIS) for export of gold jewellery etc. against which corresponding credit balances of Rs.348.62 crore (Rs.361.63 crore) are available, leaving net receivable of Rs.440.09 crore. Action against the associates has been initiated. An amount of Rs.1.28 crore was realised from the associates during 2011-12. The matter is being pursued and the company is hopeful of recovery. Yet as a measure of abundant caution a provision of Rs.69.56 crore (Rs.38.45 crore) has been made during the year, making a total provision to Rs.108.01 crore to the extent the company has already paid to Exim Bank as there are no commensurate recoveries from the associate.

2.3 Long term trade receivable includes Rs.4.94 crore (Rs.4.94 crore) towards reimbursement of loss in supply of edible oil under PDS to M/s Gujarat State Civil Supply Corporation under the subsidy scheme of Government of India. As the claim is under process with Government of India, no provision is considered necessary.

2.4 Long term trade receivable includes Rs.3.20 crore (Rs.3.20 crore) recoverable from one of the associates towards import of pet bottle material, which are pledged with the company. Steps have been taken to recover the dues. A provision of Rs.1.28 crore has been made during the year to the extent not covered by pledged stock.

3.1 For Mode of Valuation, please refer para 10 of Note 44 to the financial statements

3.2 Stock-in-Trade includes :-

Goods-in-Transit Rs.1.64 Rs.102.09

3.3 Stock-in-trade does not include value of 246 Kg of gold & 1076.45 Kg of silver imported on ''consignment basis'' lying in the vaults of supplier for which custom duty has already been paid.

4.1 Trade receivable includes Rs.121.99 crore (Rs.121.99 crore) of one of the associates, which is overdue. The dues are fully secured by pledge of stocks, which were purchased under advance license in the name of the associate company. The fixed assets of the associate company have been taken over by Asset Reconstruction Company (India) Limited (ARCIL). ARCIL has initiated action to sell the associate company''s fixed assets including its plant to another company, which will facilitate in liquidation of the pledged stock and recovery of the dues. No provision is considered necessary.

4.2 Trade receivable includes Rs.1353.25 crore (Rs.1300.15 crore) recoverable form one of the associates for goods sold to them during earlier years. Dues are secured by EMD of Rs.37.78 crore (Rs.35.55 crore), corporate guarantee of its holding company and the personal guarantee of the chairman of its holding company. In addition, the associate has signed a Conciliation Agreement dated 15.11.2011 and further settlement agreement dated 17.05.2012 with STC for payment of entire dues by 10.11.2012. However, the associate did not pay the entire dues and has sought more time for payment. The same was not agreed by the company and legal action against the associate has been initiated. The associate has affirmed its commitment to repay entire dues along with interest and has paid Rs.185.13 crore during the year 2012-13.

5.1 Claims recoverable (Govt. of India) include Rs.158.93 crore (Rs.158.93 crore) towards import of pulses under government account since the year 2006-07 to 2010-11. The claim for the same has been lodged with the Ministry of Consumer Affairs for reimbursement of actual losses. An amount of Rs.11.70 crore has been received after the Balance Sheet date from the Ministry of Consumer Affairs towards part payment against these claim.

5.2 Claims recoverable (Govt. of India) include Rs.49.18 crore (Rs.115.61 crore) on account of edible oil import-PDS, which is under process by Ministry of Food and Public Distribution, Government of India.

5.3 Claims recoverable (Govt. of India) includes Rs.5.28 crore towards import of pulses on behalf of UP government for sale under PDS which was valid up to 30th June 2012. However , all such pending claims were to be submitted to Ministry of Consumer Affairs by 31.03.2013 for settlement. Accordingly, claim lodged amounting to Rs.13.23 crore after 30th June,2012, out of which Rs.7.95 crore has already been received on 11.01.2013. Balance claim is being pursued with the Ministry of Consumer Affairs, hence no provision is considered necessary.

5.4 Claims recoverable ( State Govt.) includes Rs.2.71 crore towards carrying costs for delayed lifting of pulses by State Govts. Claim for the same was lodged during the year 2011-12. The same is being followed up with the State Govt. Settlement of the claim shall be done on completion of lifting of balance quantity of pulses. There is a credit balance of Rs.9.08 crore on this account.

6.1 As per Accounting Standard-15(Revised) "Employee Benefits", the disclosure as defined in the Accounting Standard are given in Note No. 54.

6.2 Value of Bonus paid Rs.11,955 (Rs.11,031)

6.3 Whole time directors are allowed use of company car for non-duty journey up to 1000 km per month on payment of Rs.490/520/780 per month, as applicable.

6.4 Actual medical expenses incurred towards retired employees including retired directors is Rs.6.36 crore (Rs.4.04 crore) and provision for post-retirement medical benefits on actuarial basis is Rs.5.94 crore (Rs.13.13 crore)

7. CONTINGENT LIABILITIES & COMMITMENT

(Rs. in crore)

I Contingent Liabilities not provided for 31.3.2013 31.3.2012

A Claims against the company not acknowledged as debt 1,467.54 1,081.63

B Guarantees 219.87 544.49

C Other money for which company is contingently liable 411.80 1,665.38

II Commitment

A Estimated amount of contracts remaining to be executed on capital 10.09 7.21 account and not provided for

B Uncalled liability on shares and other investments partly paid - -

C Other commitments - -

Note: The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

8. The company has written off overdue receivables amounting to Rs.96.15 crore pertaining to previous year export import transactions, where recovery is uncertain and withdrawn Rs.95.96 crore from the Export/Import contingency reserve created out of appropriations of earlier years profit with an objective to set off such losses. There would have been loss of Rs.81.54 crore instead of profit of Rs.14.42 crore (before Tax) and EPS of (-) Rs.13.00 instead of Rs.2.99 for the year ended 31.03.2013, if the company had not utilized this reserve.

9. Trade receivables, loans & advances and other current & non-current assets include Rs.36.22 crore (Rs.103.20 crore) pertaining to previous years which are under dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on Government of India''s accounts. Hence no provision is considered necessary.

10. Balances in parties'' accounts are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

11. Current liabilities include balances that are subject to reconciliation/ confirmation and consequential adjustments.

12. Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

13. INFORMATION ABOUT BUSINESS SEGMENT AS AT 31.03.2013 - attached.

14. RELATED PARTY TRANSACTION:

1. Key Management Personnel

i. Directors

a. Shri J.S. Deepak Chairman & Managing Director (from 01/12/2012)

b. Shri N.K.Mathur Chairman & Managing Director (upto 30/11/2012)

c. Shri S. S. Roy Burman Director (Marketing) (upto 30/04/2012)

d. Shri M. M. Sharma Director (Personnel)

e. Shri Khaleel Rahim Director (Marketing)

f. Shri Manoj Mishra Direrctor (Finance) (from 15/10/2012)

g. Shri Rajiv Chopra Director (Marketing) (from 01/01/2013)

ii. Relatives of Directors None

Remuneration paid to Directors (Key Management Personnel) has been disclosed in Note No 31(B)- Remuneration to Directors

2. Subsidiary - STCL Ltd. (Wholly Owned Subsidiary)

Transactions - Amount charged during the year for Rent & other common services ''Negligible (Rs.0.62 crore)

Amount Received during the year: ''Negligible (Rs.NIL)

Balance at the year end - Rs.4.14 crore (Rs.4.14 crore)

The following officials of STC held key Management position in the above company:

Name of the Officials Designation

Sh. J S Deepak Chairman (from 20/12/2012)

Sh. N K Mathur Chairman (upto 30/11/2012)

Sh. Manoj Mishra Director Finance (from 18/12/2012)

15. DISCLOSURE AS PER AS-15 (EMPLOYEES BENEFIT)

General description of various defined employee benefit schemes are as under:

A. Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognised as expenses and charged to the Profit & Loss Account. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by the Government. Overall interest earnings and cumulative surplus is more than the statutory interest payment requirement.

B. Post-Retirement Medical Facility (PRMS)

The company has Post-Retirement Medical Scheme (PRMS), under which retired employee and his/her spouse are eligible for medical facilities in the empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. Post retirement medical benefits are recognised in the books as per the actuarial valuation. Total actuarial liability of Rs.67.47 crore (Rs.57.48 crore) is estimated as per actuarial valuation as on 31.03.2013 for on roll and retired employees.

C. Leave

The Company provides for Earned Leave (EL) benefit and Half Pay Leave (HPL) benefit to the employees of the Company which accrue annually at 30 days and 20 days respectively. EL subject to a maximum of 300 days is en-cashable on superannuation / death. 50% of EL subject to a maximum 150 days is en-cashable on resignation. EL is en-cashable while in service leaving a minimum balance of 15 days twice in a year. HPL is en-cashable only on superannuation/death up-to the maximum of 300 days (150 days full pay) as per the rules of the Company. Total actuarial liability of Rs.17.77crore (Rs.16.42 crore) for EL & Rs.13.10 crore (Rs.12.72 crore) for HPL is estimated as per actuarial valuation as on 31.03.2013.

D. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 x last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs.10 lakh on superannuation, resignation, termination, disablement or death. Total actuarial liability of Rs.44.64 crore (Rs.40.25 crore) is estimated as per actuarial valuation as on 31.03.2013 for on roll employees.

E. Other Benefits

Service awards are given to regular employees for rendering continuous service in the Company for long service rendered by them on completion of 15/25/30/35/38 years of service. Besides this, service award @ Rs.1,000/- per year for each completed year of service is also given at the time of retirement subject to a maximum of Rs.30,000/-. Total actuarial liability of Rs.1.53 crore (Rs.1.44 crore) is estimated as per actuarial valuation as on 31.03.2013 for on roll employees.

F. Pension

Company has defined contribution pension plan for its existing employees in pursuance to the guidelines issued by the Department of Public Enterprises. In this regard STC Employees Defined Contribution Superannuation Pension Trust has been formed. Under the scheme the employer is contributing 9% of Basic Pay plus VDA of eligible employees and the funds of the trust are managed by LIC.

The summarised position of various defined benefits recognised in the Profit & Loss Account and Balance Sheet are as under:

16. The company has a system of physical verification of inventories and fixed assets in phased manner at regular interval and verified with Books of Accounts and records. Differences observed, if any, are dealt with accordingly in the books.

17. As required by the Accounting Standard-28 on "impairment of Assets", the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

18. Accounting Policy

Accounting Policy has been clarified in respect of recognition of "Liquidated damages and Claims from insurance companies" at para 2 and "Provisioning for Doubtful debts/Advances/Claims" at para15 of Note 44.

There is no impact on the profitability of the company on account of above clarifications.

19. Accounting policies, Schedules and Notes on accounts attached form an integral part of the accounts. Values in brackets indicate corresponding previous year figure.


Mar 31, 2012

I) Details of Bonus Issue during the preceding five years :

3,00,00,000 equity shares having face value of Rs. 10/- each alloted as fully paid by way of bonus shares by capitalisation of General reserve during F.Y. 2007-08 in the ratio 1:1

IV) Equity shares issued and subscribed do not enjoy any differential rights

1.1.During the year Dividend of Rs.2 Per Share (Previous Year Rs.3) has been recommended by the Board of Directors.

1.2.Bonus Reserve represents "Set On" available under the Payment of Bonus Act, 1965.

1.3.Deductions from Bonus Reserve represent amount transferred to Profit & Loss Account being "Set Off" as per the Payments of Bonus Act, 1965.

2.1 Term loan from Bank Secured by charge over receivable financed under export bills, assignment of credit insurance policy and Bank Guarantee of Rs.33.00 Crore (P.Y. Rs.26.00 Crore) is given.

2.2 Cash credit / Overdraft/ Demand Loan secured by hypothecation of stock and trade receivables not older than 180 days

2.3 Packing Credit (Pre-shipment/ Post-shipment) secured by hypothecation of stock and export bills

3.1 The process of issuance of sub-divided Lease Deeds in respect of STC Complex at New Delhi, residential land and flats at Mehrauli Road separately in the name of the company and its co-owners is pending. (Gross Cost of Land Rs.1.04 Crore and Building Rs.20.11 Crore)

3.2 Registration of Deeds of Conveyance in respect of 2 flats at Kolkata is pending. (Total Purchase Value Rs.0.06 Crore)

3.3 Lease hold land valuing Rs.1.29 Crore at Bangalore is yet to be registered in favour of the company.

3.4 Formal lease deed in respect of Lease hold plot where company has Tank Farm Installation at Mumbai Port Trust is yet to be executed though lease has been extended by way of allotment letter. Registration of deed of conveyance in respect of 32 flats at Mumbai is pending (Total Purchase value Rs.5.83 Crore).

4.1 Other investment include Rs.2.82 Crore (Rs. 2.82 Crore) in its 100% subsidiary company namely STCL. The subsidiary company is having negative net worth as per its Audited Balance Sheet as on 31st March 2011. Full provision for diminution in the value of investment has been made during current year.

5.1 In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income", the company has Deferred Tax Assets (Net) of Rs.73.01 Crore (Rs. 65.82 Crore). There is reasonable certainity that sufficient future taxable income will be available against which the deferred tax assets can be be realised.

5.2 Trade advances include a sum of Rs.87.39 Crore (Rs.87.39 Crore) recoverable from one of the parties, against which the company has initiated legal actions including criminal proceedings. Yet as a measure of abundant caution, full provision has been made in the earlier years. The company is successful in getting Arbitration Award for Rs.110.00 Crore in its favour along with 12% interest per annum from 1st May, 2006 till realization of the Award. Company is in the process of executing the Arbitration Award.

5.3 In respect of a trading operation in Wheat, disposal of goods and recovery have not taken place as per contract for which legal actions have been initiated. Entire dues including recoverable from FCI A/c M/s Priyanka Overseas Limited aggregating to Rs.58.41 Crore (Rs.58.41 Crore) has been provided/written off in earlier years. Further, during the current F.Y Rs.19.35 Crore has been written off out of the provisions. The additional sales tax liability that may arise, for which the company has given declaration, is not ascertained.

5.4 Details of Dues from Directors/Officers

- Directors : Nil

- Officers : Rs.4.35 Crore

6.1 Long Term Trade Receivable includes Rs.568.44 Crore (Rs.568.44 Crore) on account of export of Pharma product to Foreign Buyers on back to back basis. The entire amount is overdue. As there is default in payments against export bills by the buyers which have ultimately gone into liquidation, litigation processes have been initiated by STC as well as by Indian Associates and their bankers. A claim of Rs.527.86 Crore has been admitted by the liquidator. There is, however, a corresponding credit under back to back arrangement of Rs.568.67 Crore (Rs.568.94 Crore) under sundry creditors. In view of this no provision is considered necessary.

6.2 Long Term Trade receivable include Rs.4.94 Crore (Rs.4.94 Crore) towards reimbursement of loss in supply of PDS Items to M/s Gujarat State Civil Supply Corporation under the subsidized scheme of Government of India. As the claim is under process with Government of India, no provision is considered necessary.

6.3 Long term Trade receivable include Rs.3.20 Crore (Rs.3.29 Crore) recoverable from one of the associates towards import of Pet Bottle material, which are pledged with the company. Steps are being taken to recover the amount. No provision is considered necessary by the company, in view of the pledged stock.

7.1 For Mode of Valuation, please refer para 10 of Note 44 to the financial statements

7.2 Stock-in-Trade Includes:-

Goods-in-Transit 102.09 509.38

7.3 Stock-in-Trade doesn't include value of 632 Kg of Gold & 7825.65 Kg of Silver lying in the vaults of supplier for which Custom Duty has been already paid.

8.1 Trade Receivable include Rs.121.99 Crore (Rs.121.99 Crore) of one of the Associates, which is overdue. The company is in the process of reconstruction by Asset Reconstruction Company (India) Limited (ARCIL). The dues are fully secured by pledge of Stocks. The decision to begin operation of plant & appointment at Board Level is in advanced stage. No provision is considered necessary.

8.2 Trade Receivable amounting Rs.1300.15 Crore (Rs.1 137.93 Crore) recoverable from M/s. GSPI as on 31.03.2012 is on account of goods sold to them during previous years. Consequent upon Conciliation Award dated 15.11.2011 under Indian Arbitration & Conciliation Act 1996 for US$ 385 Million (including US$ 69 Million - A/c Ispat Industries Limited) signed between the Company and GSPI/GSHL. GSHL/GSPI was obliged to pay this amount in two installments. First installment of US$ 38.47 million equivalent to Rs.182.62 Crore (Rs.121.34 Crore during 2011- 12 and Rs.61.28 Crore in April, 2012) has already been received.

For the balance amount, on the specific request of GSHL/GSPI, the company allowed extension of time of 180 days subject to payment of US$ 100 million within 90 days, with effect from 13.05.2012 i.e. upto 10th August, 2012. Further Settlement Agreement u/s 73 of the Indian Arbitration & Conciliation Act 1996, was concluded on 17.05.2012 between the company and GSHL/GSPI which was duly authenticated by the Conciliators. The dues are secured by earnest money deposit of Rs.35.53 Crore, corporate guarantee of its holding company, the personal guarantee of Chairman of its holding company, pledge of stocks and post-dated cheques.

8.3 Trade Receivable includes Rs.787.69 Crore against EXIM Bank Related exports, corresponding credit balances are available totalling Rs.361.63 Crore, leaving net debtors of Rs.426.06 Crore. Out of which Rs.30.57 Crore against post shipment credit availed was on the condition without recourse to the Company. Balance Rs.395.49 Crore was recoverable from the associates, Corresponding Liability under post shipment credit amounting to US$ 88.22 Million was restructured and converted to Working Capital Term Loan amounting to Rs.397.17 Crore as per agreement dated 3rd December 2010. Company has repaid Rs.38.45 Crore to M/s EXIM Bank being four quarterly installments during the F.Y 2011-12 after adjustment of Rs.1.28 Crore recovered from one of the associates. A provision of Rs.38.45 Crore has been made in the accounts for the year to the extent there are no commensurate recoveries from the associates.

8.4 An amount of Rs.36.01 Crore (Rs.36.01 Crore) is recoverable from M/s Prime Impex Ltd, Kolkata towards High Sea Sale of Pulses during 2010-11. The associate, in connivance with CHA and surveyor has lifted said stock of pulses which were pledged. STC has lodged FIR against associate, CHA and surveyor in respect of above unauthorized lifting of material. All necessary legal action/steps have been taken by branch and being pursued vigorously in the court of law. EMD of Rs.2.11 Crore is available with the STC. An amount of Rs.0.23 Crore is also available against transaction related to Govt. A/c. Therefore net due from the associate is Rs.33.67 Crore has been fully written off in the F.Y 2011-12.

9.1 Short Term Deposits include Rs.124.96 Crore(P.Y Rs.123.29 Crore) Pledged with Bank as margin against Letters of Credit.

9.2 EEFC A/C Balance is US$ 0.03 Crore (US$ 0.03 Crore)

10.1 Trade advances include Rs.174.35 Crore (Rs.84.84 Crore) from one of the associates whose balance liability to the company has been taken over by GSHL. Accordingly, the amount recoverable was also included in the conciliation agreement signed by GSHL/GSPI with the company under Indian Arbitration and Conciliation Act 1996. An amount of Rs.121.34 Crore has since been received by the company under the conciliation agreement. Further Rs.61.28 Crore was received during April 2012. Under the Further Settlement Agreement dated 17.05.2012 the entire dues are payable to the company by 10.11.2012. Hence no provision is considered neccesary.

10.2 Details of Dues from Directors/Officers

- Directors : Rs.0.003 Crore

- Officers : Rs.1.56 Crore

11.1 Claims recoverable(Govt. of India) include Rs.158.93 Crore towards import of Pulses under Govt. account since the year 2006-07 onwards. The claim for the same has been lodged on Govt. which is under active consideration of the Govt. for reimbursement of actual loss as informed by Ministry of Consumer Affairs.

11.2 Claims recoverable(Govt. of India) include Rs.115.61 Crore on account of Edible oil import-PDS.

12.1 Exchange Fluctuation-Loss (net) Rs.119.93 Crore (P.Y. Exchange gain disclosed in Note 26 Rs.176.05 Crore) Includes Rs.118.72 Crore (P.Y. Exchange Gain Rs.164.42 Crore) on account of Business Associates for which necessary adjustment had already been made in Purchases/ Sales Account, to that extent there is no impact on the profit for the year.

13.1 As per Accounting Standard-15(Revised) "Employee Benefits", the disclosure as defined in the Accounting Standard are given in Note No. 53.

13.2 Value of Bonus paid Rs.11,031(P.Y. Rs.10,688)

13.3 Pension includes contributuion for Directors also.

13.4 Whole Time Directors also allowed the use of Corporation Car for Non-duty journey upto 1000 Kms per month on payment of Rs.490/520/780 per month as applicable

13.5 Actual Medical Expenses incurred towards Retired Employees including Retired Directors is Rs.3.98 Crore (P.Y Rs.3.09 Crore) and Provision for Post Retirement Medical Benefits on Actuarial Basis is Rs.17.12 Crore (P.Y Rs.0.96 Crore)

14. CONTINGENT LIABILITIES & COMMITMENT

(in Rs. Crore)

I. Contingent Liabilities not provided for 31.3.2012 31.3.2011

A Claims against the company not acknowledged as debt 1,081.63 811.14

B) Guarantees 544.49 629.35

C) Other money for which company is contingently liable 1,665.38 3,809.68

II. Commitment

A) Estimated amount of contracts remaining to be executed on capital 7.21 2.94 account and not provided for

B) Uncalled liability on shares and other investments partly paid - -

C) Other commitments (specify) - -

Note: The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

15. Trade receivables, loans & advances and other current & non-current assets include Rs.103.20 Crore (Rs.57.37 Crore) pertaining to previous years which are under dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on Government of India's accounts. Hence no provision is considered necessary.

16. Balances in parties' accounts are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

17. Current liabilities include balances that are subject to reconciliation/ confirmation and consequential adjustments.

18. Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

19. DISCLOSURE AS PER AS-15 (EMPLOYEES BENEFIT)

General description of various defined employee benefit schemes are as under:

A. Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognised as expenses and is charged to the Profit & Loss Account. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by the Government. Overall interest earnings and cumulative surplus is more than the statutory interest payment requirement.

B. Post-Retirement Medical Facility (PRMF)

The company has Post-Retirement Medical Facility (PRMF), under which retired employee and the spouse are provided medical facilities in the empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. Post retirement medical benefits are recognised in the books as per the actuarial valuation. Total actuarial liability of Rs.57.48 Crore is estimated as per actuarial valuation as on 31.03.2012 for on roll and retired employees.

C. Leave

The Company provides for Earned Leave (EL) benefit and Half Pay Leave (HPL) benefit to the employees of the Company which accrue annually at 30 days and 20 days respectively. EL subject to a maximum of 300 days is en-cashable while in service/on superannuation / death. 50% of EL subject to a maximum 150 days is en- cashable on resignation. EL is en-cashable while in service leaving a minimum balance of 15 days twice in a year. HPL is en-cashable only on superannuation/death up-to the maximum of 300 days (150 days full pay) as per the rules of the Company. The liability for EL and HPL is recognised in the books as per the actuarial valuation.

D. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 x last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs.10 Lakh on superannuation, resignation, termination, disablement or death. The liability for gratuity is recognised in the books as per the actuarial valuation.

E. Other Benefits

Service awards are given to regular employees for rendering continuous service in the Company for long service rendered by them on completion of 15/25/30/35/40 years of service. Besides this, service award @ Rs.1,000/- per year for each completed year of service is also given at the time of retirement subject to a maximum of Rs.30,000. The liability on this account is recognised in the books as per the actuarial valuation.

F. Pension

In pursuance to the guidelines issued by the Department of Public Enterprises, regarding revision of pay scales w.e.f. 01.01.2007 inter-alia providing for superannuation benefits up to 30% of basic pay plus DA including CPF, gratuity, pension and post-superannuation medical benefits, the company had formulated a pension scheme for its retiring employees. Under the scheme the employer is contributing 9% of Basic Pay DA of eligible employees.

The summarized position of various defined benefits recognized in the Profit & Loss Account and Balance Sheet are as under:

* Exposure on behalf of Business Associates

20. The company has a system of physical verification of inventories and fixed assets in phased manner at regular interval and verified with Books of Accounts and records. Differences observed, if any, are dealt with accordingly in the books.

21. As required by the Accounting Standard-28 on "impairment of Assets", the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

22. Consequent to the notification of Revised Schedule VI under Companies Act, 1956, the financial statements for the year ended 31st March, 2012 have been prepared as per Revised Schedule VI. Accordingly Figures of the previous period have been regrouped/ rearranged to make them comparable with those of the current period wherever necessary.

23. Accounting policies, Schedules and Notes on accounts attached form an integral part of the accounts.

24. Values in brackets indicate corresponding previous year figure.


Mar 31, 2011

(Rs. Lacs)

1.a. Contingent Liabilities not provided for 31.3.2011 31.3.2010

i) Claims against the Company not acknowledged as debt (excluding legal cases where amounts are unascertainable) 81114 75209

ii) Guarantees given by Banks on behalf of the Company 62935 27950

iii) Letter of Credit issued by Bank 305146 310579

iv) Sales Tax demands in dispute 70493 42996

v) Bonds given to Customs Authority 1120 100

vi) Sales Tax liability which may arise on re-assessment or assessment 214 108

vii) Estimated Tax incidence on amounts disputed in respect of Income Tax cases 2000 483

viii) Rent Air India Building 1995 1995

Note: The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

1.b. Capital Commitments pending execution 294 NIL

2. FIXED ASSETS

a) The process of issuance of sub-divided Lease Deeds in respect of STC Complex at New Delhi, residential land and flats at Mehrauli Road separately in the name of the company and its co-owners is pending. (Gross Cost of Land Rs. 104 lakh and Building Rs.2011 lakh)

b) Registration of Deeds of Conveyance in respect of 2 flats at Kolkata is pending. (Total Purchase Value Rs. 6 lakh)

c) Lease hold land valuing Rs.129 lakh at Bangalore is yet to be registered in favour of the company.

3. DEBTORS, LOANS, ADVANCES AND CLAIMS

(a) Loans and advances include a sum of Rs. 8739 lakh recoverable from one of the parties, against which the company has initiated legal actions including criminal proceedings. Yet as a measure of abundant caution, full provision has been made in the earlier years.

(b) In respect of a trading operation in Wheat, disposal of goods and recovery have not taken place as per contract for which legal actions have been initiated. Entire dues including recoverable from FCI aggregating to Rs. 5841 lakh has been provided / written off in earlier years. Further, the additional sales tax liability that may arise, for which the company has given declaration, is not ascertained.

(c) Sundry Debtors include Rs.12199 lakh (Rs.17641 lakh) of one of the Associates, which is overdue. The company is in the process of reconstruction by Asset Reconstruction Company (India) Limited (ARCIL). The dues are fully secured by pledge of Stocks. The decision to run the plant is in an advanced stage. No provision is considered necessary.

(d) Sundry Debtors include Rs.113793 lakh (Rs.90311 lakh) of one of the Associates, which include overdues of Rs.100375 lakh. The said dues are secured by pledge of stocks of Rs. 99065 lakh, Earnest Money Deposit of Rs. 3112 lakh, Corporate Guarantee of its holding company etc. As the Associate has initiated the process to sell its plant, no provision is considered necessary at this stage.

(e) Claims Recoverable include Rs. 2752 lakh towards trading loss incurred during 2010-11 on import of pulses on Government account. Further, as per minutes dated 14.02.2011 and 25.04.2011 of Ministry of Consumer Affairs, claims for 2008-09 and 2009-10 have been revised on "sold quantity basis" and differential actual trading losses of Rs.8167 lakh have been booked in the current financial year as claim recoverable from Ministry of Consumer Affairs.

(f) Sundry Debtors include Rs.56785 lakh (Rs.57942 lakh) on account of export of Pharma product to Foreign Buyers on back to back basis. The entire amount is overdue. As there is default in payments against export bills by the buyers which have ultimately gone into liquidation, litigation processes have been initiated by STC as well as by Indian Associates and their bankers. A claim of Rs.52786 lakh has been admitted by the liquidator. There is, however, a corresponding credit under back to back arrangement of Rs. 56894 lakh under sundry creditors. In view of this no provision is considered necessary.

(g) Sundry Debtors include overdues of Rs.39717 lakh (Rs.39761 lakh) against exports effected under the EXIM Bank Insurance Linked Post-shipment Credit Facility. Since there is delay in repatriation of export proceeds the company has initiated legal proceedings with defaulting associates. Repayment of some over dues have been received and with all-out efforts, which are being made, the Company is confident of full recovery hence no provision is considered necessary.

(h) Sundry Debtors include Rs.494 lakh towards reimbursement of loss in supply of PDS Items to M/s Gujarat State Civil Supply Corporation under the subsidized scheme of Government of India. As the claim is under process in Government of India, no provision is considered necessary.

(i) Debtors, loans, advances and claims include Rs.5737 lakh (Rs.1324 lakh) pertaining to previous year which are under dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on Government of India's accounts. Hence no provision is considered necessary.

(j) Balances in parties' accounts are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

(k) Claims recoverable considered good include claims lodged on Insurance Companies amounting Rs.20.65 lakh, which are in the process of acceptance/final settlements.

4. INVESTMENT

Long term investment include Rs. 282 lakh in its 100% subsidiary company namely STCL. Though the subsidiary company is having negative net worth as per its Balance Sheet as on 31st March 2010, no provision has been made, as the subsidiary company is in business and had Trading Profit during 2009-10 and also keeping in view of its long term business plan.

5. LIABILITIES

(a) Current liabilities include balances that are subject to reconciliation/ confirmation and consequential adjustments.

(b) Amount outstanding and payable to Micro, Small or Medium Enterprises - NIL (NIL).

6. OTHER TRADE INCOME

Other Income (Trade) includes Exchange Gain (net) Rs.17605 lakh (Rs.23426 lakh) comprising Rs.1752 lakh (Rs.31641 lakh) credit and Rs.4147 lakh (Rs.8214 lakh) debit. Out of this Rs16439 lakh (Rs. 21660 lakh) is on account of business associates which is adjusted against purchase/ sales as the case may be and to this extent there is no impact on the profits for the year.

7. PURCHASES & SALES

Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

8. ADDITIONAL INFORMATION PURSUANT TO PART II OF SCHEDULE-VI OF THE COMPANIES ACT,1956

a) Quantitative details in compliance of para(s) 3(i) (a), 3(ii) (a) (1) &(2), 3(ii) (b) and 4-D(c) of Part II, Schedule- VI to the Companies Act, 1956 as amended by notification No.GSR.494 (E) dated 30th October, 1973 is annexed.

9. INFORMATION ABOUT BUSINESS SEGMENT AS AT 31.03.2011 - attached.

10. RELATED PARTY TRANSACTION: 1. Key Management Personnel

i. Directors

a. Shri N. K. Mathur Chairman & Managing Director

b. Shri N. K. Nirmal Director (Finance)

c. Shri S. S. Roy Burman Director (Marketing)

d. Shri M. M. Sharma Director (Personnel)

e. Shri Khalil Rahim Director (Marketing) ii. Relatives of Directors None

Remuneration paid to Directors (Key Management Personnel) has been disclosed in Schedule - 17 (A) Overheads - Establishment

2. Subsidiary - STCL Ltd. (Wholly Owned Subsidiary)

Transactions - Advance Rent received during the year Nil (Rs.438.04 lakh)

Balance at the year end - Nil (Rs. 438.04 lakh)

The following officials of STC held key Management position in the above company:

Name of the officials Designation

Sh. NK Mathur Chairman

Sh. N.K. Nirmal Director

11. DISCLOSURE AS PER AS-15 (EMPLOYEES BENEFIT)

General description of various defined employee benefit schemes are as under:

A. Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognized as expense and is charged to the Profit & Loss Account. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by the Government. Overall interest earnings and cumulative surplus is more than the statutory interest payment requirement

B. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which retired employee and the spouse are provided medical facilities in the empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. Post retirement medical benefits are recognised in the books as per the actuarial valuation.

C. Leave

The Company provides for Earned Leave (EL) benefit and Half Pay Leave (HPL) benefit to the employees of the Company which accrue annually at 30 days and 20 days respectively. EL subject to a maximum of 300 days is en-cashable while in service/on superannuation /death. 50% of EL subject to a maximum of 150 days is en- cashable on resignation. EL is en-cashable while in service leaving a minimum balance of 15 days twice in a year. HPL is en-cashable only on superannuation/death up-to the maximum of 300 days (150 days full pay) as per the rules of the Company. The liability for EL and HPL is recognised in the books as per the actuarial valuation.

D. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 x last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs. 10 lakh on superannuation, resignation, termination, disablement or death. The liability for gratuity is recognized in the books as per the actuarial valuation.

E. Other Benefits

Service awards are given to regular employees for rendering continuous service in the Company for long service rendered by them on completion of 15/25/30/35 years of service. Beside this, service award @ Rs.1000/ - per year for each completed year of service is also given at the time of retirement subject to a maximum of Rs. 30,000/-. The liability on this account is recognised in the books as per the actuarial valuation.

F. Pension

In pursuance to the guidelines issued by the Department of Public Enterprises, regarding revision of pay scales w.e.f. 1.1.07 inter-alia providing for superannuation benefits up to 30% of basic pay plus DA including CPF, gratuity, pension and post-superannuation medical benefits, the company had formulated a pension scheme for its retiring employees. Under the scheme the employer is to contribute 9% of Basic Pay D.A of eligible employees.

The Pension Scheme has been approved by Govt. of India. The process for implementation of the Pension Scheme including creation of trust is on in consultation with LIC. A provision of Rs. 464 lakh (Rs. 931 lakh) has been made on estimated basis for the year.

12. GENERAL

a) The company has a system of physical verification of inventories and fixed assets in phased manner at regular interval and verified with Books of Accounts and records. Differences observed, if any, are dealt with accordingly in the books.

b) As required by the Accounting Standard-28 on "impairment of Assets", the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

c) Wherever necessary, previous year's figures have been re-arranged/re-grouped to make them comparable with those of the current year.

d) Accounting policies, Schedules and Notes on accounts attached form an integral part of the accounts.

e) Values in brackets indicate corresponding previous year figure.


Mar 31, 2010

(Rs. Lacs)

1A. CONTINGENT LIABILITIES NOT PROVIDED FOR 31.3.2010 31.3.2009

i) Claims against the Company not acknowledged as debt (excluding legal cases where amounts are unascertainable) 75209 13386

ii) Guarantees given by Banks on behalf of the Company 27950 868

iii) Letter of Crdit issued by Bank 310579 344500

iv) Sales Tax demands in dispute 42996 13352

v) Bonds given to Customs Department 100 100

vi) Sales Tax liability which may arise on re-assessment or assessment 108 108

vii) Estimated Tax incidence on amounts disputed in appeal by Income Tax Department 483 327

viii) Bills Discounted - 445

ix) Rent Air India Building 1995 1995

x) Bill of exchange accepted (raised by Rajat Pharma Limited, Mumbai) 23491 23491

Note: The above claims/demands are at various stages of appeal and in the opinion of the company are not tenable. Further, in some of the cases amounts included under contingent liabilities relate to commodities handled on Government of India account and liability, if any, would be recoverable from Government of India.

1.B. Capital Commitments pending execution NIL NIL

2. FIXED ASSETS

a) The process of issuance of sub-divided Lease Deeds in respect of STC Complex at New Delhi, residential land and flats at Mehrauli Road separately in the name of the company and its co-owners is pending. (Gross Cost of Land Rs. 104 lacs and Building Rs. 2005 lacs)

b) Registration of Deeds of Conveyance in respect of 2 flats at Kolkata is pending. (Total Purchase Value Rs. 6.00 lacs)

3. DEBTORS, LOANS, ADVANCES AND CLAIMS

(a) In respect of two trading contracts, the Company paid Rs. 18055 lacs to Neyveli Lignite Corporation Ltd. (A Govt. of India Undertaking) on behalf of two Associates against sale of scrap to be obtained from certain plants to be dismantled. The plants have yielded/expected to yield scrap for lower value and in respect of one of the contracts, it would not cover the trade finance of Rs. 14979 lacs provided by the Company. Though the Company for recovery of its dues of Rs. 8743 lacs (after adjustment of EMD and sale proceeds out of scrap) has initiated all legal actions including criminal proceedings, yet as a measure of abundant precaution, full provision been made in the earlier years. Further, the company may be liable for Rs. 108 lacs on account of state sales tax, if the company is unable to prove the sale as resale of scrap. The same has been taken as contingent liability.

(b) In respect of a trading operation in Wheat undertaken for an associate Priyanka Overseas Private. Limited, New Delhi (POPL), disposal of goods and recovery have not taken place as per contract due to quality problems and there were undisposed stocks of wheat and unrecovered amounts outstanding from the Associate and Supplier viz., FCI. Also, cases of theft and misappropriation of unlifted stocks exported to Bangladesh have come to notice for which legal actions have been initiated. Guarantee of Rs 250 lacs has been invoked; post dated cheques of Rs. 2000 lacs were presented to the bank which was dishonored stating "insufficient funds". A criminal complaint under Section 138 of the Negotiable Instrument Act against POPL and its directors has been filed. The company has also initiated arbitration/legal proceedings against POPL for recovery of dues. Stocks to the extent of Rs. 547 lacs have been written off during the financial year 2006-07. Entire dues including recoverable from FCI aggregating to Rs. 5841 lacs has been provided / written off in earlier years.

(c) In respect of the wheat trading referred in (b) above, the company had met the export commitment made to the supplier FCI through other wheat export transactions with the concurrence of FCI. However, FCI is seeking to recover price differential considering the sale as inter-state sale at Open Market Sales Scheme (Domestic) for Wheat instead of the concessional prices charged for exports. The Company has also given a declaration for payment of additional sales tax liability that may arise in respect of the export transactions. Additional liability on account of the above account not ascertained.

(d) These include Rs 1324 lacs (Previous year Rs. 1285lacs) being amounts carried over from earlier years some of which are subject matter of dispute/litigation. In some cases, there are corresponding payments withheld or receivables relating to commodities handled on Government of Indias accounts. No provision in respect of these dues is considered necessary at this stage.

(e) Balances in parties accounts are subject to reconciliation/confirmation in many cases and are subject to adjustments that may arise on reconciliation.

(f) Claims recoverable considered good include claims lodged on Insurance Companies, which are in the process of acceptance/final settlements.

(g) Sundry Debtors include Rs. 17641 lacs (previous year Rs 15482 lacs) due from Jhagadia Copper Limited on account of Letters of Credit paid against import of Raw Material. The company had gone into liquidation and now is in the process of reconstruction by Asset Reconstruction Company (India) Limited (ARCIL). The dues are secured by pledge of Stocks (Value as on 31.03.2010 Rs. 17000 lacs) and a unexpired Bank Guarantee of Rs. 5400 lacs furnished by the company towards Margin Money. The stocks are under the custody of CWC on behalf of the company. The said dues are, therefore, considered Secured and no provision is required as on 31.03.2010.

(h) Sundry Debtors include Rs. 54387 lacs (previous year Rs 77492 lacs) due from Kremikovtzi A.D., Bulgaria. The company had gone into liquidation in June, 2008. The said dues are secured by Cheques and Corporate Guarantee of Global Steel Holdings Limited, the holding company. The holding company has also given Share Certificates of its another wholly owned subsidiary Global Steel Works International (SPV-AMC) Phillipines, approximately valuing USD 100 millions for pledging. The asset value of the said subsidiary company as on 31.03.2006 was USD 830 millions. The entire dues including interest thereon have been recovered during 2010-11. Hence no provision is required as on 31.03.2010.

(i) Sundry Debtors include Rs. 90311 lacs (previous year Rs. 72902 lacs) due from Global Steel Phillipine. The said dues include overdue amount of Rs. 37939 lacs out of which Rs 22141 lacs pertain to year 2008- 09. The said dues are secured by pledge of stocks of Rs. 74352 lacs (value as on 31.03.2010) and Earnest Money Deposit of Rs. 6742 lacs. The stocks are under the custody of CWC on behalf of the company.

The dues are further secured by Cheques and Corporate Guarantee of Global Steel Holdings Limited, the holding company (GSHL). Further, GSHL has also allowed to retain share certificates of its wholly owned subsidiary company Global Steel Works International (SPV-AMC) Phillipines, approximately valuing for USD 100 million. The said dues are therefore considered good and no provision is required as on 31.03.2010.

(j) The company had suffered a trading loss of Rs. 21150 lacs during the year 2008-09 on Import of pulses on Government account and, as per the Scheme, booked Rs 11463 lacs only as claim receivable from the Government (trade margin 1.2% and losses 15%). However, the company had submitted the claim for reimbursement of entire trading loss along with interest. The claim of difference is still pending with the Government.

(k) Sundry Debtors include Rs. 57942 lacs (previous year 57942 lacs) on account of export of pharma product to Loben Trading Co. Pte. Ltd. and Sweetland Trading Co Pte Ltd, Singapore (the buyers) under Credit Insurance Scheme on back to back basis with Rajat Phamachem Ltd. (RPL). The entire amount is over due. It is understood that RPL has drawn post shipment funding from their bankers on basis of conditional acceptance of Bills of Exchange/Invoices by the company. As there is default in payments against export bills by the buyers, litigation processes have been initiated by STC as well as by RPL and their bankers, which is being pursued in consultation with our lawyers. A claim of Rs. 52786 lacs has been admitted by the liquidator of Loben Trading Co. Pte. Ltd. the company which has gone into liquidation. The said dues include Rs. 1157 lacs on account of trading margin, recoverability of which appears doubtful, hence the same has been provided during the year.

(l) Sundry Debtors include over dues of Rs. 39761 lacs (USD 89.07 millions) against exports effected under the EXIM Bank Insurance Linked Post-shipment Credit Facility on 120 days D.A. basis. There are delays in repatriation of export proceeds from the foreign buyers in view of slumps in Jewellery and construction sector in UAE, where most of the buyers are based. The associates, who are contractually liable for repatriation of export proceeds as well as the foreign buyers have sought some more time to release the proceeds. STC is negotiating with EXIM Bank to get additional time ranging between 2 to 5 years to recover the dues from foreign buyers/their associates and repay the same to EXIM Bank. The company holds the signed/stamped Bills of Exchange and Invoices duly accepted by all the Foreign Buyers. Associates have offered additional collaterals to the company, and the same is being processed. The company is confident of full recovery hence no provision is required in this regard.

(m) In respect of import of 3,20,563.011 MTs Urea from M/s. Helm Dungemittel, GMBH, Hamburg, Germany in the year 2008-09 for & on behalf of the Govt. of India (Department of Fertilizers ), the supplier had agreed to a reduced price of USD 359.00 PMT for supplies made over & above 3 Lac MTs as against the contractual rate of USD 685.50 PMT. Since the supplier charged price of USD 685.50 PMT for the entire supplies, STC recovered an amount of Rs. 3305 lacs for the price overcharged by the party on the additional quantity of 20,563.011 MTs by invoking the Bank Guarantee submitted by them. As the supplier has gone for litigation against STC the same has been disclosed under Contingent Liabilities.

(n) During the year 5845 MT of Pulses (Yellow Peas and Dun Peas) valuing Rs. 1047 lacs was damaged at Kolkata due to Cyclone followed by heavy rains in May 2009. Salvage value of Rs. 128 lacs was realised against the damaged stock of pulses, leaving a loss of Rs. 919 lacs. Due to uncertainty relating to ultimate realization, the claim has not been recognised in the books.

4. DEFERRED TAX

In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income", the company has Deferred Tax Assets of Rs. 7340.53 lacs as on 31.03.2010 (previous year Rs. 6117.36 lacs). There is reasonable certainty that sufficient future taxable income will be available against which the deferred tax asset can be realised. The breakup of deferred tax assets is as under:

5. LIABILITIES

a) Current liabilities include balances that are subject to reconciliation/confirmation and consequential adjustments.

b) Amount outstanding and payable to Micro, Small or Medium Enterprises - NIL (Previous Year - NIL).

6. OTHER TRADE INCOME

a) Other Income (Trade) - Claims include Rs. 10021 lacs being price differential adjustment debited to associates as per back-to-back arrangements in respect of coal import during 2008-09. It has no impact on the profits for the year.

b) Other Income (Trade) - Exchange Gain (net) Rs. 23426 lacs includes Rs. 31641 lacs Credit and Rs. 8214 lacs Debit out of which Rs. 21660 lacs is on account of business associates which is adjusted against purchase/ sales as the case may be, to this extent there is no impact on the profits for the year.

7. PURCHASE & SALES

a) Purchases and Sales mainly represent procurement and/or supply undertaken for and on behalf of Business Associates by the Company on a fixed trade margin where the ultimate beneficiary is the Associate who is also liable to indemnify the losses, if any. The recognition is based on the legal and contractual obligations assumed by the Company and the transfer of title to the goods passing through it under the contract.

b) In respect of coal supplied to NTPC from Ahmedabad branch, Purchases and Sales quantity of coal is subject to reconciliation and any shortages/excess is to be provided for in the books at the year end in the respective party account. Branch is following the system of booking of sales in the books of accounts on the basis of receipt of of quantity at the T.P.S. of NTPC Ltd. Branches are consistently following this system since previous years.

8. ADDITIONAL INFORMATION PURSUANT TO PART II OF SCHEDULE-VI OF THE COMPANIES ACT,1956

a) Quantitative details in compliance of para(s) 3(i) (a), 3(ii) (a) (1) &(2), 3(ii) (b) and 4-D(c) of Part II, Schedule-VI to the Companies Act, 1956 as amended by notification No.GSR.494 (E) dated 30th October, 1973 is annexed.

b) The Company does not have any manufacturing unit or facility of its own as such information regarding licensed/installed capacity are not applicable.

9. INFORMATION ABOUT BUSINESS SEGMENT AS ON 31.03.2010 – attached.

10. RELATED PARTY TRANSACTION: 1. Key Management Personnel

i. Directors

a. Shri N. K. Mathur Chairman & Managing Director

b. Shri N. K. Nirmal Director (Finance)

c. Shri S. S. Roy Burman Director (Marketing)

d. Shri M. M. Sharma Director (Personnel)

e. Shri Khaleel Rahim Director (Marketing)

ii. Relatives of Directors None

Remuneration paid to Directors (Key Management Personnel) has been disclosed in Schedule – 17 (A) Overheads - Establishment

2. Subsidiary - STCL Ltd. (Wholly Owned Subsidiary)

Transactions - Advance Rent Received during the year Rs. 438.04 Lacs Balance at the year end - Rs. 438.04 Lacs

3. The following officials of STC held key Management position in the above company:

Name of the officials Designation

Sh. N.K. Mathur Chairman

Sh. N.K. Nirmal Director

12. DISCLOSURE AS PER AS-15 (EMPLOYEES BENEFIT)

General description of various defined employee benefit schemes are as under:

A. Provident Fund

Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognized as expense and is charged to the Profit & Loss Account. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specified by the Government. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary.

B. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which retired employee and the spouse are provided medical facilities in the empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. Post retirement medical benefits are recognised in the books as per the actuarial valuation.

C. Leave

The Company provides for Earned Leave (EL) benefit and Half Pay Leave (HPL) benefit to the employees of the Company which accrue annually at 30 days and 20 days respectively. EL subject to a maximum of 300 days are en-cashable while in service/on superannuation /death. 50% of EL subject to a maximum of 150 days is en- cashable on resignation. EL is en-cashable while in service leaving a minimum balance of 15 days twice in a year. HPL is en-cashable only on superannuation/death up-to the maximum of 300 days (150 days full pay) as per the rules of the Company. The liability for EL and HPL is recognised in the books as per the actuarial valuation.

D. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 x last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs. 10 lacs on superannuation, resignation, termination, disablement or death.

E. Other Benefits

Service awards are given to regular employees for rendering continuous service in the Company for long service rendered by them on completion of 15/25/30/35 years of service. Beside this, service award @ Rs.1000/- per year for each completed year of service is also given at the time of retirement subject to a maximum of Rs. 30,000/- . The liability on this account is recognised in the books as per the actuarial valuation.

F. Pension

The company is in the process of formulating a pension scheme for its employees based on the guidelines issued by the Department of Public Enterprises consequent upon revision of pay scales with effect from 1st January 2007, which interalia provide for superannuation benefits @ 30 % of basic pay plus DA and include CPF, gratuity, pension and post-superannuation medical benefits. A provision of Rs. 931 lacs has been made on estimated basis during the year.

The above mentioned schemes (C, D and E) are unfunded and recognised in the books on actuarial valuation. The summarized position of various defined benefits recognised in the Profit & Loss Account and Balance Sheet are as under:

2. GENERAL

a) The company has a system of physical verification of inventories and fixed assets in phased manner at regular interval and verified with Books of Accounts and records. Differences observed, if any, are dealt with accordingly in the books.

b) As required by the Accounting Standard-28 on "impairment of Assets", the company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

c) Wherever necessary, previous years figures have been re-arranged/re-grouped to make them comparable with those of the current year.

d) Accounting policies, Schedules and Notes on accounts attached form an integral part of the accounts.

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