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Notes to Accounts of State Trading Corporation Of India Ltd.

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.

 
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