Directors Report of State Trading Corporation Of India Ltd.
Mar 31, 2018
The Board of Directors presents the 62nd Annual Report on the business and operations of the Company and its Audited Statement of Accounts for the year ended March 31, 2018 together with the Auditors'' Report and Comments on the Accounts by the Comptroller and Auditor General (CAG) of India.
FINANCIAL RESULTS
The performance of the Company during the year 2017-18 vis-a-vis the previous year is summarized in the table below:
(Rs,Crore)
|
2017-18 |
2016-17 |
|
|
TURNOVER |
||
|
Exports |
266 |
789 |
|
Imports |
10216 |
6382 |
|
Domestic |
343 |
581 |
|
Grand Total |
10825 |
7752 |
|
FINANCIALS |
||
|
Profit Before Tax |
32 |
(-)150 |
|
Profit After Tax |
38 |
(-)166 |
|
Net Worth (incl. revaluation reserves) |
931 |
890 |
OPERATIONS AND BUSINESS PERFORMANCE
During 2017-18, your company recorded a business turnover of Rs,10825 crores as against Rs,7752 crores achieved in 2016-17. The increase in turnover was mainly due to higher bullion sales.
DIVIDEND
In view of the crisis faced by company on account of current liquidity crunch, low net worth, higher borrowing costs and the consequential need to conserve cash, the Board of Directors have not recommended any dividend for the year 2017-18.
OTHER EQUITY (RESERVES)
An amount of Rs,830.15 crore (excluding revaluation reserves of Rs,884.60 crore) was available in the Reserves and Surplus of the Company as on 1st April 2017. An amount of Rs,40.67 crore (PAT: Rs,37.52 crore and other comprehensive income: Rs,3.15 crore) is being retained as surplus in the Balance Sheet. Accordingly, as on 31st March 2018, the equity capital stood at Rs,870.81 crore.
HUMAN RESOURCE
STC had 591 employees on its rolls as on 31.03.2018, which included 402 officers and 189 staff members. During the year, the Company recruited 3 Finance Professionals in the executive cadre.
Industrial Relations
During the year 2017-18, the company continued to maintain cordial harmonious industrial relations. No man-days were lost due to any labour unrest. Personnel policies and welfare schemes were suitably improved / amended so as to bring them in line with the overall business interests of the Company.
Recruitment of SC/ST/OBC/PWD
The Company has been following the Government of India policy for reservation/recruitment for SCs/STs/OBCs and PWD.
Employees'' Learning & Development
With a view to enable employees to fulfill their potential and help them in their career progression, domain specific training opportunities and behavioural programmes were organized. During the year, around 206 employees were imparted training in different spheres. Besides, a six day induction training programme for recently recruited executives was organised at 11 FT, New Delhi, wherein 29 executives participated.
In all, 235 employees were imparted training during the year wherein 486 man-days were dedicated.
STC''S performance in terms of MOU 2017-18 with respect to HRM Parameters:
- One of the HRM parameters for MoU 2017-18 was for holding DPC without delay for executives (E0 and above level), which was successfully completed as all DPCs from E1 to E8 level were held without delay in 2017-18.
- Another HRM parameter was preparation of succession plan and its approval by Board of Directors before 31.12.2017. The Succession Plan of the Corporation was successfully prepared and approved by Board of Directors in its 617th meeting held on 13.12.2018.
- With a view to develop a robust and transparent Performance Management System (PMS) as part of MoU target for the year 2017-18, online PMS has been introduced, and has been successfully implemented in the Corporation in respect of all executives (E1-E8) within prescribed timelines w.e.f. 08.02.2018 in compliance of MoU 2017-18 target.
- A week long (six day) Management Development Programme on "International Business" was conducted from March 12-17, 2018 for further enhancing/ upgrading the skills of 29 newly recruited executives (i.e. 7.21% of the total executives) through IIFT, New Delhi a Centre of Excellence set up in 1963 by Govt. of India as an Autonomous organization.
OFFICIAL LANGUAGE
The Company has been making continuous efforts in implementation of official language policy of the Govt. of India. In order to achieve the targets, employees have been given training on working in Hindi on computers. Besides, they are provided necessary information on various aspects of official language through regular workshops conducted in Hindi. Raj Bhasha Fortnight was organized during September, 2017 in which employees were motivated towards use of official language Hindi through various Hindi competitions / programmes. On the occasion of Hindi Divas on 14th September 2017, winners of Hindi Competitions were given awards. In addition, employees contributing significantly to the execution of official language Hindi were given cash prizes under Official Language Encouragement Scheme. Divisions and Branch offices performing outstanding in the area of execution of official language were facilitated with Raj Bhasha Shield.
VIGILANCE ACTIVITIES
Vigilance plays a vital role in the adoption and implementation of best practices of Corporate Governance and ethics in the Company. During the year, Vigilance Division of the Company played an important role in sensitizing the employees about the preventive action to be taken while handling trade proposals and took measures to improve the existing system and processes.
Steps were also taken for systemic improvement in the areas of record management, defining of the role and responsibility of executives and scrutiny of APRs etc. Regular and surprise checks were conducted, in addition to 7 CTE type inspections to check proper implementation of STC''s trade guidelines. Vigilance team also carried out detailed inspection of Chennai Branch during August 2017. Remedial measures were taken to expedite timely completion of investigations and disciplinary proceedings.
The Company observed Vigilance Awareness Week, 2017 from 30th October to 4th November, 2017 at Corporate Office and Branch Offices. The theme of the Vigilance Awareness Week was "My Vision- Corruption Free India". Laying stress for creation of awareness on the ill effects of corruption amongst school and college students, various outreach activities viz. quiz competitions, debates/elocution were also conducted.
Three training programmes on ''Vigilance Clearance'', ''Role & responsibility of PO'', and ''Role of Employees in maintaining integrity in the Organization'', were organized for the executives of the Corporation during the year 2017-18.
With a view to create awareness about the rules and procedures of the Company and about new developments taking place in the area of vigilance administration, Vigilance Division issued a quarterly e-newsletter "NAI DISHA"
During the year 2017-18, a total of 9 cases have been disposed off and action on remaining 22 cases is in progress as on 31.03.2018.
PERFORMANCE OF SUBSIDIARY COMPANY STCL Ltd. (Formerly, Spices Trading Company Limited)
In view of extraordinary losses suffered by STCL leading to erosion of its net worth and keeping in view the remote possibility of its turnaround, the Union Cabinet had, in August 2013, decided to wind up STCL. Accordingly, a winding up petition was filed by STCL before the Hon''ble High Court of Karnataka and the same continues to be pending due to objections by Banks.
At present, STCL has 11 employees on its rolls. Due to above developments, no business operations were undertaken by STCL during the year.
The company incurred a loss of 657 crore (unaudited) during 2017-18 mainly on account of the interest accrued on outstanding loans and had a negative net worth of 4562 crore (unaudited) as on 31.03.2018.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the requirement of Regulation 34(2) of schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015, a detailed Management Discussion and Analysis Report forming part of the Annual Report of the Company is placed at Annexure-I.
EXTRACT OF THE ANNUAL RETURN
As required under Section 134(3) (a) of the Companies Act, 2013, an extract of the Annual Return pursuant to Section 92(3) of the Act is annexed to this Report at Annexure-II.
ANTI SEXUAL HARASSMENT POLICY
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee is set up to redress complaints received in this regard. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year, two complaints of sexual harassment were received. While one complaint has been disposed of in the financial year 2018-19, the interim report of the second complaint has been submitted to the Disciplinary Authority.
RIGHT TO INFORMATION
In order to promote transparency and accountability, an appropriate mechanism is in place in the Company to provide information to citizens under the provisions of Right to Information (RTI) Act, 2005.
DEPOSITS
The Company has not accepted any deposits from Public. Therefore, the requirement of Chapter V of the Companies Act, 2013 is not applicable to it.
There were no outstanding public deposits pending as on 01.04.2017.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the year, the company has not provided/given any loans, guarantees or made any investment as specified under section 186 of the Companies Act, 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 IN THE PRESCRIBED FORM
The company has not entered into any contracts or arrangements with related parties as referred to in subsection (1) of section 188 of the Companies Act, 2013. All transactions entered by the company with related parties were in the ordinary course of business and not at Arm''s length basis.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY
As per DPE guidelines & provisions of Companies Act, 2013, the budgetary allocation of CSR is based on the profitability of the company. During the year 2016-17, the Company incurred a loss of Rs,150 crore and average net profit of immediately preceding last three financial years was negative. Thus, no budget allocation was made for CSR during the year 2017-18 as per CSR Rules.
An amount of Rs,15.11 lakh accrued from previous years was carried forward in the year 2017-18, out of which, an amount of Rs,13.60 lakh was contributed to "Swacch Bharat Kosh" and an amount of Rs,0.75 lakh was allocated to "Capacity Building" projects Another Rs,0.75 lakh was kept for contribution to Emergency Needs, however, the amount could not be utilized as need did not arise. This amount will be carried forward in the next year 2018-19 for the same purpose and it will be utilized as and when need arises.
An annual report on Company''s CSR activities in prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is placed at Annexure âIII.
PUBLIC PROCUREMENT POLICY
In pursuance of the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 notified by Ministry of Micro, Small and Medium Enterprises vide their Order dated 23rd March 2012, the Company had set an annual target of making a minimum 20 percent of its annual procurement of goods and services from MSEs, including 4 percent from MSEs owned by SC or ST entrepreneurs.
During the year 2017-18, the Company made procurement worth Rs,1.93 crore from MSEs, which accounted for 54% percent of total value of annual procurement made by STC of goods produced and services rendered by MSEs as against 20% target specified in the guidelines. Out of this, procurement from SC/ST entrepreneur stood at Rs,0.31 lakh i.e 16% as against a sub-target of 4%.
During the year 2018-19 also, the Company shall strive to achieve the annual procurement target of 20 percent of goods and services produced/rendered by MSEs, including 4 percent from MSEs owned by SC or ST entrepreneur.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
The information required to be disclosed in accordance with the Companies (Accounts) Rules, 2015 is Rs,nil'' as the Company is mainly engaged in trading activities.
FINANCIAL ACCOUNTING
The Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles (GAAP) and in compliance with all applicable Indian Accounting Standards (Ind-AS) issued by The Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs vide notification dated 16.02.2015 and Companies Indian Accounting Standards Rules 2015. These Indian Accounting Standard (Ind-AS) are applicable to the Company with effect from 01.04.2017 with transition date 01.04.2016. Accordingly, these financial statements for the year ended 31.03.2018 are first financial statements prepared by the Company in accordance with Ind-AS. The figures of previous year ended 31.03.2017 and figures of transition date i.e. 01.04.2016 have been re-stated as per the requirements of Ind-AS to make comparable and Ind-AS complied.
Considering the above requirements, the company has implemented Ind-AS during the financial year 2017-18 with the transition date being 01.04.2016. Detailed disclosures regarding first time adoption of Indian Accounting Standard, transition from IGAAP to Ind-AS and reconciliation of equity and assets is given at Note no.36 of the financial statements. Further, as per Ministry of Corporate Affairs (MCA) notification, the financial statements have been prepared as per the format prescribed under the schedule III (Division II) of the Companies Act 2013.
INTERNAL FINANCIAL CONTROLS
The Company has in place well-established internal financial controls. The Company has a well-defined Delegation of Powers (DOP), which lays down the financial powers available to various levels of company''s executives. The DOP helps facilitate faster and prudent commercial decision-making by executives at various levels. During the year , the DOP was suitably amended from time to time to match accountability with authority considering the prevailing requirements.
The Company has an Internal Audit Division, supported by an outside professional Chartered Accountant firm, which conducts internal audit of company''s corporate office as well as branches and suggests various preventive and corrective steps. The audit observations are periodically reviewed by the Management Audit Committee and the Audit Committee of the Board of Directors issues necessary directions, wherever required.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2017-18, nine meetings of the Board of Directors were held and the interval between any two Board meetings did not exceed 120 days.
DECLARATIONS GIVEN BY INDEPENDENT DIRECTOR
All the Part-time Non-official Directors (Independent Directors) have affirmed that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013, for the financial year ending 31.03.2018
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION ETC.
STC being a Government company, all members of the Board are appointed by the President of India through Administrative Ministry i.e. Ministry of Commerce & Industry, Govt. of India, which inter-alia fixes the remuneration through their respective appointment orders/pay fixation orders. The non-executive part-time official Directors (Government nominees) are not entitled for any remuneration or sitting fee on monthly basis. The part-time non-official (Independent) Directors are paid sitting fee for each Board / Committee meetings attended by them at the rate as per provisions of the Companies Act, 2013 and as approved by the Board from time to time.
The eligibility criterion for appointment of Independent Directors is laid down by the Department of Public Enterprises, Govt of India. The positive attributes expected to be exhibited by the Independent Directors are conveyed to them on their appointment and a declaration in the appropriate performa is obtained from them every year to confirm that they continue to qualify as Independent Director
ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Companies Act, 2013 provides exemption to the Government Companies with respect to evaluation of Board and its Directors. However, evaluations of the directors are done by administrative ministry. The performance of the Company and Board of Directors are evaluated by the Department of Public Enterprises vis-a-vis MOU entered into with the Government of India.
RISK MANAGEMENT POLICY
A Board approved Risk Management Framework has been put in place to add objectivity to the process of risk management while taking a decision on accepting or rejecting a trade proposal. The Risk Management Framework measures the various risk involved in a business proposal in the form of a total risk score which is weighed vis-a-vis available risk mitigation measures.
Further, the company has implemented an Anti-Fraud Policy in order to control and to help in prevention and detection of frauds in the Company. The Policy intends to promote consistent legal and ethical organizational behavior by assigning responsibility for the development of controls, and providing guidelines for reporting and conduct of investigations of suspected fraudulent behavior.
HEDGING
The Company does not take exposure in volatile commodities/ market condition. Generally, it makes purchases only against confirmed orders backed by appropriate margin money by way of EMD.
Guidelines are in place requiring forward foreign exchange cover to be taken in respect of transactions involving STC funds.
CORPORATE GOVERNANCE
The Company believes that Corporate Governance is at the root of the shareholders'' value creation. Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidelines on Corporate Governance for CPSEs issued by the Department of Public Enterprises (DPE), Govt of India, a Report on Corporate Governance for the year 2017-18 forming part of this report is placed at Annexure-IV The Company has complied with the conditions of Corporate Governance as stipulated in the above referred Regulations and DPE guidelines on Corporate Governance for CPSEs. Compliance certificate from the practicing Company Secretary in this regard and Management replies thereto, forming part of this Report, are placed at Annexure -V.
The Company has got its Secretarial Audit for the financial year ended 31st March, 2018 conducted by practicing Company Secretaries M/s PC. Jain & Co. and their report along with Management replies to the observations made by Secretarial Auditors, forming part of this Annual Report, is placed at Annexure -VI.
In line with the best practices, your Company has made available all information of interest to its investors on the Company''s Corporate website, namely, www.stclimited.co.in
The Company has also put in place various policies such as:
- Whistle Blower Policy
- Web Archival Policy
- Policy on Preservation of Documents
- Policy on Materiality of Related Party Transactions and dealings with Related Party Transactions
- Policy for determination of materiality of events and information and their disclosures.
- Policy for determining material subsidiaries.
The above policies are also available on STC''s website.
The separate meeting of Independent Directors were held on 28.11.2017 and 20.03.2018 at the registered office of the Company.
STATUTORY AUDITORS
M/s P Jain & Company, Chartered Accountants were appointed as Statutory Auditors of the company for the financial year 2017-18 by the Comptroller & Auditor General of India (C&AG). Their report, along with replies of the Management, is attached and forms part of this report.
COMMENTS OF C&AG
The comments of C&AG under Section 143(6) of the Companies Act, 2013 on the accounts of the Corporation for the year 2017-18 and replies of the management thereto are attached and form part of this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, in relation to Directors'' Responsibility Statement, it is hereby confirmed that:
(a) in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable Indian Accounting Standards (Ind-AS) have been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for the year 2017-18;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis for the year ended 31st March, 2018;
(e) the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
BOARD OF DIRECTORS Appointment
Since the last Annual General Meeting, Shri Sunil Kumar, Additional Secretary, Department of Commerce, Ministry of Commerce & Industry, Govt. of India was appointed as Part Time Official Director on the Board of STC w.e.f. 21.10.2017 pursuant to Office Order dated 28.09.2017 issued by the Government of India, Ministry of Commerce & Industry, Department of Commerce, and as per provisions of the Companies Act, 2013
Pursuant to Order dated 28.12.2017 of Government of India, Ministry of Commerce & Industry, Department of Commerce and as per provisions of the Companies Act, 2013, Shri Umesh Sharma (holding DIN 03298909), Director (Finance)
MMTC was assigned the charge of Director (Finance) STC in addition to his existing charge. Accordingly, Sh. Umesh Sharma assumed the charge of Director (Finance) STC w.e.f. 04.01.2018.
Shri S.C. Pandey Special Secretary & Financial Advisor, Department of Commerce, and Ministry of Commerce & Industry was appointed as Part time Official Director on the Board of STC Pursuant to Office Order dated 16.03.2018 issued by the Government of India, Ministry of Commerce & Industry, Department of Commerce and as per provisions of the Companies Act, 2013 w.e.f. 27.03.2018.
As per Section 161, other applicable provisions of the Companies Act, 2013, and Article 79(4) of the Articles of Association of the Company, these Directors will hold office up to the next Annual General Meeting of the Company and are eligible for appointment by the Company at that meeting as a Director.
The Board welcomes all the new Directors and hopes that the Company shall immensely benefit from their rich and varied experience.
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri S.K. Sharma, Director (Personnel) and Shri P. K. Das, Director (Marketing) shall retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.
As per Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a brief resume of all Directors seeking appointment/re-appointment are given in the notice convening the 62nd Annual General Meeting of the Company.
Cessation
Shri Inder Jit Singh, AS, DoC, who was appointed as Director w.e.f. 10.11.2016, ceased to be Director pursuant to Office Order dated 28.09.2017 issued by the Government of India, Ministry of Commerce & Industry, Department of Commerce.
Sh. Jitendra Kumar Dadoo, AS&FA, DoC, who was appointed as Director w.e.f. 06.08.2015 ceased to be Director pursuant to Office Order dated 16.03.2018 issued by the Government of India, Ministry of Commerce & Industry, Department of Commerce.
The Board appreciates the efforts and valuable contributions put in and guidance provided by Shri Inder Jit Singh and Shri J.K. Dadoo, during their tenure as Members of the Board of STC.
KEY MANAGEMENT PERSONNEL
The Company has nominated its CMD, all Functional Directors and Company Secretary as Key Management Personnel pursuant to Section 203 of the Companies Act, 2013.
COMMITTEES OF DIRECTORS
Pursuant to the provisions of various Sections of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company have constituted various Committees of Directors like Audit Committee, Stakeholders Committee, Relationship Committee, CSR Committee, Nomination & Remuneration Committee. The composition of these committees & other details are mentioned in the Corporate Governance Report forming part of and annexed to the Directors'' Report
CODE OF CONDUCT
Pursuant to the requirements of Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 and DPE guidelines on Corporate Governance for CPSEs, the Board Members and Senior Management Personnel have affirmed compliance to the Code of Conduct for the financial year ending 31st March 2018.
ACKNOWLEDGEMENT
The Board of Directors would like to acknowledge and place on record its sincere appreciation of the continued patronage and the confidence posed by business associates and customers during the year.
The Board expresses and places on record its gratitude for the continued co-operation and support provided by the Ministry of Commerce and Industry, other Ministries and Departments of the Government of India, various state governments, financial institutions, banks, railways, ports, regulatory and statutory authorities, shareholders, legal advisers and consultants from time to time.
The Board also acknowledges the constructive suggestions received from Comptroller & Auditor General of India, Statutory Auditors and Internal Auditors.
Last but not the least, the Board places on records its appreciation for the hard work and dedication of all the employees of the Company.
For and on behalf of the Board of Directors
sd/-
(Rajiv Chopra)
Chairman & Managing Director
(Additional Charge)
DIN 06466326
New Delhi
Date: 10th August, 2018
Mar 31, 2013
The Board of Directors of your Company is pleased to present the 57th
Annual Report and Audited Statement of Accounts for the year ended 31st
March 2013, together with the Auditors Report and Comments on the
Accounts by the Comptroller and Auditor General (C&AG) of India.
FINANCIAL RESULTS
The overall performance of the Corporation vis-a-vis the previous year
is summarized in the table given below:
Rs. Crore
2012-13 2011-12
TURNOVER
Exports 1563 344
Imports 17015 29961
Domestic 120 139
GRAND TOTAL 18698 30444
FINANCIALS
Profit Before Tax 14 18
Profit After Tax 18 16.5
DIVIDEND 12 12
Net Worth 590 682
OPERATIONS AND BUSINESS PERFORMANCE
The Corporation achieved a turnover of Rs.18,698 crore during 2012-13
as against Rs.30,444 crore in 2011-12. During the year, the
Corporation effected higher exports than any of the preceding three
years. The overall turnover was lower mainly due to decline of Rs.9765
crore in the imports of coal and Rs.6647 crore in the imports of
bullion. The Profit After Tax (PAT) during the year amounted to Rs.18
crore - 9% higher than the previous year.
DIVIDEND
The Board of Directors have recommended a dividend of Rs.2 per share
(i.e 20% of the paid up equity) amounting to Rs.12 crore for the year
2012-13 which is the same as paid during 2011-12. The Dividend payout
including dividend distribution tax accounts for 78% of profit after
tax for the year 2012-13.
RESERVES
An amount of Rs.622 Crore was available in the Reserves and Surplus of
your Company as on 1st April 2012. During the year 2012-13, write-off
and provisions of Rs.155.23 crore (net of write-backs) have been made
in the accounts as a matter of prudence. However, write off to the
extent of Rs.95.96 crore have been offset against transfer from Export/
Import Contingency Reserve. Your Directors have proposed that out of
post-dividend profits of Rs.3.91 crore for the year 2012-13, an amount
of Rs.1.79 crore be transferred to General Reserves of the Company and
balance profit of Rs.2.12 crore be carried forward as retained profits.
During the year an amount of Rs.238 crore from General Reserve and
Rs.150 crore from Profit Surplus Account was transferred to Export/
Import Contingency Reserve to meet any unforeseen future losses on
account of doubtful receivables and advances towards export and import
transactions. Accordingly, as on 31st March 2013, the Reserves and
Surplus stood at Rs.530 crore.
FOREIGN EXCHANGE EARNINGS/OUTGO
The total foreign exchange earnings of the Corporation by way of
exports, trade margins, etc. during the year amounted to Rs.1573 crore
while the foreign exchange outgo by way of imports and other expenses
amounted to Rs.16391 crore.
RECOGNITIONS EARNED
During the year, the Corporation earned a number of recognitions. These
included:
- ''Very Good'' rating by the Department of Public Enterprises in terms
of MOU for the year 2011-12.
- 13th rank in terms of net sales among 215 Central Public Sector
Enterprises as per Public Enterprises Survey: 2011-12 brought out by
the Department of Public Enterprises.
- 32nd rank in terms of total income among top 500 companies by
Business Today.
- 50th rank in terms of total income total assets among 500 Biggest
Non-Financial Companies by Business Standard (Oct.''2012).
PERFORMANCE OF SUBSIDIARY COMPANY
STCL Ltd. (Formerly Spices Trading Corporation Limited)
STCL, the wholly owned subsidiary of STC based at Bangalore, is
involved in trading of spices and other agricultural products.
In view of lack of funds and banking limits, its activities during
2012-13 remained confined mainly to participation in cardamom auctions,
issuing NOC for onion exports and supply of fertilizers to tobacco
growers.
Annual Accounts of STCL for 2012-13 are under audit. As per the
unaudited accounts for 2012-13, STCL has a negative net worth of
Rs.2041 crore, due to provisions made towards recoveries outstanding
from its business associates and the accumulated interest thereon in
merchanting trade transactions undertaken during 2007-08 and earlier.
Your Corporation has not given any corporate guarantee on behalf of
STCL and its liability is limited to its investment (Rs.2.82 crore) in
the equity of STCL. Due to erosion of entire equity of STCL, provision
of entire amount of Rs.2.82 crore has already been made in the Books of
Accounts of STC for the year 2011-12. As such, STC has no further
liability for the losses of STCL.
The decision of the STCL Board to wind up STCL and introduce a
Voluntary Separation Scheme has been approved by the Board of Directors
of The State Trading Corporation of India Ltd. and has been referred to
Department of Commerce, Ministry of Commerce & Industry on 10.05.2013
for further approval.
HUMAN RESOURCE
Manpower
The Corporation had manpower of 830 as on 31.03.2013. This included
554 managers and 276 staff.
Recruitments
During the year, the Corporation recruited 24 Probationary Officers
with MBA/CA qualifications directly from Professional
Institutes/Universities. The Corporation also recruited 12 managers at
various levels from Deputy Managers to Deputy General Manager depending
on the skillsets required and business volumes.
Industrial Relations
During the year, the Corporation continued to maintain harmonious
industrial relations. Co-operation between the elected representative
bodies of employees and management ensured that no man-days were lost.
Personnel policies and welfare schemes were continuously aligned with
companyRs.s goals and objectives.
Recruitment of SC/ST/OBC
The Corporation has been implementing the policies and guidelines
issued by the Government of India from time to time with regard to
recruitment of SC/ST/OBC and physically challenged candidates. During
the year, 7 SC/ ST, 11 OBC and 2 candidates from Minority Communities
were recruited by the Corporation.
Human Resource Development
During the year, a Training and Learning Policy for all employees of
the Corporation was evolved. The main objective of the policy is to
identify training needs of the employees and provide for their
systematic knowledge improvement. During the year 2012-13, adequate
opportunities were provided to employees through in- house and external
training programmes to enable them to develop their talents and improve
performance.
A total of 267 employees of the Corporation were nominated to 34
external and 8 in-house training programmes arranged on varied
subjects. Also a visit to Mundra port was organized for 20 young
professionals to enable them to acquire first hand knowledge of port
operations, customs procedures, shipping etc. In addition, interactive
sessions were also arranged at the port.
The Corporation''s excellence in HR was recognized by India Human
Capital Summit 2012 by bestowing HR Leadership Award on STC.
OFFICIAL LANGUAGE
In compliance with the Government''s Policy on Official Language,
continuous efforts were made for propagating and progressively
increasing the use of Hindi in Official work . Every year, Hindi Diwas
& Rajbhasa week/fortnight are organised in the Corporate Office as well
as in the Branch Offices of the Corporation. During these events,
employees doing exemplary work in Hindi in their day-to- day official
tasks are felicitated.
In recognition of the efforts made by the Corporation in implementation
of Government''s Policy on official language, Ministry of Commerce
felicitated STC at Hindi Salahakar Samiti organized in August 2012 at
Delhi.
The employees of the Corporation won various prizes in Hindi
Competitions organized by Town Official Language Implementation
Committees (TOLIC) at Delhi, Mumbai and Agra.
STC''s efforts in propagating use of Hindi in Official work were
appreciated by the Parliamentary Committee on Official Language during
its inspection of Jalandhar Branch Office.
VIGILANCE ACTIVITIES
During the year, a number of activities were undertaken as part of
preventive vigilance. As a major step in this direction, a Whistle
Blower Policy was introduced in the Corporation. Presentations were
made in the Branch Managers'' Conferences to sensitize the senior
managers of the Corporation about the need of preventive and punitive
vigilance in day to day activities. Also, a seminar on ''Transparency in
Public Procurement'' was organized at the Corporate Office in which
eminent personalities shared their valuable views on the subject.
The concept of Integrity Pact has been introduced in the Corporation.
Two Independent External Monitors (IEMs) have been appointed by the
Corporation for this purpose.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The detailed Management Discussion and Analysis Report forms part of
this Report and is placed at Annexure-I.
PARTICULARS OF EMPLOYEES
The particulars of employees under section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is
annexed to this report at Annexure-II.
RIGHT TO INFORMATION
In order to promote transparency and accountability, an appropriate
mechanism has been set up in the Corporation to provide information to
citizens under the provisions of Right to Information (RTI) Act, 2005.
For this purpose, the Company has, in line with the RTI Act, nominated
Central Public Information Officers at all its Divisions at New Delhi
and at Branch Offices across the country. First Appellate Authority has
also been nominated for considering the appeals of information seekers
against the orders of Public Information Officers.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT
In furtherance of its commitment towards Corporate Social
Responsibility and Sustainable Development, the Corporation undertook
following initiatives during 2012-13 for the welfare of the community
and environment protection:
- Rehabilitation of physically challenged BPL persons in J&K and
Ahmedabad by providing them with artificial limbs, calipers, crutches,
wheel-chairs, hand-paddled tricycles, etc.
- Vocational Training Programme for slum women.
- Installation of bore wells in Hamirpur District, Himachal Pradesh.
- Supporting needy students of fine arts through scholarship
programme.
- Promoting biodiversity by planting trees in Garhi Mandu Wilderness
Area, Delhi.
RESEARCH & DEVELOPMENT
In compliance with the guidelines on Research & Development (R&D)
notified by the Department of Public Enterprises, the Corporation
formulated the R&D Policy and R&D Plan and the same were approved by
its Board of Directors. Also, during the year, a study was commissioned
to identify investment opportunity in Kenya / Malawi / Mozambique by an
external agency for cultivation of pulses.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
The information required to be disclosed in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is ''Nil'' as the Company is mainly engaged in
trading activities.
FINANCIAL ACCOUNTING
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) and in compliance with
all applicable Accounting Standards issued by The Institute of
Chartered Accountants of India (ICAI) and provisions of the Companies
Act, 1956.
CORPORATE GOVERNANCE
Your Company believes that Corporate Governance is at the root of the
shareholders value creation.
Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges
and Guidelines on Corporate Governance for CPSEs issued by the
Department of Public Enterprises (DPE), a report on Corporate
Governance for the year 2012-13 forms part of this report
(Annexure-III).
The Statutory Auditors of the Company have examined and certified your
Company''s compliance with respect to the conditions enumerated in
Clause 49 of the Listing Agreement and DPE guidelines on Corporate
Governance for CPSEs. The certificate forms part of this report and is
placed at Annexure -IV.
STATUTORY AUDITORS
M/s Chandiok and Guliani, Chartered Accountants were appointed as
Statutory Auditors for the financial year 2012-13 by the Comptroller &
Auditor General of India (C&AG). Their report, along with replies of
the Management, is attached and forms part of this report.
COMMENTS OF C&AG
The comments of C&AG under Section 619 (4) of the Companies Act, 1956
on the accounts of the Corporation for the year 2012-13 and replies of
the management thereto are attached and form part of this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956, in relation to Directors'' Responsibility Statement, it is
hereby confirmed that:
(i) In the preparation of annual accounts for the year ended 31st March
2013, the applicable accounting standards have been followed along with
proper explanation relating to material departures;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at the end of the financial year and of the profit or
loss of the company for the year under review;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) The Directors have prepared the annual accounts of the Company for
the year ended 31st March 2013 on a "going concern basis".
BOARD OF DIRECTORS
On attaining superannuation, Shri N.K. Mathur relinquished charge as a
member of the Board of Directors and Chairman & Managing Director of
the Corporation on 30.11.2012. Shri J.S. Deepak Additional Secretary,
Department of Commerce held the post of Chairman & Managing Director,
STC in addition to his own duties w.e.f. 01.12.2012 to 12.08.2013, when
Shri Khaleel Rahim was appointed as Chairman & Managing Director of the
Corporation.
The Board places on record its deep appreciation for the valuable
contributions of Shri N.K. Mathur and Shri J.S. Deepak as members of
the Board and CMDs of the Corporation.
Since the last AGM, Shri Manoj Mishra and Shri Rajiv Chopra have been
appointed as Director (Finance) and Director (Marketing) on the Board
of STC w.e.f. 15.10.2012 and 01.01.2013 respectively.
Pursuant to the provisions of Section 255 and 256 of the Companies Act,
1956 and in terms of provisions of article 79 (2) of the Articles of
Association of the Corporation, Shri Naresh Dayal, Prof. R.H. Dholakia,
Shri Uday N. Abhyankar and Shri S.C. Tripathi would retire by rotation
at the ensuing Annual General Meeting and being eligible, have offered
themselves for re-appointment.
Brief resume of all Directors seeking appointment/ re- appointment are
given in the notice convening the 57th Annual General Meeting of the
Company as stipulated under Clause 49 of the Listing Agreement with the
stock exchanges and form part of the Annual Report.
CODE OF CONDUCT
Pursuant to the requirements of clause 49 of the Listing Agreement and
DPE guidelines on Corporate Governance for CPSEs, the Board Members and
Senior Management Personnel have affirmed compliance with the Code of
Conduct for the financial year ended 31st March 2013.
ACKNOWLEDGEMENTS
The Board of Directors places on record its appreciation of the
continued patronage and the confidence posed by business associates and
customers during the year.
The Board expresses its gratitude for the continued co-operation and
support provided by Government of India, in particular the Ministry of
Commerce and Industry, Ministry of Food, Consumer Affairs and Public
Distribution, Ministry of Chemicals and Fertilizers, various state
governments, financial institutions, banks, railways, ports, regulatory
and statutory authorities, shareholders, legal advisers and consultants
from time to time.
The Board also acknowledges the constructive suggestions received from
Comptroller & Auditor General of India, Statutory Auditors and Internal
Auditors.
Last but not the least, the Board places on records its appreciation
for the hard work and dedication of the employees of the Corporation.
For and on behalf of Board of Directors
Sd/-
New Delhi (Khaleel Rahim)
Date : 13.08.2013 Chairman & Managing Director
Mar 31, 2012
The Board of Directors of your Company is pleased to present the 56th
Annual Report and Audited Statement of Accounts for the year ended 31st
March 2012, together with the Auditors Report and Comments on the
Accounts by the Comptroller and Auditor General (C&AG) of India.
FINANCIAL RESULTS
The overall performance of the Corporation vis-a-vis the previous year
is summarized in the table given below:
Rs. Crore
2011-12 2010-11
TURNOVER
Exports 344 492
Imports 29961 18938
Domestic 139 555
GRAND TOTAL 30444 19985
FINANCIAL
Profit Before Tax 18 80
Profit After Tax 16 56
DIVIDEND 12 18
Net Worth 682 679
OPERATIONS AND BUSINESS PERFORMANCE
The Corporation achieved an all time high turnover of over Rs.30,000
Crore during 2011-12 thereby exceeding the previous year performance by
52%. The Profit Before Tax during the year amounted to Rs.18 Crore, which
is lower than the previous year mainly on account of high interest
costs and provisions/write-offs in certain cases. The higher turnover
was the result of sustained efforts by the company in increasing its
business in moderate risk areas.
DIVIDEND
The Board of Directors have recommended a dividend of Rs.2 per share (20%
of equity) amounting to Rs.12 Crore for the year 2011-12. The Dividend
payout including dividend distribution tax accounts for 85% of profit
after tax for the year 2011-12.
RESERVES
An amount of Rs.619 Crore was available in the Reserves and Surplus of
your company as on 1st April 2011. Your Directors have proposed that
out of available profits for the year 2011-12, an amount of Rs.1.65 Crore
be transferred to General Reserves of the Company and balance profit of
Rs.0.87 Crore be carried forward as retained profits. Accordingly, as on
31st March 2012, the Reserves and Surplus stood at Rs.622 Crore.
FOREIGN EXCHANGE EARNINGS/OUTGO
The total foreign exchange earnings of the Corporation by way of
exports, trade margins, etc. during the year amounted to Rs.303 Crore
while the foreign exchange outgo by way of imports and other expenses
amounted to Rs.18235 Crore.
RECOGNITIONS EARNED
During the year, the Corporation earned a number of recognitions. These
included :
- 'Very Good' rating by the Department of Public Enterprises in terms
of MOU for the year 2010-11.
- 14th rank in terms of net sales among 208 PSUs as per Public
Enterprises Survey : 2010-11 brought out by the Department of Public
Enterprises.
- 32nd rank in terms of net sales among top 500 companies by Business
Standard (Mar.'2012).
- 39th rank in terms of net sales among top 1000 companies by The
Financial Express (Feb.'2012).
PERFORMANCE OF SUBSIDIARY COMPANY
STCL Ltd. (Formerly Spices Trading Corporation Limited) STCL, the
wholly owned subsidiary of STC based at Bangalore, is involved in
trading of spices and other agricultural products.
In view of lack of funds and banking limits, its activities during
2011-12 remained confined mainly to participation in cardamom auctions,
undertaking onion exports and supply of fertilizers to tobacco growers.
Annual Accounts of STCL for 2011-12 are under audit. As per the
provisional unaudited accounts for 2011-12, STCL has a negative net
worth of Rs.1800 Crore, due to provisions made towards recoveries
outstanding from its business associates and the accumulated interest
thereon in merchanting trade transactions undertaken during 2007- 08
and earlier.
STC has not given any corporate guarantee to/on behalf of STCL and
STC's liability is limited to its investment (Rs.2.82 Crore) in the
equity of STCL. Due to erosion of entire equity of STCL, provision for
entire amount of Rs.2.82 Crore has been made in the Books of Accounts of
STC for the year 2011-12. As such, STC has no further liability for
the losses of STCL.
HUMAN RESOURCE
Manpower
The Corporation had a manpower strength of 844 as on 31.03.2012. This
included 554 managers and 290 staff.
Recruitments
In order to strengthen its cadre of professionals, the Corporation
recruited 37 officers including 32 Probationary Officers in finance,
marketing, HR and legal disciplines, from reputed Central Universities
/ Professional Institutes during the year 2011-12.
Industrial Relations
The year saw further strengthening of the bonds of employer - employee
relationship. During the year, a positive Industrial Relations
atmosphere prevailed in the Corporation as the employees' bodies as
well as the management appreciated each others' concerns and benefited
by mutual trust and understanding. During the period, Joint Council
Meetings were held in a structured manner, thus, promoting
Union/Association's participation in management. No man days were lost
in this year standing testimony to the prevalence of a good working
culture. As a welfare measure, a new pension scheme was introduced in
the Corporation which will go a long way in providing the much needed
financial security to the employees after their retirement. A
Complaints Committee is in existence in the Corporation to look into
the complaints of sexual harassment, if any.
Recruitment of SC/ST/OBC
The Corporation has been implementing the policies and guidelines
issued by the Government of India from time to time with regard to
recruitment of SC/ST/OBC and physically challenged candidates. During
2011-12, the Corporation recruited 3 SC, 2 ST and 8 OBC Probationary
Officers with professional qualifications.
Human Resource Development
The Corporation, in its endeavor towards attainment of the corporate
objectives, continued to lay emphasis on training and development of
the employees. Training initiatives have been stepped up. During the
year 2011-12, a total of 25 in-house training programmes were conducted
covering 662 employees whereas 112 employees were nominated to external
seminars / conferences on different subjects. The main focus in this
period was on nurturing commitment, competency and culture building.
Besides training programmes in functional areas, it also organized
induction programmes for new recruits. The programmes for enhancing
behavioural competencies were also organized. During the year, 21
executives were imparted training in project management. The
Corporation, in association with Administrative Staff College of India
(ASCI), Hyderabad organized a customized Management Development
Programme on International Trade and Finance for its junior / middle
management executives. In all, 93 executives were exposed to at least
three day long training programmes. In order to enhance problem solving
skills of the young executives of the Corporation, they were given the
opportunity to represent STC in various National Level managerial
events and competitions.
OFFICIAL LANGUAGE
The Corporation makes best efforts to implement the Official Language
Policy of the Govt. of India and promotes the use of Hindi in its day
to day working in line with the directions of the Ministry of Home
Affairs. During the year, meetings of the Departmental Official
Language Implementation Committee and Hindi Workshops were organized
from time to time. On the occasion of Hindi Divas, awards were given to
selected employees / divisions at Corporate Office and branches for
outstanding work in Official Language.
In appreciation of the Official Language work done by the Corporation,
Ministry of Commerce has felicitated STC with the 1st prize many a
time. In February 2012, efforts of STC were appreciated by Hindi
Advisory Committee in a meeting held at New Delhi. The employees of the
Corporation have won prizes in various Hindi competitions organized by
Town Official Language Implementation Committees (TOLIC) in Delhi,
Mumbai and Agra. The Official Language related work at STC's Corporate
Office and Branches has also been examined and appreciated by the
Parliamentary Committee on Official Language from time to time.
VIGILANCE ACTIVITIES
With a view to sensitise the senior management of the Corporation,
presentations on 'Preventive Vigilance' and 'Participative Vigilance'
were made by the CVO at the Branch Managers' conferences held in May
2011 and November 2011 respectively.
Vigilance Awareness Week was observed in STC's Corporate Office and
Branch Offices from 31st October to 5th November 2011. As part of
observance of the week, a seminar on 'Participative Vigilance', a 2-day
training programme on 'Management of Discipline and Departmental
Proceedings' and 1-day training programme on 'Financial Frauds and
Prevention' were also organized. A discourse on 'Integrity of Body,
Mind and Soul through Meditation and Yoga' by Yogi Anoop from Chaitanya
Foundation was also organized. Besides, various programmes relating to
vigilance awareness and anti- corruption were also organized at the
Branch Offices.
PARTICULARS OF EMPLOYEES
A statement of the employees of the company drawing remuneration
exceeding the limit laid down under provisions of section 217(2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended is placed at Annexure-I.
RIGHT TO INFORMATION
In order to promote transparency and accountability, an appropriate
mechanism has been set up in the Corporation to provide information to
citizens under the provisions of Right to Information (RTI) Act, 2005.
For this purpose, the company has, in line with the RTI Act, nominated
Central Public Information Officers at all its Divisions at New Delhi /
Branch offices across the country.
CORPORATE SOCIAL RESPONSIBILITY
The Corporation is conscious of its Corporate Social Responsibility
(CSR) and strives to implement societal betterment programmes. In line
with the guidelines issued by Department of Public Enterprises on the
subject, the following CSR projects were undertaken during 2011-12 :
- Construction of recreation centre in Education-cum- Vocational
Training Centre for autistic children and young adults for enhancing
their skills and employability.
- Rehabilitation of physically challenged below poverty line persons by
supplying artificial limbs, callipers, crutches, wheel-chairs, hand
pedalled tricycles, etc.
- Vaccination for prevention of cervical cancer for women belonging to
economically weaker sections.
- Mid-day meal programme for underprivileged children of schools of
Delhi/NCR.
- Detoxification and rehabilitation of drug addicted persons to enable
them lead a healthy and drug free future life while also improving
their employability.
- Workshops on legal rights (Mera Haq) to make women from downtrodden
background aware of their legal rights.
The planning and execution of CSR projects was monitored by various
committees at and below Board level.
SUSTAINABLE DEVELOPMENT
Appreciating the need for conservation and sustainability of natural
resources, the Corporation undertook the following initiatives during
the year in line with the guidelines on Sustainable Development (SD)
notified by the Department of Public Enterprises:
- Provision of uninterrupted drinking water facility in the village
Sogathorai in Coonoor district.
- Solar Electrification of a Village in Rajasthan.
- Tree Plantation in Bangalore & Chennai.
RESEARCH & DEVELOPMENT
In compliance with the guidelines on Research & Development (R&D)
notified by the Department of Public Enterprises requiring all CPSEs to
undertake R&D activities, facilities were upgraded at the Corporate
Office for online fixation of bullion prices and timely remittances and
settlement of associates' accounts.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
The information required to be disclosed in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is 'nil' as the company is mainly engaged in
trading activities.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of clause 49(IV) (F) of the Listing Agreement with the Stock
Exchanges and Guidelines on Corporate Governance for Central Public
Sector Enterprises(CPSEs) issued by the Department of Public
Enterprises, Government of India, a Management Discussion and
Analysis Report is placed at Annexure-II and forms part of the Annual
Report of the Company.
FINANCIAL ACCOUNTING
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) and in compliance with
all applicable Accounting Standards issued by The Institute of
Chartered Accountants of India (ICAI) and provisions of the Companies
Act, 1956.
CORPORATE GOVERNANCE
In terms of clause 49 of the Listing Agreement with the Stock Exchanges
and Guidelines on Corporate Governance for CPSEs issued by Department
of Public Enterprises, a report on Corporate Governance for the year
2011-12 is placed at Annexure - III and forms part of this report.
The Statutory Auditors of the Company have examined and certified your
Company's compliance with respect to conditions enumerated in Clause 49
of the Listing Agreement and DPE guidelines on Corporate Governance for
CPSEs. The certificate forms part of this report and is placed at
Annexure -III.
STATUTORY AUDITORS
M/s Chandiok and Guliani, Chartered Accountants were appointed as
Statutory Auditors for the financial year 2011-12 by the Comptroller &
Auditor General of India (C&AG). Their report, along with replies of
the Management, is attached and forms part of this report.
COMMENTS OF C&AG
The comments of C&AG under Section 619 (4) of the Companies Act, 1956
on the accounts of the Corporation for the year 2011-12 are attached
and form part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
(i) In the preparation of annual accounts, the applicable accounting
standards have been followed, along with proper explanation relating to
material departures;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March 2012 and of the profit or loss of the
company for the year ended on that date;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) The Directors have prepared the annual accounts of the Company on
a 'going concern basis'.
BOARD OF DIRECTORS
Since the last AGM, Shri Madhusudan Prasad, Additional Secretary,
Department of Commerce, Ministry of Commerce and Industry was appointed
as Part-time Official Director on the Board of STC vice Shri P.K.
Chaudhery w.e.f. 12.01.2012. Smt. Anita Agnihotri, Additional Secretary
and Financial Advisor, Ministry of Commerce was appointed as Part-time
Official Director on the Board of STC vice Shri Rajan S. Katoch w.e.f.
30.05.2012. Your Directors place on record their deep appreciation for
the valuable contributions made by Shri P.K. Chaudhery and Shri Rajan
S. Katoch during their tenures.
Shri N.K. Nirmal, Director (Finance) and Shri S.S. Roy Burman, Director
(Marketing) ceased to be the Directors of the Corporation w.e.f.
12.12.2011 and 30.04.2012 respectively. Your Directors place on record
their deep appreciation for the valuable services rendered by them as
member of the Board.
Since the last AGM, three new Independent Directors have been appointed
on the Board of the Corporation. Shri S.C. Tripathi and Shri Uday N.
Abhyankar joined the Board of STC w.e.f. 14.10.2011 and 10.10.2011
respectively while Shri S.C. Saraf joined w.e.f. 28.03.2012, as
Part-time non- official (Independent) Directors.
The terms of appointment of Dr. (Smt.) B. Kinnera Murthy and Shri J.N.
Shah as Part-time non-official (Independent) Directors expired on 07.1
2.201 1 and 30.1 1.201 1 respectively. However, both of them were
re-appointed as Part-time non-official (Independent) Directors on the
Board of STC w.e.f.18.04.2012.
Pursuant to the provisions of Section 255 and 256 of the Companies Act,
1956 and in terms of provisions of article 79 (2) of the Articles of
Association of the Corporation, Shri Khaleel Rahim and Shri Proshanto
Banerjee, Directors would retire by rotation at the ensuing Annual
General Meeting (AGM) and being eligible, have offered themselves for
re-appointment.
Brief resumes of all Directors seeking Appointment / Re- Appointment,
as stipulated under Clause 49 of the Listing
Agreement with the stock exchanges, are given in the notice convening
the 56th Annual General Meeting of the Company, and form part of the
Annual Report.
CODE OF CONDUCT
In line with the requirements of Clause 49 of the Listing Agreement and
guidelines on Corporate Governance for CPSEs issued by the Department
of Public Enterprises, the Board Members and Senior Management
Personnel have affirmed compliance with the Code of Business Conduct &
Ethics for Board Members and Senior Management for the financial year
ending 31st March 2012.
ACKNOWLEDGEMENTS
The Board of Directors places on record its appreciation of the
continued patronage and the confidence reposed by business associates
and customers during the year.
The Board expresses its gratitude for the valuable guidance and support
provided by Government of India, in particular the Ministry of Commerce
and Industry, Ministry of Food, Consumer affairs and Public
Distribution, Ministry of Chemicals and Fertilizers, various State
Governments, Financial Institutions, Banks, Railways, Ports, regulatory
and statutory authorities, Shareholders, legal advisers and consultants
from time to time.
The Board acknowledges the constructive suggestions received from
Comptroller & Auditor General of India, Statutory Auditors and Internal
Auditors and are grateful for their consistent support and cooperation.
Last but not the least, the Board places on record its appreciation for
the sincere efforts made by all the employees in taking the Company
forward.
For and on behalf of Board of Directors
Sd/-
(N.K. MATHUR)
Chairman & Managing Director
New Delhi
Date :13.08.2012
Mar 31, 2011
Dear Members,
It gives me pleasure to present, on behalf of the Board of Directors,
the 55th Annual Report on the working of the Corporation and Audited
Statement of Accounts for the year ended 31st March 2011, together with
the Auditors' Report and Comments on the Accounts by the Comptroller
and Auditor General of India (C & AG).
FINANCIAL RESULTS
The overall performance of the Corporation vis-a-vis the previous year
is summarized in the table given below:
Rs. Crores
2010-11 2009-10
TURNOVER
Exports 492 1504
Imports 18938 19049
Domestic 555 956
GRAND TOTAL 19985 21509
FINANCIAL
Trading Profit 178 145
Interest Income (Net) 18 138
Profit Before Tax (PBT) 80 171
Profit After Tax (PAT) 56 107
DIVIDEND 18 28.5
Net Worth 679 644
OPERATIONS AND BUSINESS PERFORMANCE
The Corporation achieved a turnover of the order of Rs. 20,000 crore
during 2010-11 with a trading profit of Rs. 178 crore. The achievement is
all the more significant as the same has been achieved despite a number
of factors beyond the control of the Corporation adversely hampering
trade.
The Profit Before Tax (PBT) during the year amounted to Rs. 80 crore.
DIVIDEND
The Board of Directors have recommended declaration of dividend @ Rs. 3
per share (30% of equity capital) amounting to Rs. 18 crore for the year
2010-11.
RESERVES
An amount of Rs. 584 crore was available in the Reserves and Surplus of
your Company as on 1st April 2010. Your Directors have proposed that
out of available profits for the year 2010-11, after payment of
dividend and tax thereon, an amount of Rs. 6 crore be transferred to
General Reserves of the Company, Rs. 19.18 crore be transferred to
Export/Import Contingency Reserve and balance profit of Rs. 10.33 crore
be carried forward as retained profits. Accordingly, as on 31st March
2011, the Reserves and Surplus stood at Rs. 619 crore.
FOREIGN EXCHANGE EARNINGS/OUTGO
The total foreign exchange earnings of the Corporation by way of
exports, trade margins, etc. during the year amounted to Rs. 386 crore
while the foreign exchange outgo by way of imports and other expenses
amounted to Rs. 19516 crore.
RECOGNITIONS EARNED/AWARDS WON
During the year, the Corporation earned a number of recognitions and
awards. These included :
- 14th rank in terms of net sales among 206 PSUs as per Public
Enterprises Survey : 2009-10 brought out by the Department of Public
Enterprises.
- 22nd rank in terms of net sales among Top 500 Companies by The
Financial Express (Feb.'2010).
- 25th rank in terms of net sales among Top 1000 Companies by Business
Standard (Feb.'2010).
- Won 1st prize under the category of agencies supplying gold to
exporters against replenishment during 2009-10 from the Gems &
Jewellery Export Promotion Council in October 2010.
- Won award for Gentle Giant Miniratna - I (Largest Non- Manufacturing
Company) at the Third DSIJ PSU Awards 2011 ceremony held at New Delhi.
- Won Greentech HR Excellence Award 2010 from Greentech Foundation, New
Delhi for outstanding achievement in innovation in employee retention
strategies.
- Won Asia's Best Employer Brand Award 2010 for Talent Management.
PERFORMANCE OF SUBSIDIARY COMPANY
STCL Ltd. (Formerly Spices Trading Corporation Limited)
STCL, the wholly owned subsidiary of STC, based at Bangalore, is
involved in import, export and domestic trading of spices and other
agricultural products.
In view of lack of funds or banking limits, its activities during
2010-11 remained confined mainly to issuing NOC in respect of onion
exports and undertaking cardamom auctions.
Annual Accounts of STCL for 2010-11 are yet to be finalised.
As per the accounts for 2009-10, STCL has a negative net worth of Rs.
1342 crore, due to provisions made towards recoveries outstanding from
its business associates in merchanting trade transactions undertaken
during 2007- 08 and earlier.
PERSONNEL
The Corporation had a manpower of 864 as on 31.03.2011. This included
536 managers and 328 staff.
During the year, the Corporation recruited 17 Probationary Officers
with MBA/CA qualifications directly from the Professional
Institutes/Universities.
Industrial Relations
During the year, the Corporation continued to maintain cordial and
harmonious industrial relations. No man-days were lost. Mutual trust
and understanding between the Management and employees was maintained
through regular consultations held with the representatives of
employees. This helped in arriving at amicable resolution of personnel
issues in line with the company's goals and objectives. During the
year, the Corporation introduced some new welfare schemes and modified
certain rules and policies for achieving overall productivity.
Human Resource Development
The Corporation appreciates that Human Resource Development is vital
for the growth and economic development both at micro and macro levels
and therefore the Corporation continuously strives to provide maximum
opportunities to its employees by way of training and field exposures
enabling them to achieve organizational as well as individual goals.
During the year, about 620 employees were imparted training in 20
in-house training programmes organized by the Corporation while 66
employees were nominated to various external seminars/ conferences. The
areas of training covered functional, technical as well as behavioural
aspects such as International Trade, Tax Laws, Finance, Computer
Operations, Corporate Governance, Vigilance, Attitude Building, Stress
Free Living and Work Life Balance. For the first time, the Corporation
organized specially customized Management Development programmes on
'International Trade and Finance' in association with Administrative
Staff College of India (ASCI) for the benefit of senior and middle
level managers. STC is conscious of the need to nurture the talents of
young executives so as to help them face the challenges in the future.
Under a comprehensive and custom-built induction programme organized by
STC at IIFT, New Delhi, all the new Probationary officers who joined
the Corporation during the year were given exposure to the intricacies
of International Trade. The young executives were also given an
opportunity to represent STC at the National level game competitions.
Recruitment of SC/ST/OBC and Physically Challenged Persons
The Corporation has been implementing the policies and guidelines
issued by the Government of India from time to time with regard to
recruitment of SC/ST/OBC and physically challenged candidates. During
the year, 3 SC, 1 ST, 3 OBC and 1 physically challenged (PH) candidates
were recruited.
OFFICIAL LANGUAGE
The Corporation makes best efforts to implement the Official Language
Policy of the Govt. of India and promotes use of Hindi in its day to
day working in line with the directions of the Ministry of Home
Affairs. During the year, meetings of the Departmental Official
Language Implementation Committee and Hindi Workshops were organized
from time to time. On the occasion of Hindi Divas, awards were given to
selected employees / divisions at Corporate Office and Branches for
outstanding work in Official Language.
In appreciation of the progress of Official Language work in the
Corporation, Ministry of Commerce has felicitated it with 1st prize
many a time. In this series, STC was awarded Rajbhasha Shield by the
Hon'ble President of India for outstanding work in Official Language
during 2009-10. The Official Language related work at STC's Corporate
Office and Branches is examined by the Parliamentary Committee on
Official Language from time to time. The Third Sub-Committee of the
Parliamentary Committee on Official Language inspected STC's Corporate
Office last year and appreciated the performance of its Official
Language related work. STC always endeavours to propagate and increase
the use of Official Language under the Official Language Policy of the
Govt. of India.
VIGILANCE ACTIVITIES
The Vigilance Division of the Corporation performed the following
Vigilance functions during the year:
- With a view to creating greater awareness, amongst employees, of the
need for eradication of corruption and maintenance of high standards of
integrity, Vigilance Awareness Week was observed in STC's Corporate
Office and Branch Offices from 25th October to 1st November 2010. As
part of observance of the week, a seminar on 'Preventive Vigilance' was
organized in the Corporate Office during which a presentation on 'Risk
Management in the context of International Trade' was made by the CVO.
An interactive session on 'System Improvement in STC to Minimize Risks'
was also conducted with the senior officials of STC. Besides, various
programmes relating to vigilance awareness and anti-corruption were
also organized at the Branch Offices.
- In-house training programme was organized on 'Vigilance Role and
Mechanism' for Probationary Officers.
- Complaints received from various agencies / sources were duly
investigated.
- Departmental inquiries having vigilance angle were handled.
- Constant liaison was maintained with various agencies for ensuring
preventive vigilance and providing details/ inputs to regulatory
agencies as per statutory requirements.
- Inspection of the Branch Offices of the Corporation was conducted
thereby bringing various aspects to the attention of top management for
taking corrective/ preventive action.
PARTICULARS OF EMPLOYEES
A statement of the employees of the company drawing remuneration
exceeding the limit laid down under provisions of section 217 (2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended is placed at Annexure-I.
CORPORATE SOCIAL RESPONSIBILITY
During the year, your Corporation undertook a number of CSR activities
in fulfilment of its obligations in terms of the guidelines on
Corporate Social Responsibility (CSR) notified by the Department of
Public Enterprises, as per details in Management Discussion & Analysis
Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
The information required to be disclosed in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is 'nil' as the company is mainly engaged in
trading activities.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of clause 49(IV) (F) of the Listing Agreement with the Stock
Exchanges and Guidelines on Corporate Governance for Central Public
Sector Enterprises (CPSEs) issued by the Department of Public
Enterprises, Govt. of India, a Management Discussion and Analysis
Report is placed at Annexure - II which forms part of the Annual Report
of the Company.
FINANCIAL ACCOUNTING
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) and in compliance with
all applicable Accounting Standards (AS-1 to AS-29) issued by The
Institute of Chartered Accountants of India (ICAI) and provisions of
the Companies Act, 1956.
CORPORATE GOVERNANCE
Your Company remains committed and dedicated to adoption of best
corporate governance practices, aiming at greater transparency,
accountability, performance orientation, honesty and integrity.
In terms of Clause 49 of the Listing Agreement and Guidelines on
Corporate Governance for CPSEs issued by the Department of Public
Enterprises in May 2010, a report on Corporate Governance for the year
2010-11, supported by a certificate from the Company's Auditors
confirming compliance of conditions, forms part of this report
(Annexure - III).
STC complies with the requirements stipulated under DPE guidelines for
Corporate Governance for CPSEs and clause 49 of the Listing Agreement
with Stock Exchanges except the Clause 49 (1A) of the listing agreement
and para 3.1.4 of the DPE guidelines for Corporate Governance regarding
number of Independent Directors on Board. Action in this regard is
being taken by the Ministry of Commerce & Industry and the process of
appointment of requisite number of Independent Directors is already on.
AUDITORS
M/s Chandiok and Guliani, Chartered Accountants were appointed as
Statutory Auditors for the financial year 2010- 11 by the Comptroller &
Auditor General of India (C&AG). Their report, along with replies of
the Management, is attached as addendum forming part of this report.
COMMENTS OF C&AG
The comments of C&AG under Section 619 (4) of the Companies Act, 1956
on the accounts of the Corporation for the year 2010-11 are attached
and form part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
- In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
- The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company as at 31st March, 2011 and of the profit or loss of the
company for the year ended on that date;
- The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
- The Directors have prepared the annual accounts of the Company on a
'going concern' basis.
BOARD OF DIRECTORS
During the year, Shri Saurabh Chandra, Additional Secretary & Financial
Adviser, Ministry of Commerce was appointed as Part-time Official
Director on the Board of STC vice Dr. Sutanu Behuria w.e.f. 10.11.2010.
Subsequently, Dr. Rajan Katoch, Additional Secretary & Financial
Adviser, Ministry of Commerce, was appointed as Part-time Official
Director on the Board of STC vice Shri Saurabh Chandra w. e. f.
15.12.2010. Your Directors place on record their deep appreciation for
the valuable contributions made by Shri Sutanu Behuria and Shri Saurabh
Chandra during their tenures.
Dr. Rajan Katoch, who was appointed as Additional Director after the
last AGM, holds office up to the ensuing AGM. Also, three new
independent Directors, namely, Sh. Proshanto Banerjee, Prof. R.H.
Dholakia and Sh. Naresh Dayal have been appointed as Additional
Directors on the Board w.e.f. 24.06.2011. They will hold office upto
the ensuing AGM.
Pursuant to the provisions of Section 255 and 256 of the Companies Act,
1956 and in terms of provisions of article 89 (2) of the Articles of
Association of the Corporation, Shri S.S. Roy Burman and Shri M.M.
Sharma would retire by rotation at the ensuing Annual General Meeting
(AGM) and being eligible, have offered themselves for re- appointment.
Brief resumes of all Directors seeking Appointment/ Re- Appointment, as
stipulated under Clause 49 of the Listing Agreement with the stock
exchanges are given in the Annexure to notice convening the 55th Annual
General Meeting of the Company, and form part of the Annual Report.
CODE OF CONDUCT
Pursuant to clause 49 (1) (d) of the Listing Agreement signed with the
Stock exchanges and Guidelines on Corporate Governance for CPSEs issued
by the Department of Public Enterprises, a detailed Code of Conduct for
Board Members and Senior Management Personnel has been laid down and
hosted on the website of the Company. All Board Members and Senior
Management Personnel, to whom the said Code is applicable, have
affirmed compliance of the same for the year ended 31st March 2011.
ACKNOWLEDGEMENTS
The Board of Directors places on record its appreciation of the
continued patronage and the confidence posed by business associates and
customers during the year. The Board is grateful for the continued
guidance and support received from the Ministry of Commerce & Industry,
Ministry of Food, Consumer affairs & Public Distribution, Ministry of
Chemicals and Fertilizers, different State Governments, various Govt.
Departments and Agencies, Banks and Financial Institutions, Railways,
Ports, Legal Advisers, Consultants and Shareholders. The Board also
acknowledges with thanks the suggestions received from Comptroller &
Auditor General of India, Statutory Auditors and Internal Auditors.
Last but not the least, the Board also acknowledges the unstinting
efforts and contribution made by the employees at all levels without
which it would not have been possible for your company to achieve such
high volumes of business on a sustained basis.
For and on behalf of Board of Directors
Sd/-
(N.K. MATHUR)
Chairman & Managing Director
New Delhi
Date : 02.08.2011
Mar 31, 2010
The Board of Directors has pleasure in presenting the 54th Annual
Report on the working of the Corporation together with the audited
statements of accounts for the year ended 31st March, 2010.
FINANCIAL RESULTS
During the year 2009-10, the overall performance of the Corporation
recorded significant improvement vis-ÃÂ -vis the previous year as may be
seen from the table given below:
(Rs.Crores)
2009-10 2008-09
TURNOVER
Exports 1504 2132
Imports 19049 16316
Domestic 956 1338
GRAND TOTAL 21509 19786
FINANCIAL
Trading Profit 145 113
Profit Before Tax (PBT) 171 145
Profit After Tax (PAT) 107 79
DIVIDEND 28.5 28.5
Net Worth 644 570
OPERATIONS AND BUSINESS PERFORMANCE
During 2009-10, your company achieved the highest ever turnover of
Rs.21509 crore in spite of the continued adverse impacts of global
economic slowdown on countrys foreign trade. The growth was mainly
attributable to higher imports of items such as bullion, hydrocarbons,
minerals & metals, petrochemicals, etc.
During the period under review, STC also registered a 36% increase in
the net profit earned over the previous year.
DIVIDEND
The Corporation has already paid an interim dividend for the year
2009-10 @25% of its paid-up equity capital of Rs.60 crore as per the
decision of the Board of Directors in its meeting held on 28.01.2010.
The Board recommends an additional dividend @ Rs.2.25 per share or 22.5%
of paid- up equity capital thereby taking the total dividend payment
for the year 2009-10 to 47.5%.
FOREIGN EXCHANGE EARNINGS/OUTGO
The total foreign exchange earnings of the Corporation by way of
exports, trade margins, etc. during the year amounted to Rs.1494 crore
while the foreign exchange outgo by way of imports and other expenses
amounted to Rs.17585 crore.
RECOGNITIONS EARNED/AWARDS WON
During the year, the Corporation earned more recognitions and awards.
These included :
- 2nd rank among trading companies of the country according to a Survey
by Dun & Bradstreet.
- 2nd rank in terms of sales to assets ratio among super 100 companies
by Business India (Dec.13, 2009).
- 14th rank in terms of net sales among 204 PSUs as per Public
Enterprises Survey : 2008-09 brought out by Department of Public
Enterprises.
- 22nd rank in terms of net sales among top 500 companies by The
Financial Express (Feb.2010).
- 25th rank in terms of net sales among top 1000 companies by Business
Standard (Feb.2010).
- Won Asias Best Employer Brand Award 2010 for Talent Management.
PERFORMANCE OF SUBSIDIARY COMPANY
STCL Ltd. (Formerly Spices Trading Corporation Limited)
STCL, the wholly owned subsidiary of STC based at Bangalore, is
involved in import, export and domestic trading of a varied range of
products, both agricultural as well as non-agricultural.
Annual accounts of STCL for the year 2009-10 have not yet been
finalized.
As per the accounts for 2008-09, STCL has a negative net worth of
Rs.899.34 crore, due to recoveries outstanding from its business
associates.
PERSONNEL
The Corporation had a manpower of 890 as on 31.03.2010. This included
539 managers and 351 staff.
During the year, the Corporation recruited 17 Probationary Officers
with MBA/CA qualifications directly from the Professional
Institutes/Universities.
Industrial Relations
The industrial relations scenario remained harmonious, positive and
constructive. No Ãman days were lost on account of any industrial
conflict. Trust and confidence level between the Management and
employees remained high and almost all employees related issues in the
Company were resolved through mutual dialogue and information sharing.
During the year, the Corporation modified certain rules, systems &
procedures dealing with employee relations, succession planning, etc
with a view to achieving overall improvement in discipline,
productivity and growth.
Human Resource Development
Realizing that HRD is the elixir of any business enterprise, it has
been the Corporations endeavor to integrate learning in the various
processes and develop capabilities to be able to face stiff competition
in view of the changing global trading environment. The Corporation
remained consistently involved in motivating the employees and creating
better work environment through various training and development
programmes. Orientation programmes were organized for new Probationary
Officers. The skill needs of the employees were identified and
trainings were organized to improve skill sets to suit new business
models. 73% employees were covered under various training programmes
ranging from International Trade, Managerial effectiveness to Personal
Development, Vigilance Awareness, Stress Management and many other
related areas of organizational importance. An employee engagement and
Psychological Contract survey was carried out and its findings were
analyzed to design suitable strategies to fill the gap.
Recruitment of SC/ST/OBC and physically challenged persons
The Corporation has been implementing the policies and guidelines
issued by the Government of India from time to time with regard to
recruitment of SC/ST/OBC and physically challenged candidates. During
the year, 4 SC/ ST and 4 OBC candidates were recruited.
OFFICIAL LANGUAGE
In compliance with Governments Policy on Official Language, vigorous
efforts were made for propagating and increasing the progressive use of
Hindi in official work. Acknowledging its commitment, STC has been
honoured and bestowed upon with the second prize à Indira Gandhi Shield
for the year 2007-08 by the Home Ministry, Government of India. The
Shield was presented by the Honble President of India during the year
2009-10.
STC has been regularly conducting workshops for propagating Hindi and
encouraging employees to use Hindi in their daily official work. Every
year "Hindi Diwas" & "Rajbhasha week / Fortnight" are organized in
Corporate office as well as in Branch offices. Parliamentary Committee
on Official Language, during its inspection of our various offices, has
also appreciated STCs efforts in propagating use of Hindi in official
work.
VIGILANCE ACTIVITIES
The Vigilance Division of the Corporation has performed the following
Vigilance functions during the year:- - With a view to creating greater
awareness, amongst employees, of the need for eradication of corruption
and maintenance of high standards of integrity, Vigilance Awareness
Week was observed in STCs Corporate Office and Branch Offices from 3rd
to 7th November, 2009. As a part of the observance of the week, a
seminar on ÃNeed for Transparency in Public Life was organized in the
Corporate Office. Besides, various programmes relating to vigilance
awareness and anti-corruption were also organized by the Branch
Offices.
- In-house training programmes were organized on ÃVigilance Awareness &
Disciplinary Proceeding.
- Complaints received from various agencies / sources were duly
investigated.
- Departmental inquiries having a vigilance angle were handled.
- Constant liaison was maintained with various agencies for ensuring
preventive vigilance and providing details/ inputs to regulatory
agencies as per statutory requirements.
- Inspection of the Branch Offices of the Corporation was conducted
thereby bringing various aspects to the attention of top management for
taking corrective/preventive action.
PARTICULARS OF EMPLOYEES
A statement of the employees of the company drawing remuneration
exceeding the limit laid down under provisions of section 217 (2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended is placed at Annexure-I.
FINANCIAL ACCOUNTING
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) and in compliance with
all applicable Accounting Standards (AS-1 to AS-29) issued by The
Institute of Chartered Accountants of India (ICAI) and provisions of
the Companies Act, 1956.
LISTING
The equity shares of the company remain listed with National Stock
Exchange and Bombay Stock Exchange and the annual listing fee for the
financial year 2009-10 has been paid to these exchanges.
CORPORATE GOVERNANCE
Your Directors reaffirm their commitment to good governance practices
and adherence to all the major stipulations laid down by SEBI Corporate
Governance Practices. The company believes that good corporate
governance practices in the long term leads to creation of wealth for
all its stakeholders.
A report on the corporate governance practices, the Auditors
certificate on compliance of mandatory requirements thereof and
Management Discussion and Analysis are given as an annexure to this
report.
AUDITORS
The Statutory Auditors of your Company are appointed by the Comptroller
& Auditor General of India (C&AG). Their report, with corresponding
replies from the Board of Directors, is attached as annexure forming
part of this report.
COMMENTS OF C&AG
The comments of C&AG under section 619 (4) of the Companies Act, 1956
on the accounts of the Corporation for the year 2009-10 along with
C&AGs review of the accounts are submitted herewith.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under section 217 (2AA) of the Companies
Act, 1956, your Directors hereby state and confirm that :
- in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
- they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company at the end of the financial year and of the profit of the
company for the year;
- they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provisions of the Act
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; they have prepared the annual
accounts on a going concern basis.
BOARD OF DIRECTORS
The resignation of Shri D.T. Joseph, Director was accepted by the Audit
Committee and Board of Directors in the meetings held on 24.09.2009.
Shri P.K. Chaudhery, Additional Secretary, Ministry of Commerce &
Industry joined the Board as non-official part time Director w.e.f.
28.01.2010 vice Shri R. Gopalan, Additional Secretary, Ministry of
Commerce & Industry, as appointed by Govt. of India. Shri P.K.
Chaudhery will hold office up to the ensuing Annual General Meeting and
being eligible offers himself for appointment.
The Board places on record its appreciation for the commendable
services and contributions made by Shri D.T. Joseph and Shri R. Gopalan
towards effective discharge of the functions of the Board and its
committee. The Board also welcomes Shri P.K. Chaudhery and expresses
confidence that the company shall immensely benefit from his rich and
varied experience.
In terms of provisions of article 79(2) of the Articles of Association,
Shri N. K. Nirmal and Shri Khaleel Rahim would retire by rotation at
the ensuing AGM and being eligible offer themselves for re-appointment.
The proposals regarding the appointment/ re-appointment of the
aforesaid Directors are placed for your approval.
CODE OF CONDUCT
Pursuant to clause 49 (1) (d) of the Listing Agreement signed with the
Stock Exchanges, a detailed Code of Conduct for Board Members and
Senior Management Personnel has been laid down and all Board Members
and Senior Management Personnel, to whom the said Code is applicable,
have affirmed compliance of the same for the period ended 31st March
2010.
ACKNOWLEDGEMENTS
The Board of Directors is pleased to place on record their appreciation
of the continued patronage and the confidence posed by business
associates and customers during the year. The Board gratefully
acknowledges the continued guidance and support received from the
Ministry of Commerce & Industry and various other Departments of
Government of India. The Directors take this opportunity to thank the
Ministry of Food, Consumer Affairs and Public Distribution, Ministry of
Chemicals and Fertilizers and different State Governments for their
faith in the Corporation. Your Directors place on record their sincere
appreciation for the continued cooperation and help received from
banks, financial institutions, auditors, legal advisors, consultants
and shareholders. The Board also acknowledges the contribution and
hard work put in by the employees at all levels without which it would
not have been possible for your company to achieve consistent growth in
spite of global slowdown.
For and on behalf of Board of Directors
Sd/-
(N.K. MATHUR)
Chairman & Managing Director
New Delhi
Date : 18th August, 2010
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