State Trading Corporation of India Ltd Directors Report.

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.


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

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


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


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.


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.


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 fulfil 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 IIFT, New Delhi, wherein 29 executives participated.

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

STCS 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.


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 organised 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 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 STCs 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 Organisation, were organised 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 Honble 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.


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.


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.


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 off in the financial year 2018-19, the interim report of the second complaint has been submitted to the Disciplinary Authority.


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.


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 .


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.


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 Arms length basis.


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 Companys CSR activities in prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is placed at Annexure –III.


In pursuance of the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 notified by Ministry of Micro, Small and Medium Enterprises vide their 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.


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


The Financial Statements have been prepared in accordance with the Generally 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.


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 companys 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 companys 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.


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.


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


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


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.


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 behaviour by assigning responsibility for the development of controls, and providing guidelines for reporting and conduct of investigations of suspected fraudulent behaviour.


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


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 P.C. 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 Companys Corporate website, namely, 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 STCs website. The separate meeting of Independent Directors were held on 28.11.2017 and 20.03.2018 at the registered office of the Company.


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.


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.


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.



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.


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.


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.


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


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.


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
(Rajiv Chopra)
Chairman & Managing Director
(Additional Charge)
DIN 06466326
New Delhi
Date: 10th August, 2018