State Trading Corporation of India Ltd Management Discussions

WORLD ECONOMIC OVERVIEW

The global economy was fairly moderate and grew at 3.2% during 2024. The year has been an eventful year globally, witnessing unprecedented electoral activity on the political front, with more than half of the global population voting in major elections across countries. Meanwhile, adverse developments like the Russia-Ukraine con_ict and the Israel-Hamas con_ict increased regional instability. These events impacted energy and food security, leading to higher prices and rising in_ation. Despite higher interest rates, advanced economies witnessed stable growth of 1.7% during 2024. This was on account of moderate in_ation and sustained employment and consumption. Growth in USA remained strong at 2.8 % in 2024 while in the Euro Area, growth improved from 0.4 % in 2023 to 0.8 % in 2024. Within Asia, Japan s growth hindered by domestic supply disruptions in early parts of the year and fell from 1.5% in 2023 to ( - ) 0.2 % in 2024. China s growth fell from 5.2% in 2023 to 4.8% in 2024 due to sluggish private consumption and investment. Global economy is holding steady, but at a slower and uneven pace due to geopolitical and structural challenges. In_ation, geopolitical uncertainty and cyber risks will continue to shape the global economic environment in the near term.

OVERVIEW OF INDIAN ECONOMY

Indian economy continued to grow at a steady and con_dent pace during 2024-25. India s GDP at 6.54 % in 2024-25 was supported by strong domestic demand, easing in_ation, robust capital markets and rising exports. The real gross domestic product (GDP) growth for FY 2024-25 is 6.5 %. The agriculture sector is expected to rebound to a growth of 3.8 % in FY 2024-25. The industrial sector is estimated to grow by 6.2 % in FY 2024-25. Strong growth rates in construction activities and electricity, gas, water supply and other utility services are expected to support industrial expansion. The agriculture sector is expected to rebound to a growth of 3.8% in FY25. Healthy Kharif production, above- normal monsoons, and an adequate reservoir level supported agriculture growth.

The industrial sector is estimated to grow by 6.2 % in FY25. Strong growth rates in construction activities and electricity, gas, water supply and other utility economic services are expected to support industrial expansion. Q1 saw a strong growth of 8.3 %, but growth moderated in Q2 due to three key factors. First, manufacturing exports slowedsigni_cantlyduetoweakdemandfromdestination countries, and aggressive trade and industrial policies in major trading nations. Second, the above average monsoon disrupted sector like mining, construction and to some extent, manufacturing. Third, the variation in the timing of festivities between September and October in the previous and current years led to a modest growth slowdown in Q2 FY25.

Growth in the service sector 2024-25 is expected to remain robust at 7.2%, driven by healthy activity in _nancial, real estate, professional services, public administration, defence and other services.

The FDI in_ow increased by 14% vis- à -vis last year and rose to approx. USD 81 Billion in FY 2024-25. The current account de_cit was contained at just 0.6 % of GDP, mainly due to strong service exports and steady remittances from Indians living abroad.

India s total export touched USD 824.9 billion in 2024-25 vis- a vis USD 778.1 billion in 2023-24. Service exports and merchandise exports (non- petroleum product) by were the key contributors. Merchandise imports rose 5.2 % mainly due to increase non-oil, non-gold imports. India remains a bright spot with strong and broad-based growth across all major sectors.

STC s PERFORMANCE AND OUTLOOK Business Activity

During the year 2024-25, no business activities were undertaken by the Corporation and STC continued as a non-operative company in pursuance of the direction of the Ministry of Commerce & Industry and approval of the Board of Directors. However, the company continued monitoring of counter trade obligation as per directions of the Department of Commerce. The performance of the Corporation during the year 2024-25 vis-a-vis the previous year is summarized below:

( _ Crore)

Particulars	2024-25	2023-24
TURNOVER	NIL	NIL
FINANCIALS
Income
Trading Pro_t	-	-
Rental Income	104.66	76.92
Interest & Other Income	20.42	18.89
Total	125.08	95.81
Expenses
Employees Bene_t	30.89	32.34
Administration & Trade	16.14	13.44
Interest	2.01	1.94
Exceptional Item (Net)	27.17	(4.36)
Total	76.21	43.36
Pro_ts
Pro_t Before Tax	48.87	52.45
Pro_t After Tax	25.72	52.21
Net Worth	(923.71)	(955.31)

Details of Signi_cant Changes in Key Financial Ratios:

Details of signi_cant changes in key _nancial ratios are given as under:

S.No. Particulars	2024-25	2023-24	Variation (%)	Remarks
1 Debtors Turnover	-	-	-	Turnover being NIL during FY 2024-25
2 Inventory Turnover	-	-	-	Turnover being NIL during FY 2024-25
3 Interest Coverage Ratio	25.29	28.09	23.26%	Increase in EBITDA due to increase in
				other income and reduction in expenses.
4 Current Ratio	0.63	0.62	1.59%	Changes in current assets and current
				liabilities.
5 Debt Equity Ratio	(56.81)	(33.36)	41.28%	Debt includes total liabilities other than
				Shareholder Fund.
6 Operating Pro_t Margin	-	-	-
(%)
7 Net Pro_t Margin	-	-	-	Turnover being NIL during FY 2024-25
8 Return on Net Worth		N.A

Pro_tability

During the year 2024-25, the Company reported a net pro_t (after tax) of Rs.25.72 crore as against the net pro_t (after tax) of Rs.52.21 crore reported during the year 2023-24. The reduction in pro_t is mainly due to the ligation settlement with M/s Adani Enterprises and reversal of MAT credit in FY 2024-25. However, there was no trading income due to stoppage of business activities.

INTERNAL CONTROLS AND PROCEDURES

Statutory Auditor is appointed by the CAG and professional agencies conducting regular and exhaustive internal audits are appointed through GeM Portal. The observations/ recommendations made by the auditing agencies are reported to the Audit Committee of Directors along with a report on the compliance of directions issued in the past. The quarterly _nancial statements as well as reports of the statutory auditors and Government Audit Party are reviewed by the Audit Committee of Directors before these are submitted to the Board of Directors.

The Company has a full-_edged Vigilance Division to oversee that the guidelines of the Government and the rules/ procedures of the company are strictly adhered to/ implemented in all matters. The Vigilance Division also conducts inspection of Divisions and Representative O_ce of the Corporation and makes suggestions for taking corrective / preventive action.