Annual Report 2019-20 ANNUAL REPORT 2019-20 THE STATE TRADING CORPORATION OF INDIA LIMITED REGISTERED & CORPORATE OFFICE (CIN: L74899DL1956GOI002674) Jawahar Vyapar Bhawan, Tolstoy Marg, New Delhi-110001 Tel.: #011-23313177, Fax #011-23701123, 23701191 Email: [email protected] Website:www.stclimited.co.in BOARD OF DIRECTORS CMD AND FUNCTIONAL DIRECTORS Shri Rajiv Chopra, Director (Marketing) [Addl. Charge of CMD] (upto 31.07.2020) Shri Sanjeev Kumar Sharma, Director (Personnel) [Addl. Charge of CMD] (from 01.08.2020) Shri Umesh Sharma, Director (Finance), MMTC with Addl. Charge of STC (upto 31.05.2020) Shri Kapil Kumar Gupta, Director (Finance), MMTC with Addl. Charge of STC (from 03.06.2020) Shri N.A.N. Jeyakumar, Director (Marketing) PART-TIME OFFICIAL DIRECTORS (GOVERNMENT NOMINEES) Shri Subhash Chandra Pandey, SS&FA, Dept. of Commerce (from 27.03.2018 upto 30.06.2019) Shri Sunil Kumar, AS, Dept. of Commerce (upto 21.01.2020) Shri Keshav Chandra , Joint Secretary, DoC (from 21.01.2020 & upto 10.02.2020) Shri Shashank Priya, Additional Secretary& Financial Advisor, DoC (from 13.08.2019) Shri Shyamal Mishra, Joint Secretary, DoC (from 10.02.2020) PART-TIME NON-OFFICIAL DIRECTORS (INDEPENDENT DIRECTORS) Dr. N.Sundaradevan (upto 14.06.2019) Dr.K.Rangarajan (upto 14.06.2019) Shri Sunil H. Trivedi (upto 14.06.2019) Shri Arvind Gupta (upto 14.06.2019) Dr. Amitabh Rajan (upto 26.01.2020) Shri Mohan Lal Pareek (upto 26.01.2020) Ms. Bharathi Magdum (upto 26.01.2020) STATUTORY AUDITORS Shri Bharatsinh Parmar (upto 26.01.2020) M/s. HDSG & Associates K-61, Basement Jangpura Extension New Delhi-110014 COMPANY SECRETARY Shri Vipin Tripathi SECRETARIAL AUDITORS REGISTRAR & SHARE TRANSFER AGENT M/s. P.C. Jain & Co, MCS Shares Transfer Agent Limited Company Secretaries, F-65, 1st Floor, Okhla Industrial Area, 2382, Ist Floor, Phase-I, New Delhi 110020 Sector-16 Faridabad-121002 Tel: 011-41406150 E-mail: [email protected] BANKERS State Bank of India Allahabad bank Bank of Baroda Bank of India Canara Bank Indian Overseas Bank Indian Bank ICICI Bank UCO Bank Syndicate Bank Vijaya Bank Union Bank of India HDFC Bank ICBC Bank Indusind Bank Axis Bank Exim Bank IDBI Bank CONTENTS 1 Board’s Report 2019-20 along with the following Annexures: 5-10 I Management Discussions & Analysis Report 11-14 II Extract of Annual Return (MGT-9) 15-24 III Annual Report on CSR Activities 25-26 IV Report on Corporate Governance 27-45 V Compliance Certificate on Corporate Governance 46 VI Secretarial Auditors’ Report 47-50 2. Highlights: Ten Years at a Glance 51 3. Standalone Financial Results 52 • Independent Auditors’ Report 53-66 • Accounts for the year 2019-20 67-118 • Management’s Replies to Statutory Auditor’s Report 119-127 • CAG Comments 128-129 4. Statement Pursuant to Section 129(3) of the Companies Act., 2013 130 related to subsidiary Company and Joint Ventures 5. Consolidated Financial Results 131 • Independent Auditors’ Report 132-141 • Accounts for the year 2019-20 142-198 • Management’s Replies to Statutory Auditor’s Report 199-210 • CAG Comments 211-212 6. Green Initiative in Corporate Governance: Go Paperless 213 BOARD’S REPORTS The Board of Directors presents the 64th Annual Report on provisions of Rule 309 etc. of GFR-2017, the OTS will be the business and operations of the Company and its completed. Audited Statement of Accounts for the year ended March DIVIDEND 31, 2020 together with the Auditors' Report and During the year 2019-20, STC has reported net loss of Comments on the Accounts by the Comptroller and `114 crore and the Company has a negative net worth of Auditor General (CAG) of India. `946 crore approx. (excluding revaluation reserves) as on FINANCIAL RESULTS 31.03.2020. The Company had earlier reported net loss The performance of the Company during the year of `881 crore during the year 2018-19. Therefore, the 2019-20 vis-à-vis the previous year is summarized cumulative losses as on 31.03.2020 have increased to in the table below: `121.51 crore from `8.64 crore as on 31.03.2019. Thus, TURNOVER 2019-20 2018-19 the Board of Directors have not recommended any dividend for the year 2019-20. Exports 11 11 (OTHER EQUITY) RESERVES Imports 2536 8437 An amount of (-) `8.64 Crore (including revaluation Domestic 383 445 reserve of `884.60 Crore) was available in the other Grand Total 2930 8893 equity of the company as on 01.04.2019. An amount of FINANCIALS (-) `112.84 Crore (PAT: (-) `113.63 Crore and other Profit Before Tax (114) (897) comprehensive income: `0.79 Crore) has been transferred to retained earnings. Accordingly, as on 31st Profit After Tax (114) (881) March, 2020, the other equity stood at (-) `121.51 Crore. Net Worth (946) (805) HUMAN RESOURCE OPERATIONS AND BUSINESS PERFORMANCE Manpower During the year 2019-20, the Company achieved a total STC had 334 employees on its rolls as on 31.03.2020, turnover of `2,930 crore as against `8,893 crore achieved which included 214 managers and 120 staff. in the previous year. The decline in turnover was mainly due to lower import of bullion as well as inability of the Recruitments Company to undertake trade transactions due to non- The Company did not make any recruitment during the availability of working capital. Therefore, in view of the year 2019-20. financial crisis being faced by STC, the Company Industrial Relations continued to refrain from undertaking trade involving During the year 2019-20, the company continued to STC's funds / banking limits and undertook business with maintain harmonious industrial relations. No man days central/state government departments and their entities were lost. Personnel policies and welfare schemes were only, where there was no involvement of STC's funds. suitably improved / amended so as to bring them in line The Company reported a net loss (after tax) of `114 crore with the overall business interests/financial condition of during the year 2019-20 as compared to net loss (after the company. tax) of `881 crore during the year 2018-19. The net loss Recruitment of SC/ST/OBC/PWD reported during the year was mainly due to creation of The Company has been implementing the Government of liability amounting to `104 crore (approx.) as a matter of India’s directives and guidelines for SC/ST/OBC/PWD abundant caution and financial prudence in respect of issued from time to time with regard to recruitment of some lost court cases. Since the awards under reference SC/ST/OBC and differently abled candidates. are bad under law, therefore the same have been Human Resource Development challenged before the higher authorities prescribed under the law. During the year 2019-20, due to precarious financial position of the company, no budget was allocated for FINANCIAL RESULTS Training and Development. STC's account continued to remain NPA since Mar/Jun'18. OFFICIAL LANGUAGE The Lender Banks have jointly filed the case in DRT against STC for recovery of their dues, which was crystallized at All efforts are being made in order to ensure `1906.24 crore (approx.) and the proceedings at DRT are implementation of official language Hindi in the Company going on. Subsequently, the dues were reviewed and in accordance with the Official Language Policy of the further crystallized in a meeting held on 29.08.2019. One Govt. of India. Mostly the employees possess minimum of the Lender Bank had also filed a case in NCLT which has working knowledge of Hindi in terms of Official since been withdrawn by the Bank. The company is in the Languages Rules, 1976. However, necessary training is process of completing One Time Settlement with the being imparted to the employees on official language lender banks in line with the decision taken during the high through Hindi Workshops on regular basis. level meeting held on 29.08.2019 regarding One Time Compliance of all the directions with regard to official Settlement of dues of STC with the banks. An amount of language given by the Govt. of India from time-to-time is `1100 crore has already been paid to the lender banks being ensured across the Company. With a view to and with transfer of identified immovable properties worth promote the use of official language Hindi in day-to-day `300 crore (approx.) to the banks preferably through official work, the Official Language Incentive Scheme is in Power of Attorney (POA) process and adhering to the vogue in the Company. THE STATE TRADING CORPORATION OF INDIA LIMITED | 05 In addition, “Rajbhasha Pakhwada” was celebrated in the DISHA” containing articles on vigilance, ethics, CVC month of September, 2019 wherein various Hindi circulars and various circulars issued by the company from Competitions/ Programmes were organised with a view to time to time was circulated through e-mail to all the encourage the employees to make use of Hindi language employees of the Company. in their day-to-day working. Training on use of Hindi on During the year 2019-20, Vigilance clearances have been computer is being provided to the employees from time- given to 397 employees for various purposes such as to-time. promotion, foreign visit, retirement, VRS, etc. Out of 31 Thus, as a result of all these efforts, the use of Hindi in the complaints received during the year, 28 complaints were official work is increasing progressively. The Company is disposed off. Further, 7 disciplinary proceedings cases regularly awarded with Official Language Shield by the have been disposed off during the year and action on Department of Commerce, Govt. of India for the progress remaining 10 cases is in progress as on 31.03.2020.