MIRA
INFORM REPORT
|
Report Date : |
29.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
THE STATE TRADING
CORPORATION OF INDIA LIMITED |
|
|
|
|
Registered Office : |
Jawahar Vyapar
Bhawan, Tolstoy Marg, New Delhi – 110 001 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2007 |
|
|
|
|
Date of Incorporation : |
18.05.1956 |
|
|
|
|
Com. Reg. No.: |
55-2674 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L74899DL1956GOI002674 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
DELT00171D |
|
|
|
|
Legal Form : |
It is a public
limited liability company. The
company’s shares are listed on the Stock Exchanges. Subject is a
Government of India owned company. |
|
|
|
|
Line of Business : |
It is the official
canalising agency for exports and imports for a number of products. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
Maximum Credit Limit : |
USD 17350960 |
|
|
|
|
Status : |
Excellent |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well
established Government owned trading house having satisfactory track.
Available information indicates high financial responsibility of the company.
Financial position is satisfactory. Payments are usually correct and as per
commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered
Office / Corporate Office : |
Jawahar Vyapar
Bhawan, Tolstoy Marg, New Delhi – 110 001, India |
|
Tel. No.: |
91-11-23313177 /
233221777 / 23701100 |
|
Fax No.: |
91-11-23326459 /
6471 / 23701123 / 6459 / 23701191 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Branches : |
Located at ·
Agra ·
Jalandhar ·
Coimbatore ·
Guntur ·
Vishakhapatnam
·
Bhopal ·
Jaipur, ·
Adipur ·
Hyderabad ·
Kochi ·
Bangalore ·
Ahmedabad ·
Chennai ·
Kolkata · Mumbai |
|
|
|
|
Overseas Office: |
Dubai P. O. Box 737,
1706, Dubai Tower, Deira, Dubai, UAE |
|
Tel. No.: |
009714-271270 |
|
Fax No.: |
009714-2280127 |
|
E-Mail : |
DIRECTORS
|
Name : |
Mr. Arvind Pandalai |
|
Designation : |
Chairman cum Managing Director |
|
|
|
|
Name : |
Mr. K.K. Sood |
|
Designation : |
Director |
|
Date of Appointment : |
30.11.2006 |
|
|
|
|
Name : |
Mr. S.R. Bharati |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Rana Som |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N.K. Mathur |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N.K. Nirmal |
|
Designation : |
Director |
|
Date of Appointment : |
01.08.2006 |
|
|
|
|
Name : |
Mr. Vijay Krishan |
|
Designation : |
Director |
|
Date of Appointment : |
31.07.2006 |
|
|
|
|
Name : |
Mr. S.S. Roy Burman |
|
Designation : |
Director |
|
Date of Birth/Age : |
15.02.1960 |
|
Qualification : |
B. Tech (Engineer), MBA |
|
Experience : |
25 years |
|
Date of Appointment : |
01.05.2007 |
|
|
|
|
Other Directorship Companies : |
·
MMTC Limited ·
National Textile Corporate Limited ·
Indian Trade Promotion Organisation ·
Karnatka Trade Promotion Organisation ·
West Bengal Trade Promotion Organisation ·
National Jute Manufacturer Corporation Limited ·
Jute Corporation of India Limited ·
National Institution of Fashion Technology ·
Indian Institute of Foreign Trade |
KEY EXECUTIVES
|
Name : |
Mrs. Asha Swarup |
|
Designation : |
Non – Executive Director |
|
Date of Appointment : |
21.05.2007 |
|
|
|
|
Name : |
Mr. Cristy L Fernandez |
|
Designation : |
Non – Executive Director |
|
Date of Appointment : |
08.06.2007 |
|
|
|
|
Name : |
Mr. R. Gopalan |
|
Designation : |
Non – Executive Director |
|
Date of Birth/Age : |
20.04.1952 |
|
Qualification : |
MPA (Public Admn. and Management), M.A. (Economics), B. Sc.
(Chemistry) |
|
Experience : |
31 years |
|
Date of Appointment : |
08.06.2007 |
|
|
|
|
Name : |
Mr. Dr. Sutanu Behuria |
|
Designation : |
Non – Executive Director |
|
Date of Birth/Age : |
02.07.1954 |
|
Qualification : |
Ph. D (Economics) |
|
Experience : |
31 years |
|
Date of Appointment : |
21.05.2007 |
|
|
|
|
Name : |
Mr. A K Gupta |
|
Designation : |
Company Secretary |
SHAREHOLDING
PATTERN
As on 31.03.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
Promoter
(Government of India) |
27306800 |
91.023 |
|
UTI/Mutual Funds |
700 |
0.002 |
|
Banks/Financial
Institutions |
- |
- |
|
FIIs |
- |
- |
|
Private
Corporate Bodies |
313039 |
1.044 |
|
Indian Public |
2356832 |
7.856 |
|
NRIs/OCBs |
22629 |
0.075 |
|
|
|
|
|
Total |
30000000 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
It is the
official canalising agency for exports and imports for a number of products. |
||||||||
|
|
|
||||||||
|
Products : |
|
||||||||
|
|
|
||||||||
|
Imports : |
|
||||||||
|
Products : |
Edible Oils,
Sugar, Wheat, Fatty Acids, Pulses, Hydrocarbons, Gold and Silver, Urea,
Scientific Instruments and Hospital / Police Equipments |
GENERAL
INFORMATION
|
No. of Employees : |
913 |
||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Bankers : |
·
State Bank
of India CAG Branch, Vijaya Building, Barakhamba Road, New Delhi – 110 001 ·
Vijaya
Bank Main Branch, Vijaya Building, Barakhamba Road, New Delhi – 110 001 |
||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
Good |
|
|
|
|
Auditors : |
|
|
Name : |
Sharma Goel and
Company Chartered
Accountants |
|
|
|
|
Associates/Subsidiaries : |
·
All
Government of India Undertaking Companies ·
Spices Trading
Corporation Limited ·
Tea Trading
Corporation of India Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
30,000,000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 millions |
|
|
|
|
|
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
30,000,000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 millions |
|
|
|
|
|
Notes : (Of these 2,80,00,000 Equity Shares of Ra.10/- irf ' each allotted
as fully paid up by way of Bonus Shares
by
capitalisation of General Reserve)
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
300.000 |
300.000 |
300.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
4037.740 |
3351.409 |
2899.872 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
4337.740 |
3651.409 |
3199.872 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
7176.205 |
2027.274 |
1296.217 |
|
|
2] Unsecured Loans |
1772.095 |
0.000 |
0.409 |
|
|
TOTAL BORROWING |
8948.300 |
2027.274 |
1296.626 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
13286.040 |
5678.683 |
4496.498 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
246.285 |
217.135 |
217.797 |
|
|
Capital work-in-progress |
63.965 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
907.217 |
907.217 |
907.217 |
|
|
DEFERREX TAX ASSETS |
449.401 |
298.428 |
72.317 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
5611.804
|
3301.216 |
2399.396 |
|
|
Sundry Debtors |
25212.329
|
16941.891 |
10677.153 |
|
|
Cash & Bank Balances |
855.150
|
654.764 |
39153.484 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
3242.785
|
3285.256 |
1618.498 |
|
Total
Current Assets |
34922.068
|
24183.127 |
53848.531 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
22336.172
|
19392.614 |
49767.593 |
|
|
Provisions |
966.724
|
534.610 |
781.771 |
|
Total
Current Liabilities |
23302.896
|
19927.224
|
50549.364
|
|
|
Net Current Assets |
11619.172
|
4255.903 |
3299.167 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
13286.040 |
5678.683 |
4496.498 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
143352.694 |
71252.405 |
95221.699 |
|
|
Other Income |
2464.103 |
1414.281 |
1209.650 |
|
|
Total Income |
145816.797 |
72666.686 |
96431.349 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
1227.224 |
566.903 |
370.300 |
|
|
Provision for Taxation |
344.452 |
177.369 |
119.954 |
|
|
Profit/(Loss) After Tax |
882.772 |
389.534 |
250.346 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
N.A. |
9233.515 |
3310.524 |
|
|
Services Charges |
N.A. |
62.771 |
22.663 |
|
|
Other Earnings |
N.A. |
0.258 |
0.000 |
|
Total Earnings |
N.A. |
9296.544 |
3333.187 |
|
|
|
|
|
|
|
|
Import Value |
N.A. |
N.A. |
N.A. |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Goods
Sold |
142596.176 |
70626.354 |
94996.378 |
|
|
Overheads |
980.763 |
622.847 |
764.635 |
|
|
Interest |
513.414 |
156.837 |
144.479 |
|
|
Depreciation |
17.802 |
14.685 |
16.008 |
|
|
Write-Offs |
54.794 |
1.588 |
1.422 |
|
|
Provisions
against Doubtful |
8.351 |
0.000 |
0.000 |
|
|
Receivables
& Investments |
418.273 |
656.401 |
41.962 |
|
Total Expenditure |
144589.573 |
72078.712 |
95964.884 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 1st
Quarter |
30.09.2007 2nd
Quarter |
|
|
|
|
|
|
Sales
Turnover |
|
27699.600 |
35333.900 |
|
Other
Income |
|
293.100 |
358.200 |
|
Total
Income |
|
27992.700 |
35692.100 |
|
Total
Expenditure |
|
27667.600 |
35383.900 |
|
Operating
Profit |
|
325.100 |
308.200 |
|
Interest |
|
92.800 |
117.200 |
|
Gross
Profit |
|
232.300 |
191.000 |
|
Depreciation |
|
4.800 |
4.800 |
|
Tax |
|
54.400 |
80.100 |
|
Reported
PAT |
|
173.100 |
106.100 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
PAT / Total Income |
(%) |
0.60
|
0.54 |
0.26 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
0.86
|
0.79 |
0.39 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
3.49
|
2.32 |
0.68 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.28
|
0.15 |
0.11 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
7.43
|
6.01 |
16.20 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.50
|
1.21 |
1.06 |
LOCAL AGENCY FURTHER
INFORMATION
History
Subject was
incorporated on 18th May, 1956 at New Delhi having Company
Registration Number 2674.
Subject is a
leading trading house in the public sector and it is the official canalising
agency for exports and imports for a number of products.
In 1994-95, subject
started trading in items like rice, wheat, coffee, Indian made foreign liquor,
sandalwood and oil. During 1995-96,
subject planed to enter into new areas of business like direct import of fertilisers,
non-ferrous metals and kerosene oil. In
the domestic trading sector, it expanded its activities in areas like rice,
wheat, coffee, tobacco and rubber.
The State Trading Corporation of India Limited (STC) is a
premier international trading house owned by the Government of India. The
Corporation set up in 1956, has developed vast expertise in handling bulk
international trade. Though, dealing largely with the East European countries
during the early years of its formation, today it trades with almost all the
countries of the world. The company is the official canalising agency for
exports and imports for a number of products ranging from agricultural
commodities to manufactured products from India to all parts of the
world.
The company's major businesses are exports, imports and services to Indian
exporters -- financial assistance, marketing infrastructure, participation in
trade fairs and exhibitions, supply of imported machinery and raw materials and
testing facilities. Spice Trading Corporation of India is the subsidiary of the
company.
In 1994-95, STC started trading in items like rice, wheat, coffee, Indian-made
foreign liquor, sandalwood and oil. During 1995-96, STC entered into new areas
of business like direct import of fertilisers, non-ferrous metals and kerosene
oil. In the domestic trading sector, it expanded its activities in areas like
rice, wheat, coffee, cashew, tobacco and rubber.
During 2004-2005, Government of India decided not to pursue the proposed
disinvestments of its equity in STC. Earlier GOI had decided to off-load 65% of
its equity in STC to a strategic buyer thereby bringing down its share to 26%.
During the same period the corporation was successful in getting nominated by
the Govt of Uzbekistan as a nodal agency for imports from and exports to
India.
FINANCIAL
RESULTS:
The Directors are pleased to report that the operations of the company created
new records during 2006-07. The company not only achieved highest ever net
profit but also registered highest ever turnover.
OPERATIONS
AND BUSINESS PERFORMANCE:
The net profit recorded a growth of 126% over the previous year thereby
surpassing the MOU target for the year by 127%. As a result, the earnings per
share (EPS) of the Corporation also rose to Rs.29.43 as against Rs.12.98 in the
previous year.
Total turnover reached an all time high of Rs143350.000
Millions reflecting a growth of over 100% compared to the previous year mainly
due to expansion of overseas steel operations in Philippines, undertaking of similar
operations in Bulgaria and import of wheat to meet the domestic shortages. In
fact, best ever performances were recorded in all the three segments viz.
exports, imports and domestic trading.
The total trading profit of the company during 2006-07 reached Rs.1670.000
Millions which was another landmark achieved during the year under
review.
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.27020.000 Millions while the
foreign exchange outgo by way of imports and other expenses amounted to
Rs.78210.000 Millions.
RECOGNITIONS EARNED/AWARDS WON:
During the year, the Corporation earned more recognitions and awards in view of
continuously improving performance and expanding business operations. These
included:
·
No. 1 rank consecutively for the second year as per Super
100 companies study by Business India
·
3rd rank among trading companies of the country according to
a Survey of India's Top 500 companies by Dun and Bradstreet.
·
17th rank among 207 PSUs by the Department of Public
Enterprises.
The Corporation was awarded the MOU Excellence Award for 2004-05 and Merit
Certificate for Excellent performance in terms of MOU : 2005-06 by the Hon'ble
Prime Minister of India in a function held at New Delhi on 8.3.2007
GOLDEN
JUBILEE OF SERVICE TO THE NATION:
STC completed 50 years of service to the Nation in May 2006. To mark this
momentous occasion, the Department of Posts released STC Golden Jubilee Special
Postal Cover. A function was organized on 22nd May 2006 at STC's corporate
office building at New Delhi where Hon'ble Minister of Commerce, Shri Kamal
Nath was the Chief Guest. He was presented the First Cover by the then Minister
for Communication and IT, Thiru Dayanidhi Maran. Commerce Secretary and many
other top officials of Govt. Departments and media persons were present at the
function. The year-long Golden Jubilee Celebrations had been inaugurated by the
then Minister of State for Commerce and Industry in May 2005. The Golden
Jubilee Celebrations, which continued for one year, included a series of press
conferences, issue of press releases, get-together of business associates,
employee welfare activities, etc.
PERFORMANCE OF SUBSIDIARY
COMPANY:
STCL Ltd. (Formerly, Spices Trading Corporation Limited):
STCL, the wholly owned subsidiary of STC based at Bangalore, deals mainly in
the exports, imports and domestic trading of spices and other agricultural
commodities. Recently, it has also diversified into many non-agricultural
products like iron ore, coal, metal scrap, polyester yarn, polymers, PVC
resins, fertilizers, pesticides, iodized salt, etc.
During the year, STCL achieved record breaking performances both on turnover
and profitability front. The turnover of STCL, for the first time, crossed
Rs10000.000 Millions thereby registering a growth of 113% and the net profit
also doubled than the previous year to reach Rs.120.000 Millions. STCL has paid
STC the highest ever dividend of 160% for the financial year 2006-07.
STCL is helping coffee growers in marketing of their produce by providing
updated market information, warehousing and finances. It has also been
supplying seedling and agricultural implements to growers in the tribal areas
under the Integrated Tribal Development Programme of the Government of
Karnataka.
STCL has established a world class chilli processing
unit at Bydagi in Karnataka along with cold storage facility which is likely to
become operative by September 2007.
The company plans to achieve a 50% rise in turnover during 2007-08 thereby
taking it to Rs.15000.000 Millions and also proposes to maximize its
profits.
The financial statements of STCL are included elsewhere in this Annual
Report.
CONSOLIDATED
FINANCIAL STATEMENTS OF STC AND ITS SUBSIDIARY:
The consolidated financial statements of STC and its subsidiary, namely, STCL
Limited. are included in this Annual Report.
PERSONNEL:
The manpower of the Corporation as on 31.3.2007 stands as 913 including 464
executives. The percentage of employees belonging to SC and ST category has
been 24.31% and 6.02% respectively. The number of women employees has been 228
and 24 employees are physically challenged. The Corporation has recruited 22
employees in the year 2006-07 including 20 Probationary Officers in the field
of Marketing, Legal, Human Resource and Finance directly from the Management
Institutes.
Industrial Relations:
The industrial relations scenario in the Corporation has been peaceful,
positive and constructive. During the year, the Corporation has introduced a
number of systems and modified certain rules and procedures for achieving
overall improvement in discipline and punctuality, in rationalising maintenance
of personal records, in making promotions more performance based and in
achieving greater mobility in deployment. These changes have been possible due
to the active cooperation received from the Unions and Associations of the
employees.
STUDY
BY M/s. MCKINSEY AND COMPANY:
The Board of Directors of STC, in the year 2005, had decided to get a
comprehensive risk analysis and management study carried out by hiring services
of an international professional agency. The study was expected to suggest
strategies and business models in line with the changing global trading
environment so as to ensure long term sustainability and profitability of the
company. During the process of selection of the consultant, Ministry of Commerce
mooted the idea of enhancing the scope of proposed study so as to cover the
other two trading public sector undertakings of the Ministry of Commerce also,
namely MMTC and PEC.
Subsequently, M/s. McKinsey and Company were retained
jointly by STC, MMTC and PEC to get the study conducted. M/s. McKinsey have
since submitted their report.
In addition to various recommendations with regard to focus sectors for the
future, business model and business processes, M/s. McKinsey have suggested,
among other options, merger of STC, MMTC and PEC into one organization so as to
derive maximum benefits of the size and synergies of individual organization.
STC had circulated a synopsis of the report amongst its employees and invited
feed back. STC Board has already recommended implementation of McKinsey
recommendations to the Government.
OFFICIAL LANGUAGE:
STC has successfully implemented the Annual Hindi Programme in letter and
spirit by complying with the provisions of Section 3(3) of the Official
Language Act, 1963. The targets set by the Department of Official Language
(Ministry of Home Affairs) regarding implementation of Official language Policy
of the Government have been satisfactorily achieved. The performance of STC in
this regard has been reviewed by the Committee of Parliament on Official
Language which visited the branches of the Corporation at Kolkata, Agra and
Hyderabad. During the review, the Committee members appreciated STC's
dedication towards implementation of Rajbhasha. On the advice of Hon'ble
members during inspection at Kolkata, STC has introduced three special prizes
of Rs.2000/-, Rs.1500/- and Rs.1000/- with the objective of promoting Hindi in
official work.
During the year, the Corporation has also made its website completely
bilingual. It has released equal number of advertisements in English and Hindi
and procured Books and Periodicals in Hindi of the same value as that of
English. The Corporation organized Hindi workshops and awarded 140 prizes to
the contestants in various competitions in which a large number of employees
and their family members participated.
The Corporation has also been awarded `Rajbhasha Trophy' by the Ministry of
Commerce for the year 2005-06.
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 on the need
for eradication of corruption and maintenance of high standards of integrity,
Vigilance Awareness Week was observed during 6t" to 10th November 2006. As
a part of it, a Seminar-cum-Panel Discussion on `Transparency in Governance
with Special Reference to PSUs' was organized which also touched upon the
various aspects of the `Right to Information Act. Besides, various programmes
relating to vigilance awareness and anti-corruption were also organised in some
of the Branch Offices.
·
Investigated complaints received from various
agencies/sources.
·
Handled the departmental inquiries which have a vigilance
angle.
·
Maintained constant liaison with the various agencies
for ensuring preventive vigilance and provided detailed inputs to regulatory
agencies as per statutory requirements.
·
Conducted inspection of the Branch Offices of the Corporation
thereby bringing to the attention of the Management various aspects for taking
corrective/ preventive action.
MANAGEMENT
DISCUSSION & ANALYSIS REPORT:
WORLD ECONOMIC OVERVIEW:
Despite high prices of oil that topped $75 a barrel during the course of 2006,
rising short-term interest rates, and a bout of financial market volatility,
world GDP rose 4.0 percent (5.4 percent in PPP terms), up from 3.5 percent in
2005. The global expansion remained buoyant in the first half of 2006, with activity
in most regions meeting or exceeding expectations. All country groupings-oil
exporters, emerging markets, and low-income countries-in the Middle East and
Central Asia region performed well.
Asia recorded another year of strong growth in 2006-07, with China and India
continuing to lead the way. China's economy grew by 11.1% as one of the fastest
growing economy. China's rapid growth continued to be largely investment led,
although net exports have been contributing a growing share. Led by increased
public investment, private consumption and buoyant exports, economy of Japan
grew by 2.2%. During 2006, US economy grew by 3.3%. Although the US economy
exhibited a strong growth in the first quarter of 2006, it slowed down
subsequently due to spillover effects from the weaker housing sector, the huge
current account deficit and falling commodity prices. This had its effect on
the world economy and was partially responsible for a loss in export momentum,
equity price rise and greater financial risks in late 2006.
The global expansion gathered momentum in the euro area and ended the year on a
strong note. Growth in Euro zone is estimated to have reached 2.8% in 2006, the
fastest rate in six years. The German economy, which accounts for almost 30% of
the region's output registered 6% growth in industrial production.
Oil and metals prices hit new highs in the year gone by. Prices were supported
by tight spare capacity in global markets against the background of buoyant GDP
growth, and in the case of oil, the rising geopolitical tensions in the Middle
East and risks to production in some other large oil producing countries
The lingering worries about the US economy, as well as narrowing interest rate
differential with respect to the euro, caused the US dollar to fall across the
board against all other major currencies. In December 2006, the dollar fell by
2.6% against the euro, 2.8% against the British pound, almost 2.4% against the
Swiss franc and 0.2% versus the yen.
OVERVIEW OF INDIAN ECONOMY:
The Indian economy witnessed a robust growth with GDP growing by 9.4% during
2006-07 as against 9% in the previous year - the strongest in 18 years and the
2nd highest since independence.
Thus, India continued to be a high growth economy second to China. The world
economic forum's global competitiveness index ranked India as 43rd, well ahead
of Brazil (66th), China (54th) and Russia (62"d) for the year
2006-07.
The strong growth in economy was largely possible on account of four of the
eight key sectors of the economy recording double digit growth rates namely
manufacturing, construction, trade and hotels and business services.
Indian Industrial sector grew by 10.9% as compared to 9.6% in the previous
year. Manufacturing sector led the industrial with a growth of 12.3%. Services
and construction sectors grew by 11% and 10.7% respectively.
Agricultural sector registered a slow down with a growth of
only 2.7% as against 6% in the previous year. Inflation remained a cause of
concern and averaged at 5.4% as against 4.4% in 2005-06. This led to hardening
of interest rates. During the year, rupee appreciated by 2.3% against the US
dollar mostly due to an inflow in the foreign capital, in the form of FDI, ECB
and Portfolio investments.
During April-March 2007, the country's merchandise exports grew by 22.5% to
reach US $ 126.3 billion thereby achieving the export target set by the
Government for the year. With this India's exports recorded a growth of above
20 per cent for the fifth consecutive year since 2002-03. While top five items
of exports were petroleum products, gems and jewellery, RMG cotton incl.
accessories, machinery and instruments and drugs, pharmaceuticals and fine
chemicals, the top five destinations of exports emerged out to be USA, UAE, China,
Singapore and UK. As a result, India's share in world merchandise exports
reached 1.0 per cent in 2006 from 0.7 per cent in 2000.
Imports grew by 27.8%, touching US $190.6 billion, driven by increased imports
of oil by 29.8% and non-oil imports by 26.9% (21.8% a year ago). Capital goods
accounted for 46% of the growth in non-oil imports. The other major
contributors to growth were metalliferrous ores, metal scrap and gold &
silver. On the other hand, pearls, precious and semi-precious stones, a major
component of non-oil imports, showed a decline of 18% during 2006-07. The
country's trade deficit during 2006-07 touched US $64.2 billion, higher by US
$18.1 billion over the level in the corresponding period a year ago (US $46.1
billion).
Continuous liberalization in FDI policy and simplification of procedures
contributed immensely in attracting increased FDI into India. Foreign direct
Investment inflows in the country jumped nearly three fold to 15.9 billion
dollars in 2006-07 as the world's second fastest growing economy lured
investors from across the world mainly in sectors like services, electrical
equipments 8(including computer software & electronics), construction
activities, telecommunications and real estate. The BSE Sensex crossed 14,000
mark and reached a peak of 14,652 in February 2007 before closing at 13,072 on
31s' March 2007 as compared to 11,280 a year ago. The country's foreign
exchange reserves stood at US$ 199.2 billion as on 31s' March 2007.
For Indian corporate sector, 2006 was a watershed year in
terms of mergers and acquisitions as Indian companies went shopping across the
globe. Taking full advantage of the prevailing domestic and international trade
scenario, STC grabbed every business opportunity coming in its way to create new
milestones.
STC's
PERFORMANCE:
During 2006-07, STC exhibited outstanding performance, both in terms of
turnover as well as profitability. It not only achieved a record profit but
also registered highest ever turnover in its history, which was characterized
by record performances on exports, imports and domestic fronts.
TRADING PROFIT:
Trading Profit grew by 67% to reach the highest ever figure of Rs.1670.000
Millions Growth in trading profit came mainly through expansion of overseas steel
operations, wheat imports and an improved customer delivery mechanism enabling
the Corporation to negotiate better margins.
Increase in trading profit on exports was mainly due to
higher volumes handled in existing overseas steel operations at Philippines and
undertaking of similar operations in Bulgaria resulting in achievement of
higher turnover and profitability from these operations. Higher trading profit
on exports of gold jewellery and chemicals and pharmaceuticals items also
contributed to overall increase in the trading profit on exports.
On import front, items making substantial contribution to the overall trading
profit are wheat, hydrocarbons, minerals and metals, vanaspati and edible oils
and pulses.
On domestic front, increase in trading profit was contributed mainly by wheat,
minerals and metals and seeds/extractions
PROFITS:
During the period under review, the Corporation achieved an all time high
profit before tax of Rs.1230.000 Millions, thereby surpassing the MOU target by
132% and showing a growth of 116% over the previous year. The all time high
profitability was mainly a result of improved customer delivery mechanism which
helped STC to negotiate higher trade volumes and better margins. As a result,
the earnings per share (EPS) of the Corporation has improved impressively to
Rs29.43 as against Rs12.98 in the previous year.
TURNOVER:
Buoyed by successful expansion of overseas steel operations leading to
excellent export performance, STC has, in a landmark performance, broken all
earlier records in terms of turnover and profitability during 2006-07.
The total turnover of the Corporation has more than doubled
when compared to the previous year to reach the highest ever level of over
Rs143000.000 Millions - 43% higher than MOU target fixed for the year. The
record turnover was characterized by best ever performances achieved by STC in
all the three segments viz. exports, imports and domestic trading.
SEGMENT-WISE
PERFORMANCE:
EXPORTS:
Demonstrating a strong growth of 167%, exports recorded the best ever
performance of over Rs 2900 crore. Exports achieved are over thrice the MOU
target. In fact, for the second year in succession, growth in exports has
outstripped the import growth. The growth achieved is far higher than the
national growth of about 24% in exports. The outstanding export performance is
mainly due to expansion of overseas steel operations that are now also being
undertaken in Bulgaria besides higher volumes achieved from similar operations
in Philippines. Areas exhibiting noteworthy achievements in exports are
indicated below:
·
Steel
Operations:
During the period, the overseas steel operations, under which STC has
been supplying raw materials to a steel plant in Philippines, were expanded on
similar lines to Bulgaria. The overseas steel operations involve stock and sale
of goods through Collateral Management Agency. Overall, such operations yielded
a substantial turnover of over Rs.18000.000 Millions
·
Chemicals,
Drugs and Pharma:
As a result of vigorous marketing efforts, STC has developed exports of
chemicals and pharmaceuticals as a major line of business. Exports of chemicals
and pharmaceuticals have shown a spectacular growth of 51% over previous year
thereby climbing to an all time high of over Rs.6000.000 Millions.
·
Jewellery:
During 2005-06, STC had, on a modest scale, made a beginning
by exporting jewellery. With continued vigorous efforts, it could undertake
exports of jewellery on a much higher scale thereby effecting shipments of the
order of Rs.2000.000 Millions
After a gap of many years, STC participated in Watch and Jewellery Exhibition
held in Dubai and was able to fetch export orders worth about Rs.500.000
Millions
·
Iron
Ore:
STC continued to pursue exports of iron ore as one of its thrust area of
business and was successful in finalizing an arrangement for procurement of
Rs.0.300 Millions MT of iron ore with MML. Against this, a quantity of about 1
lakh MT was received by STC for exports during the year and exports worth
Rs.470.000 Millions were made to China.
·
Others:
During the year, construction materials worth Rs.1280.000
Millions were exported by STC. As a result of consistent efforts, STC was able
to revive exports of consumer goods by effecting shipments worth over
Rs.400.000 Millions. Other major item of export was maize with shipments worth
Rs.300.000 Millions
IMPORTS:
The import turnover also grew by 95% to reach an all time high level of
Rs.107000.000 Millions due to wheat imports and significant growth in a number
of other items. Major items contributing to the better import performance are
as under.
·
Wheat:
With a view to meeting the requirement of central pool stocks
and controlling the spiraling domestic prices of wheat, STC was entrusted by
the Govt. of India with the task of importing 5.500 tones of wheat into the
country. Keeping in view the drastic fall in the availability of wheat all over
the world due to crop failures in almost all the major wheat producing
countries, the task before the STC to procure such huge quantities of wheat was
herculean.
STC contracted the entire quantity of 5.500
MTs of wheat against five separate tenders issued from time to time in
accordance with Govt. directions. Quality specifications and phytosanitary
requirements along with month-wise/port wise quantities of import were decided
by the Department of F&PD and formed the basis of the tenders. The
technical evaluation of the bids was undertaken by the Inter Ministerial
Technical Committee. STC evaluated the bids commercially (on C and FFO price
basis), negotiated best prices and quantities of technically acceptable bidders
and submitted the recommendations to Department of F&PD for taking decision
with regard to purchase.
After approval by the Govt., the Corporation placed orders on reputed
international suppliers for import of the entire authorized quantities of
wheat. Thus, as against the total authorized and contracted quantity of 5.500
MT of wheat, a quantity of 5.380 MT arrived the Indian Ports as on 31.03.2007
resulting in a turnover of over Rs 50000.000 Millions Imported wheat was made
available to FCI on high seas basis for storage/distribution.
The successful imports of such a large quantity of wheat by STC at competitive
prices has been widely appreciated in the international circles.
·
Bullion:
Bullion emerged as the second largest item of import after
wheat and exhibited a growth of 30% over previous year to reach Rs.29850.000
Millions
·
Hydro-carbons,
Minerals & Metals:
STC has been able to make a stronghold in this line of business despite higher
international prices of hydrocarbons. During 2006-07, import sales of
hydro-carbons, minerals and metals amounting to Rs12440.000 Millions were
made.
One of the noteworthy achievement on this front has been STC's signing a
contract with NTPC for supply of 5 million MT of non-coking steam coal valuing
approx. Rs.22000.000 Millions for its power plants. Imports are being arranged
by STC to cater to NTPC's requirements and till 31.03.2007, 1.6 million MT of
coal valuing Rs.6430.000 Millions has been delivered to various power plants of
NTPC.
·
Edible
Oils/Vanaspati:
The Corporation arranged import sales of about 95000 MT of vanaspati
valued at about Rs.3090.000 Millions under Indo-Nepal Treaty of Trade and over
0.2 MT of edible oils valued at Rs.5170.000 Millions.
·
Others:
The Corporation also continued to do well in pulses imports
business and arranged import sales of pulses amounting to Rs.2850.000 Millions
as against Rs.660.000 Millions in the previous year. Efforts are being made to
expand this business by broadening the customer base.
Besides above, other major items of imports were fertilizers (Rs.1590.000
Millions) and petro-chemicals (Rs.1070.000 Millions).
DOMESTIC
SALES:
During the year, domestic sales also grew by 33% to reach an all time high of
Rs.7160.000.
During 2005-06, STC had re-entered, on a modest scale, into domestic
oilseeds market with a view to servicing the requirements of actual users of
oilseeds, namely, soyabean and mustard. During 2006-07, such operations were
successfully expanded and the same resulted in a domestic turnover of the order
of Rs.3000.000 Millions The Corporation also sold Rs.240.000 Millions worth of
castor seeds in the domestic market.
Other major items of domestic sales were petro-chemicals (Rs.1350.000
Millions), pulses (Rs.1020.000 Millions) and steel (Rs.860.000 Millions)
MOU RATING:
In view of all round excellent performance, the overall performance of STC in
terms of MOU for the year 2006-07 is likely to be rated as `Excellent',
consecutively for the fourth year.
INTERNAL CONTROLS AND
PROCEDURES:
A proper system of checks and balances is in place in STC. Besides, Statutory
Audit and Audit by CAG, the functions of the Corporation are also subjected to
an Internal Audit by professional outside agencies. The quarterly financial
statements, reporting processes, internal control systems as also findings of
internal, external and Government audit are reviewed from time to time in the
meetings of Management Audit Committee and the Audit Committee of the Board of
Directors constituted for this purpose. The observation of the Statutory
Auditors regarding the need for laying down reasonable and adequate procedures
for physical verification of inventories and strengthening the internal control
systems for purchases and sales has been noted by the Audit Committee of
Directors and necessary steps are being initiated in this regard. The
Corporation has a well-defined Delegation of Powers (DoP) in force, which lays
down the powers at each stage of managerial cadre to help facilitate faster
commercial decisions. The Corporation keeps reviewing its DoP from time to time
in view of the prevailing international trade scenario to match authority with
accountability. The various systems and procedures of the Corporation have been
laid down in such a manner that maximum transparency is ensured in all
commercial deals. The Corporation has a full-fledged Vigilance Division to
oversee that the guidelines of the Government are strictly adhered to/
implemented in all matters requiring transparency of operations.
OPPORTUNITIES & THREATS:
Global output growth is expected to moderate to a sustainable level during the
current year. The broad-based economic expansion is forecast to continue in
2007, and into 2008, at a slightly slower pace than in 2006. Inflation is
expected to ease as growth moderates and oil prices stabilise.
In many respects, the macro-economic environment appears favourable. Financing
conditions remain generally supportive to growth. Unemployment has fallen in
major advanced and emerging economies. Perhaps more fundamentally, the
seemingly smooth shift in the balance of growth across regions during the past
few quarters might support the view that the global economy has become more
flexible and resilient.
Nonetheless, the baseline scenario is subject to significant near-term risks as
the full impact of the US housing market downturn might not yet have been felt.
The inflation outlook also remains uncertain. Energy and other commodity prices
have rebounded since the beginning of 2007. Moreover, underlying inflationary
pressures are still visible in major economies, and it is not clear whether the
projected moderation of growth would be sufficient to significantly reduce
resource pressures.
Any perception that inflation risks are not under control could also lead to a
repricing of risks. The two episodes of heightened financial market volatility
in May-June 2006 and February 2007 are a reminder that negative surprises with
respect to both inflation and growth can unsettle markets. While on those
occasions there was no pass-through to the real economy, such an impact cannot
be ruled out in the future.
After having attained growth of over 9% during the last two years, it may be
difficult for the Indian economy to attain similar levels in 2007-08 due to
hardening of interest rates and external factors such as rising petroleum
prices, currency fluctuations, etc.
The services sector is expected to grow due to high demand specifically in
financial services and business services, which includes the information
technology (IT) and IT-enabled services (ITeS).
However, in today's current global environment of high output growth, notable
inflation pressures, persisting global imbalances and perceived volatility of
capital flows, emerging market economies like that of India will have to remain
guarded in matters relating to economic growth and stability.
MOU :
2007-08:
The Corporation has already signed an MOU with the Ministry of Commerce, in
terms of which it has projected its total turnover (excluding wheat imports)
for the year 2007-08 at Rs.100000.000 Millions envisaging a significant growth
over 2006-07. The profit before tax is also projected to reflect an increase of
18% over profit projection included in the MOU for the year 2006-07.
THE WAY FORWARD:
Having successfully expanded overseas steel operations to Bulgaria and achieved
volumes from existing operations in Philippines, the Corporation now proposes
to undertake similar operations in Nigeria to give a further fillip to its
metals and minerals business. The Corporation also plans to expand its iron ore
business in a big way. It has recently been allotted a plot of land at Paradeep
Port for undertaking iron ore operations.
STC has played a significant role in developing public-private partnership. It
is now broadening the scope of services by developing similar relationships
with public sector companies. For this purpose, MOUs have been entered into
with leading PSUs such as NTPC, BEML, MSTC, etc. to exploit each others
resources with the ultimate objective of growth in businesses. Under the MOU
with NTPC, STC is supplying 5 million MT of non-coking steam coal for its power
plants. Till end-March'07, 1.6 million MT of coal valuing Rs.6430.000 Millions
had been delivered to various power plants of NTPC.
The Corporation has entered into an MOU for promotion of sale of Jatropha
plantation, bio-fertilizers, bio-pesticides within India and abroad. This also
includes sale of plant and machinery/ technology required for conversion of
Jatropha Seeds into Biofuels. Proposals have already been sent to Surinam,
Myanmar and Philippines.
With a view to achieving greater value addition and better price realization,
STC is planning to foray into processing of commercial crops, such as cotton
seeds in overseas countries.
The Corporation is reviving possibilities of entering into longterm arrangement
with FELDA, Malaysia for undertaking import, refining and packaging of edible
oils for sale in domestic markets under its own brand name.
With more new trade initiatives in pipeline, STC is confident of taking its
turnover and profitability to new peaks.
PERFORMANCE
: APRIL-JUNE 2007:
Sustaining the momentum in growth, the Corporation has achieved a turnover of Rs.27700.000
Millions during the first quarter of the current financial, reflecting a growth
of 94% over the first quarter a year ago and surpassing the proportionate MOU
target by 11%.
The Corporation's exports of Rs.7710.000 Millions during April-June'07 have
grown spectacularly by 172% and have exceeded the proportionate MOU target by
71%. Major items of exports are steel raw materials, chemicals and
pharmaceuticals, iron ore and gold jewellery.
The import turnover of the Corporation has also grown by 77% and marginally
exceeded the proportionate MOU target to reach over Rs.18000.000 Millions.
Major items of imports are bullion, hydrocarbons, minerals and metals, pulses
and edible oils.
The net profit (PAT) of the Corporation has jumped up by an impressive 86% and
surpassed the proportionate MOU target by 92%.
During the period, STC has signed an MOU with MSTC, another public sector
undertaking, in terms of which STC shall use MSTC services for procurement and
disposal of commodities including sharing their e-commerce portal. The two
companies shall follow a consortium approach when dealing with big customers
thereby sharing risks besides sharing market information related to common
areas of trade with each other.
STC has recently started tea operations in Nilgiri district of Tamil Nadu.
Under the operations, STC is procuring green tea leaves directly from small tea
growers, getting the same processed and selling the made tea in domestic
markets. Part of the processed tea shall also be used for blending for
producing quality tea for exports. These operations are being undertaken by the
Corporation with the twin objective of benefiting the small tea growers in
their economic upliftment and boosting its own tea business.
Notes
Forming Part of the Accounts for the year ended 31.03.2007 (Rs. In
Millions)
|
CONTINGENT LIABILITIES NOT PROVIDED FOR |
31.03.2007 |
31.03.2006 |
|
|
|
|
|
Claims against the Company not
acknowledged as debt (excluding legal cases where amounts are unascertainable) |
1883.100 |
917.300 |
|
Guarantees given by Banks on behalf of the
Company |
103.800 |
530.800 |
|
Sales Tax demands in dispute |
229.900 |
179.200 |
|
Bonds given to Customs Department |
10.000 |
10.000 |
|
Sales Tax liability which may arise on
re-assessment or assessment |
32.100 |
37.400 |
|
Estimated Tax incidence on amounts
disputed in appeal by Income Tax Department |
21.100 |
18.200 |
|
Bills Discounted |
8.500 |
34.400 |
|
|
|
|
|
Capital
Commitments pending execution |
6.400 |
53.100 |
Note:
In some of the cases amounts included under contingent
liabilities relate to commodities handled on Government of India account and liability,
if any, would be recoverable from Government of India.
DEBTORS,
LOANS, ADVANCES AND CLAIMS
·
In respect of two trading contracts, the Company paid
Rs1805.500 Millions to M/s. Neyveli Lignite Corporation Ltd. (A Govt. of India Undertaking)
on behalf of two Associates against sale'of scrap to be obtained from certain
plants to be dismantled. The plants have yielded/expected to yield scrap for
lower value and in respect of one of the contracts, it would not cover the
trade finance of Rs.1497.900 Millions provided by the Company. Though the
Company for recovery of its dues has initiated all legal actions including
criminal proceedings, yet as a measure of abundant precaution, against the
outstanding balance of Rs.874.300 Millionsas at the year end, the Company has
made a provision of Rs.300.000 Millions in addition to Rs.400.000 Millions
already made in the preceding year, after considering the realizable value of
the dismantled plant and other claims.
·
Purchase and Sales of scrap under the contracts referred in
(a) above have been accounted for only to the extent sold since there has been
no concluded sale of the plant to the Company. Sales tax has been accounted for
on resale basis. Additional liability of Rs.10.800 Millions which may arise if
the Company is not in a position to prove resale has been provided in
Contingent Liabilities.
·
In respect of a trading operation in Wheat undertaken for an
associate, disposal of goods and recovery have not taken place as per contract
due to quality problems and there are undisposed stocks of wheat and
unrecovered amounts outstanding from the Associate and Supplier viz., FCI.
Also, cases of theft and misappropriation of unlifted stocks exported to
Bangladesh have come to notice for which legal actions have been initiated. The
Company is pursuing for recovery of its funds. During the year stocks to the
extent of Rs.54.700 Millions have been written off, taking the aggregate
provision and write off made on party's account to Rs.454.000 Millions
·
In respect of the wheat trading referred in ( c ) above, the
Company had met the export commitment made to the Supplier FCI through other
wheat export transactions with the concurrence of FCI. However, FCI is seeking
to recover price differential considering the sale as inter-state sale at Open
Market Sales Scheme (Domestic) for Wheat instead of the concessional prices
charged for exports. The Company has also given a declaration for payment of
additional sales tax liability that may arise in respect of the export
transactions. Additional liability on account of the above account not
ascertained.
·
Advances include Rs.130.100 Millions recoverable from FCI
against unlifted quantities of wheat. In view of the position ascertained on
reconciliation of accounts with the said Corporation and recovery measures
undertaken by the Company, the advance is considered good for recovery and no
provision is considered necessary
·
These include Rs.20.400 Millions (Previous year Rs.48.800
Millions) being amounts carried over from earlier years some of which are
subject matter of dispute/litigation. In some cases, there are corresponding
payments withheld or receivables relating to commodities handled on Government
of India's accounts. No provision in respect of these dues is considered
necessary at this stage.
·
Balances in parties' accounts are subject to
reconciliation/confirmation in many cases and are subject to adjustments that
may arise on reconciliation.
·
Claims recoverable considered good include claims lodged on
Insurance Companies, which are in the process of acceptance/final settlements.
Fixed Assets:
·
Land
·
Building
·
Road,
Culverts, Sewerage and Water Supply Systems
·
Railway
Sliding
·
Plant and
Machinery
·
Furniture and
Fixtures
·
Air
Conditioners and Office Equipment
·
Vehicles
·
Computers,
Data processor and Communication
Website
Details :
Profile
:
Subject is a premier international trading house owned by the Government of India. Having been set up in 1956, the Corporation has developed vast expertise in handling bulk international trade. Though, dealing largely with the East European countries during the early years of its formation, today it trades with almost all the countries of the world.
By virtue of infrastructure and experience possessed by the Corporation, it plays
an important role in arranging import of essential items into India and
developing exports of a large number of items from India. It exports a large
number of items ranging from agricultural commodities to manufactured products
from India to all parts of the world. Because of Corporation's in depth
knowledge about the Indian market, subject is able to supply quality products
at most competitive prices and ensure that the goods reach the foreign buyer
within the prescribed delivery schedule. It also imports bulk commodities for
Indian consumer as per demand in the domestic market.
The eventful track record of more than 51 years has helped subject to
gear itself to face the fierce competitive challenges, seize business
initiatives and build on its core competencies.
With a global vision in effective management, result oriented approach, strong
belief in productivity and accountability, subject is future ready to take
advantage of the opportunities in the 21st century and help propel India
towards the new frontiers in world trade.
Performance
Indicators :
|
Annual Turnover: 2006-07 |
Rs.43350.000 Millions (US$ 3168
million) |
|
Net
Profit: 2006-07 |
Rs.880.000 Millions (US$ 19
million) |
|
Equity |
Rs.300.000 Millions (US$ 6.6 million) |
|
Net Worth (As on 31.03.2007) |
Rs.4340.000 Millions (US$ 96 million) |
Export
From India :
Subject exports a diverse range of items to a number of destinations throughout the world. Exports by subject vary from traditional agricultural commodities to sophisticated manufactured products.
Besides negotiating, contracting and shipping, subject seeks to introduce new
products, explore new markets and undertake wide ranging ancilliary functions
such as Product Development, Financing, Quality Control and Import of machinery
and raw materials for export production.
subject makes purposeful use of its world-wide connections, abundant
experience, up-to-date information about the market trends and long term perspective
on various commodities to ensure competitive prices, right quality and
adherence to delivery schedules to the buyers abroad.
Agricultural
Commodities :
·
Wheat
·
Cashew
·
Coffee
·
Rice
·
Tea
·
Tobacco and Rubber
·
Sugar
·
Extractions
·
Opium
·
HPS Groundnut
·
Spices
·
Castor Oil and Seeds
·
Jute Goods
Manufactured
Products :
·
Chemicals, Drugs and Medical Disposables
·
Engineering and Construction Materials
·
Processed Foods
·
Iron Ore
·
Steel Raw Materials
State Trading Corporation set for a makeover
New Delhi , May 15
THE State Trading Corporation of India Limited (STC) is all set for a
make-over from being a bulk trading agency in commodities to a one-stop shop that
offers specialised trade facilitation, by drawing from experience and contacts
built over five decades.
In an interview to Business Line, the Chairman-cum-Managing
Director of STC, Dr Arvind Pandalai, said, "In the medium- to long-term, with
so much competition and the market opening up, the trading scenario is going to
change. Unless we prepare ourselves through value-addition in trading
operations, nobody is going to come to us."
Accordingly, the Rs10,0000 Millions
trading giant has devised several plans to position itself through
"backward and forward integration and industrial participation programme
with best international companies so that not only our requirements are met but
the country too gets the best technology at affordable cost," said Dr
Pandalai.
"Our product range, strong financial base, proprietary
infrastructure and expertise in third-party trading would all be duly and fully
used to convert STC into a world trading company instead of being an
India-centric corporation," Dr Pandalai said.
On backward integration, he said, anybody who exports through us needs
certain inputs, whether it is raw materials, machinery, technology or
assistance in developing products, which might be available domestically or
globally.
"We are going to get all these through our connections and contacts
so that the exporters become permanent partners and together we can grow
manifold," Dr Pandalai said.
In certain cases, he said, this might even be financial requirements and
"if we see capabilities, we can get finances cheaper than anybody else as
we have structured financial operations which we had begun a couple of years
ago."
On forward linkage, he said, "Our clients (both exporters and
importers) may require certain inputs and want us to offload some of their
products somewhere else. We are helping to get these done besides assisting
them in running their plants efficiently."
Dr Pandalai said the corporation is going to certain high-tech areas and
tie up with patent-holders internationally, bring them to India and help them
set up units to manufacture their products which can be used as a base for
selling to India and also for third country exports.
He cited the example of proprietary items for which there was an
exclusive tie-up for production and marketing of ballistic protection
equipment, including bullet-proof armouring of vehicles, under the Centre's
plan to modernise police/paramilitary forces and forensic science laboratories.
He said the company would derive its strength from its earlier
experience in counter-trade deals on defence equipment.
Dr Pandalai also mentioned a recent MoU that STC had signed with the
Foreign Economic Relations Department of the Government of Uzbekistan. Under
this, STC would take some capable textile manufacturers from India to set up a
manufacturing base in Uzbekistan, using the abundant local cotton there to
manufacture yarn.
The final product could be exported to a third country or brought back
to India, which meant, he said, "instead of bringing large volume of
cotton, it is much easier to bring in yarn."
The STC Chief said, with disinvestment blues behind the company,
"we are going to fill up the vacuum for professional skills available at
various stages."
The company has begun "dialogues with reputed global organisations
to study the new areas into which the corporation plans to foray and develop a
structure and the inputs required so that the company can get the human skills
by staying one step ahead of competition."
On the current year's prospects for the company, Dr Pandalai said STC
would definitely do better than the MoU physical target it had projected to the
Government, particularly on the export front in areas such as steel, ore,
granite and pharmaceutical products.
On the import front, the company would consolidate its gains in trading
edible oil, parallel marketing of petro-products and a few other traditional
and non-traditional items.
FIVE
DECADES OF THE STATE TRADING CORPORATION
The State Trading Corporation of India Limited (STC) has entered the year of its existence in international trading. It has been a long sail for STC since its incorporation on May 18, 1956 as an autonomous company of the Government of India under the Indian Companies Act, 1956. Today STC has an extra-ordinary track record of five decades of service to the nation.
With a starting capital of Rs.10 Millions, STC initiated India’s trade with East European and other countries having bilateral trading agreements after its formation. Over the years, the Corporation has played a pivotal role as an international trading organization dealing in exports, imports and domestic trading activities as also an instrument of trade policy of the Government of India.
With the gradual expansion in business, the role and responsibilities of the Corporation have kept pace with the fast growth in trade of specific products such as iron ore, handicrafts and handlooms. To cater to the trade in specific commodities number, a corporation such as the Minerals and Metals Trading Corporation (MMTC), Cashew Corporation of India (CCI), Projects and Equipment Corporation (PEC) and State Chemicals and Pharmaceuticals Trading Corporation (SCPTC) were carved out of STC during the early 1960s and 70s to handle independent business of these items. Even the Handicrafts and Handloom Export Corporation (HHEC) and Tea Trading Corporation of India (TTCI) were subsidiaries of STC at some stage. Some of these corporations have since merged back with STC while others have become independent corporations.
STC has played the role of a catalyst in promoting exports from the small-scale sector by providing a package of services to them such as product development, import of raw material and machinery, quality control, financing, market intelligence, participation in trade fairs, technical know-how, packaging, costing, pricing, transportation, documentation and above all the STC goodwill. STC set up a number of common facility centers for the benefit of exporters. These included shoe upper unit for manufacture of shoe uppers, textile design centre to create new styles and designs of readymade garments in line with the prevailing fashion trends in international markets and design-cum-development center for sports goods industry. STC’s role in promoting exports of leather, leather products, woolen knitwear, processed foods, cosmetics, chemicals, drugs and disposables has been noteworthy.
As an instrument of the Government’s Trade Policy, STC arranged imports of essential commodities of mass consumption such as edible oils, wheat, sugar and pulses. It also handled a large volume of canalized imports of newsprint, natural rubber and life saving drugs to meet domestic shortages. In 1974-75 alone, the Corporation handled as many as 118 canalised items of import, which mostly comprised chemicals. Encouraged by the success achieved in handling bulk items, the Corporation set up an Industrial Raw Material Assistance Centre (IRMAC) which imported non-canalised raw materials in bulk and arranged off-the-shelf deliveries to actual users and registered exporters against valid advance licences, thereby passing them the benefits of bulk buying. The Corporation also imported banned or restricted items like phenol and industrial alcohol to meet their shortages in the country on advice. It imported raw materials and capital goods at most competitive prices, thereby saving foreign exchange.
STC ahs also successfully served its socio-economic objectives by ensuring remunerative prices to growers of certain agricultural products such as rubber, tobacco, shellac, lemon grass oil and sticklac through price support operations undertaken from time to time at the instance of the Government. These operations, whenever undertaken by the Corporation, had a salutary impact on prices.
The total turnover of STC attained a peak of Rs.36460 Millions during 1987-88 when STC imported about 2 million metric tones of edible oils. Profits were also at peak during the 1980s when STC earned an average profit before tax of Rs.560 Millions per annum.
Liberalisation of trade policies by the Government since 1991 did pose a challenge to the Corporation’s business in the initial years. But, STC geared itself well to meet the global challenges by embarking upon diversification of its activities.
Over the past five decades, STC has grown from strength to strength. It has since raised its equity capital to Rs.300 Millions, of which, Rs.280 Millions has been added by way of capitalization of reserves. In addition, STC has reserves worth Rs.2760 Millions today. The Corporation has earned profits since its inception and has contributed Rs.7750 Millions to the public exchequer by way of payment of dividends and taxes.
STC has developed infrastructure and expertise necessary to structure and implement any type of trade transaction. Backed by fourteen branch offices, mostly located at major port towns, the Corporation has its corporate office at New Delhi. Its major branches are situated at Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata and Mumbai. The Corporation has its own tank farms with a capacity of 40,000 MT at Mumbai Port for storage of liquid cargo, own warehouse at Kakinada Port for dry cargo spread over an area of 2.26 sq. ft. and godown space at Jalandhar measuring about 13,000 sq. ft. besides storage at other ports on long-term lease. The credit limits enjoyed by STC from various Indian banks and international financial institutions are far higher than most private sector companies in the country.
STC has also developed large, real estate in the form of offices and residential accommodation at major metropolitan cities including a housing colony for its employees at New Delhi. Currently, STC is engaged in undertaking exports, imports and domestic trading in a large number of items. Exports by STC vary from agricultural commodities like wheat, rice sugar, coffee, extractions, cashew, castor oil, castor seed, pulses, coarse grains, jute goods and tea to manufactured products like chemicals, drugs. Pharmaceuticals, medical disposables, textiles, garments and foods. STC also undertakes offshore trade, making the best use of its experience of about five decades in international trading. In one such transaction, STC realized money under Government of India’s debt repayment plan by procuring rice from Vietnam and exporting it to Singapore.
In the past three years, the Corporation also made forays into many new areas of trade such as the import of hydrocarbons, minerals, metals, fertilizers on commercial account, petro-chemicals, IT products, and in exports of iron ore, chemicals and drugs. STC has thus emerged as a leading exporter of agro products and importer of precious metals and other bulk items in the country.
As a result of diversification
of business activities, during 2004-05, the STC Group has achieved an all-time
high turnover exceeding Rs.100000 Millions and earned a net profit after tax of Rs.270
Millions.
(PIB Features)
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.47 |
|
UK Pound |
1 |
Rs.77.98 |
|
Euro |
1 |
Rs.57.92 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
81 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|