Equity Analysis

The Board of Directors presents the 68th Annual Report of the Company and its Audited Statement of Accounts for the year ended March 31, 2024 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 2023-24 vis-? -vis the previous year is summarized in the table below:

Crore

In pursuance of direction of the Ministry of Commerce & Industry and approval of the Board of Directors, STC did not undertake any business activities during 2023-24 also. However, the Company continued monitoring of counter trade obligation as per directions of the Department of Commerce, Govt. of India. The accounts of the company were prepared on ‘non-going' concern basis.

The rental income is the only source of income of STC presently and available surplus ofice space at Jawahar Vyapar Bhavan has been rented out to various Govt. Departments/ PSUs/PSU Banks, etc. The net rental income of STC was marginally higher in 2023-24 at fi 77 crore (approx.) as compared to fi 73 crore (approx.) during 2022-23. STC's cash liabilities may exceed its available cash reserves depending on one time settlement with bank, release of balance of associates, outcome of legal cases etc. During the year 2023-24, the Company reported a net profit (after tax) of fi 52.21 crore as against the net profit of fi32.89 crore reported during the year 2022-23. The same was mainly due to enhanced rental income and reduction in establishment cost in view of overall reduction in the manpower of the Company. However, there was no trading income during 2023-24 due to stoppage of business activities by STC since November 2020 in pursuance of direction of the Ministry. During the year, STC has been able to recover/realise an amount of fi 19.20 crore through Hon'ble Delhi High Court in one of the legal case filed by STC against one of its associate.

The Company continued to follow-up with the lender banks for expediting the finalisation of One Time Settlement (OTS) for settling their remaining dues in line with the decision taken during the high level meeting chaired by Hon'ble CIM on 29.08.2019 regarding One Time Settlement of dues of STC with the Banks. An amount of fi 1100 crore has already been paid to the lender banks and as per decision of the high level meeting, STC's identified immovable properties worth fi 300 crore (approx.) are to be transferred to Banks on as is where is basis as full and final settlement under the OTS. However, in view of the complexities involved in transferring the said properties, STC is pursuing alterna tive course of settlement with lender banks instead of transfer of immovable properties and a formal proposal has been submitted to the lender banks, which is under consideration with lender bank. The case filed by Consortium of lender banks is still going on in Debt Recovery Tribunal (DRT). The status of OTS is regularly being apprised in DRT proceeding. These updation of OTS and DRT has been informed to MOC&I. The amount of liability is subject to final settlement / court order.

The Company had a negative net worth of fi955 crore approx. (excluding revaluation reserves) as on 31.03.2024. Further, the accumulated losses of STC were fi1082.68 crore as on 31.03.2024, therefore the Board of Directors of the Company have not recommended any dividend for the year 2023-24.

An amount of (-) fi204.06 Crore (including revaluation reserve of fi884.60 Crore) was available in the other equity of the company as on 01.04.2023. An amount of fi73.36 Crore (PAT: fi52.21 Crore and other comprehensive income fi21.15 Crore) has been transferred to retained earnings. Accordingly, as on 31st March, 2024, the other equity stood at (-)fi133.88 Crore.

STC had 126 employees on its rolls as on 31.03.2024, which includes 71 Managers and 55 Stafi (excluding contractual employee).

During the year, the Company recruited one Company Secretary on fixed term contract basis.

During the year 2023-24, the Company continued to maintain harmonious industrial relations. No man days were lost. Personnel policies and welfare schemes were suitably improved/amended so as to bring them in line with the overall interest of the Corporation.

The Company has been implementing the Government of India's directives and guidelines for SC/ST/OBC/PWD issued from time to time with regard to recruitment of SC/ST/OBC and difierently abled candidates.

During the year 2023-24, the company took initiatives to nominate employees for difierent training programmes. In all, six employees were nominated to attend trainings in various domains under Trainer to Trainee program (ToT) wherein nine man days were dedicated during Vigilance Awareness Week.

As a Central Public Sector Enterprise (CPSE), in pursuance of Oficial Language Policy, the Company is striving towards maximum use of oficial language i.e. Hindi in its day-to-day oficial work. In order to maximise the use of Oficial Language Hindi in day to day oficial work, necessary training is provided to the employees from time to time through Hindi workshops. As a result, there is notable increase in use of Hindi in the Corporation and continuous progress is being made towards achievement of the targets of annual programme.

In addition, like every year, this year too ‘Rajbhasha Pakhwada' was organised in the Corporation from 14.09.2023 to 28.09.2023, wherein various Hindi competitions and events were conducted. On the occasion of valedictory function, Chairman & Managing Director and Director (Fin.) gave away the awards to the winners of Hindi competitions and encouraged them. The Town Oficial Language Implementation Committee (Undertaking-1), Delhi awarded consolation prize to STC for its best performance in oficial language implementation.

During the year 2023-24, measures were undertaken to expedite timely completion of investigations and disciplinary proceedings as per CVC's instructions. Further, CTE Type inspections were conducted in respect of service matters being carried out in the organisation, as per CVC's guidelines.

Vigilance Awareness Week 2023 (VAW) was observed in the Company from 30th October, 2023 to 05th November, 2023 on the theme "Say no to corruption; commit to the

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jgsa?Ÿ at Corporate Ofice and Representative Ofices. On this occasion, Integrity Pledge was administered on 30th October, 2023. Various in-house activities such as Essay Writing competition, slogan writing competition etc. were also undertaken during VAW 2023. As per the CVC's directives, a three (3) months campaign (16th August, 2023 to 15th November, 2023) was undertaken on difierent Preventive Vigilance measures as a prelude to Vigilance Awareness Week 2023, for which various Committees were constituted to monitor the implementation of activities.

During the year 2023-34, vigilance clearances have been issued in respect of 136 employees for various purposes such as superannuation, Foreign visit, applying for jobs outside the Corporation, periodical review under 56(j). Total 17 APRs have been scrutinized during the year and 23 files relating to sale/purchase of moveable/ immoveable property(s) have also been scrutinized. During 2023-24, nine(09) complaints were received and disposed ofi. Further, 01 disciplinary proceeding case for major penalty has been initiated and oral inquiry is in progress. Action on 05 disciplinary proceeding cases is in progress as on 31.03.2024.

In view of extraordinary losses sufiered by STCL leading to erosion of its net worth and remote possibility of its turnaround, the Union Cabinet had, in August 2013, decided to wind up STCL. Accordingly, a winding up petition was filed by STCL before the Hon'ble High Court of Karnataka and the same continues to be pending due to objections raised by Banks. STCL has a negative net worth and no business operations are being undertaken by STCL.

As per the requirement of Regulation 34(2) (e) and 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. ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act 2013, a copy of the Annual Return is available on the website of the Company: www.stclimited.co.in.

The Company has a laid down 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 has been set up to redress any complaints received in this regard. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year, Committee's report on one sexual harassment complaint has been submitted to the Competent Authority.

In order to promote transparency and accountability, an appropriate mechanism has been put in place in the Company to provide information to citizens under the provisions of Right to Information (RTI) Act, 2005. For this purpose, the Company has, in line with the RTI Act, nominated Central Public Information Oficers (CPIOs) for its Divisions at Corporate Ofice, New Delhi and at Representative Ofices across the country. For the convenience of public, a coordinating CPIO has also been nominated. First Appellate Authorities have also been nominated for considering the appeals of information seekers against the orders of CPIOs.

The Company did not accept any public deposits during the year under review. Therefore, the requirements of Chapter V of the Companies Act, 2013 are not applicable to it.

During the year 2023-24, the Company did not provide/ give any loans, guarantees or made any investment as specified under section 186 of the Companies Act, 2013.

The Company did not enter into any contracts or arrangements with related parties as referred to in subsection (1) of section 188 of the Companies Act, 2013, during the year under review as STC is not undertaking any business activity.

As per Section 135 of the Companies Act, 2013, the Company was not mandated to allocate CSR budget for the year 2023-24 due to average net loss of last three preceding financial years. Moreover, in pursuant to direction of the Administrative Ministry, STC is not undertaking any business activity. Thus, no CSR activities were undertaken during the year 2023-24.

STC's annual report on Company's CSR activities in prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is placed at

During the year 2023-24, the Company made procurement worth fi2.29 crore from MSEs, which accounted for 87 percent of the total value of annual procurement of fi2.64 crore made by STC of the goods produced and services being rendered by MSEs as against 25 percent target specified in the guidelines for procurement from MSE. The procurement from women and SC/ST entrepreneurs during the year 2023-24 was NIL and the same was either due to no participation by women and SC/ST entrepreneurs in the tender process or no women and SC/ST entrepreneurs being declared successful in the procurement tender process. The Company is following applicable procurement guidelines including procurement from GeM.

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. However, no business activities were carried out by STC during the year 2023-24.

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules and comply in all material aspects with the relevant provisions of the Companies Act, 2013 and other accounting principles generally accepted in India. Further, financial statements have been prepared on non-going concern basis in pursuance of directions given by the Board of Directors in its 639th adjourned meeting held on 05.04.2021.

The financial statements have been prepared under the historical cost convention on accrual basis except certain financial assets and liabilities which are measured at fair value of amortized cost at the end of each financial year. Management has made judgements, estimates and assumptions that afiect the application of accounting policies and the reported amount of assets, liabilities, income and expenses and actual results may difier from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates wherever necessary are recognized prospectively.

Pursuant to Section 92(3) of the Companies Act, 2013 a copy of Annual Return is available on the website of the Company: www.stclimited.co.in.

During the financial year 2023-24, five (5) meetings of the Board of Directors were held.

All the Part-time Non-Oficial Directors (Independent Directors) on the Board of STC have afirmed that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the financial year ending 31.03.2024.

STC, being a Government company, all members of the Board are appointed by the President of India through Administrative Ministry i.e. the Ministry of Commerce & Industry, Government of India, which, inter-alia, fixes the remuneration through their appointment orders/pay fixation orders.

The non-executive part-time oficial Directors (Government nominees) are not entitled to any remuneration or sitting fees. The part-time non-oficial (Independent Directors) are paid sitting fee for each Board / Committee meetings attended by them as approved by the Board from time to time as per the limits laid down in Companies Act, 2013 and the related rules.

The eligibility criterion for appointment of Independent Directors is laid down by the Department of Public Enterprises, Government of India which is as per the relevant provisions of Companies Act and the SEBI Regulations. The positive attributes expected to be exhibited by the Independent Directors are conveyed to them on their appointment. Further, every year, they submit a declaration in the prescribed format to confirm that they continue to qualify as Independent Directors.

Ministry of Corporate Afiairs vide its notification No. GSR 463(E) dated June 5, 2015 exempted Government Companies from certain provisions of the Companies Act, 2013, which include, inter-alia, sub section (6) of Section 149, subsections (2), (3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration. As per the said notification, Section 134(3) (p) regarding performance evaluation of directors also shall not apply to Government Companies in case the directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the Company.

The appointment of Chairperson, Functional Directors, Part-time Oficial Directors (Government Nominee) as well as Part-time non-Oficial Directors (Independent Directors) on the Board of STC is made by Government of India through the Ministry of Commerce & Industry. Further, the terms and conditions of appointment as well as tenure of all directors are also decided by the Government and there is a procedure for evaluation of performance of Chairperson and Functional Directors by the Administrative Ministry.

Risk Management Framework was implemented in the Company to add objectivity to the process of risk assessment while taking a decision on accepting or rejecting a trade proposal. The Risk Management Framework measures the risk involved in a business proposal in the form of a total risk score which is weighed vis-? -vis available risk mitigation measures. However, no business activities were carried out by STC during the year 2023-24 in pursuance of the directions of Administrative Ministry/Board. Further, accounts of the Company for the year 2023-24 were published on non-going concern basis in pursuance of Board's direction. Further, an Anti-Fraud Policy has been implemented in STC in order to enforce controls and to aid in prevention and detection of frauds in the Company. The Policy intends to promote consistent legal and ethical 7 organizational behaviour by assigning responsibility for the development of controls, and providing guidelines for reporting and conduct of investigations of suspected fraudulent behaviour.

During the year, guidelines were in place requiring forward foreign exchange cover to be taken in respect of transactions involving STC funds. The Company did not take any exposure in volatile commodities/market condition during 2023-24 as STC is not undertaking any trade and therefore no such transactions were undertaken by the Company

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 2023-24 forming part of this report is placed at Annexure-III 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 Practising Company Secretary in this regard, forming part of this Report, are placed at Annexure -IV. The Company has got its Secretarial Audit for the financial year ended 31st March, 2024 conducted by M/s Parveen Rastogi & Co, Practising Company Secretaries and their report along with Management replies to the observations made by the Secretarial Auditors, forming a part of this Annual Report is places at Annexure -V In line with the best practices, the Company has made available all information of interest to its investors on the Company's website, namely, www.stclimited.co.in The Company has also put in place various policies such as:

• Whistle Blower Policy

• Web Archival Policy

• Policy on Preservation of Documents

• Policy on Materiality of Related Party Transactions and dealings with Related Party Transactions

• Code of Conduct regarding prohibition of Insider Trading and Code of Fair Disclosure and Conduct

• Policy for determination of materiality of events and information and their disclosures.

• Policy for determining material subsidiaries.

The above policies are also available on STC's website. During the year 2023-24, Separate Meeting of the Independent Directors was held on 27.03.2024 at the registered ofice of the Company.

The Central Government has not prescribed the maintenance of cost records for the Company under Section 148(1) of the Companies Act, 2013.

M/s PVAR & Associates, Chartered Accountants were appointed as Statutory Auditors of the company for the FY 2023-24 by Comptroller & Auditor General of India (C&AG). Their report, along with replies of management, is attached and forms a part of this report.

COMMENTS OF C&AG

The comments of C&AG under Section 143(6) of the Companies Act, 2013, on the accounts of the Company for the year 2023-24 are attached and form a part of this report.

Pursuant to the requirement under 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, 2024, 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 afiairs of the company at the end of the financial year and of the profit and loss of the company for the year 2023-24; (c) the Directors have taken proper and suficient 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 non-going concern basis for the year ended 31st March, 2024; (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 efiectively except the qualified opinion of independent auditor's report. The management replies of these qualifications are covered in the Annual Report; (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 efiectively.

Board, while deliberating on the Director's Responsibility Statement observed that at present, STC is not carrying 8 out any business activity and is continuing as a non-operative Company for the time being. Further, the positions of Functional Directors except CMD and Director (Fin.) (Additional Charge) are lying vacant. Administrative Ministry has been requested from time to time to fill-up the vacant positions and appointment is yet to be made by the Administrative Ministry against these vacant positions. The accounts of STC for the year 2023-24 were published on non-going concern basis. Hence all the above clauses may not be applicable to STC and therefore Director's Responsibility Statement to be read along with Statutory Auditor's Report and CEO & CFO Certificate for the FY 2023-24.

Further, Auditors/CAG comments on annual accounts of STC for the year 2023-24 form part of the annual accounts and are available in this report.

Since the last Annual General Meeting held on 21st September, 2023 the following changes have been taken place in the Board of Directors of the Company: Ministry of Commerce & Industry, Department of Commerce vide its Order No. 11/36/2001-FT (M&O) dated 22.04.2024 have conveyed the appointment of Shri Siddharth Mahajan, IAS (RJ: 2003), Joint Secretary, Department of Commerce, Ministry of Commerce and Industry as Government Nominee Director on the Board of The State Trading Corporation of India Limited with immediate efiect. The Board welcomes the newly appointed Director and hopes that the Company shall immensely benefit from his rich and varied experience Pursuant to the provisions of Section 152 of the Companies Act, 2013, Smt Arti Bhatnagar would retire by rotation at the ensuing Annual General Meeting and being eligible, have ofiered herself for re-appointment. As per Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a brief resume of all Directors seeking appointment /reappointment are given in the notice convening the 68th Annual General Meeting of the Company.

1. Dr. Bhim Singh, Independent Director had tendered his resignation from the Directorship of the Company due to personal reasons vide his letter dated 12th February, 2024.

2. Shri Vipul Bansal, Joint Secretary ceased to be a Director on the Board of STC as per Ofice Order No. 11/36/2001-FT (M&O) dated 22.04.2024 of Department of Commerce, Ministry of Commerce and Industry w.e.f 22.04.2024.

The Board appreciates the valuable guidance and contributions made by Dr. Bhim Singh and Shri Vipul Bansal during their tenure as Members of the Board.

The Company has nominated its CMD, all Functional Directors, Company Secretary and CFO as Key Management Personnel (KMP) pursuant to Section 203 of the Companies Act, 2013. Details regarding appointments of Functional Directors are given elsewhere in this report. No Functional Director resigned during the year. Further, the Board of Directors in its meeting held on 03.03.2021, had appointed Shri S,K. Meena, Joint General Manager as one of the KMPs of the Company.

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 has constituted various Committees of Directors like Audit Committee, Stakeholders Relationship Committee, CSR Committee, Nomination & Remuneration Committee and Risk Management Committee . The composition of these committees and other details are mentioned in the Corporate Governance Report forming part of and annexed to the Board's Report.

Pursuant to the requirements of Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and DPE guidelines on Corporate Governance for CPSEs, the Board Members and Senior Management Personnel have afirmed compliance to the Code of Conduct for the financial year ending 31st March 2024 .

The Board expresses its gratitude for the continued co-operation and support provided by the Ministry of Commerce & Industry, other Ministries and Departments of the Government of India, various state governments, financial institutions, banks, 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.