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Annual Report 2008-2009
Public Sector Corporations

MMTC Limited

MMTC is widely recognized as India’s largest international trading company and the first Public Sector Undertaking to be awarded Premier Trading House status in the country. It is actively involved in exploring overseas markets for exports and sourcing material for domestic needs. With focus on ‘bulk’ operations, MMTC primarily has seven core commodity groups viz. Minerals, Precious Metals, Coal & Hydrocarbons, Fertilizers & Chemicals, Agro, Metals and General Trading.

Performance

Fiscal 2008-09 has been a landmark year for MMTC for various reasons. The global economic growth has slowed down during 2008-09; the commodity and stock markets have witnessed huge volatility. In this backdrop, the Company has shown a remarkable performance during 2008-09 achieving a milestone turnover of Rs 36905 crore during the year 2008-09 as against Rs 26423 crore achieved during the last year registering an increase of 40%.

The net profit of the Company during 2008-09 was Rs.165 crore as against last year’s net profit of Rs.200 crore. The decrease in profit is mainly due to steep fall in prices of some of the major commodities due to global recession. The prices of Pig Iron, Iron Ore, LAM Coke etc have fallen by more than fifty percent during the year 2008-09.

The summary financial performance of the Company during the year 2008-09 is given in Table 12.1.

Computerization and Technology Elevation
 
During the year, company’s information technology capabilities were further strengthened in the light of experiences gained, aiming at enhanced management controls/ monitoring through generation of additional/modified reporting features for operational excellence. IT systems aiming at enhanced transparency, accuracy and reliability, concepts of e-payments, e-tendering & e-auction were successfully introduced.
 

Box 12.1

Highlights of the Performance of MMTC during 2008-09

  • Highest ever turnover of Rs.36905 crore – growth of 40% over previous year and achievement 64% higher than the MOU target.

  • All time high import turnover of Rs. 30767 crore – growth of 50% over previous year and achievement 71% higher than the MOU target.

  • Highest ever export business of Rs.4580 crore – growth of 17% over previous year and achievement 33% higher than the MOU target.

  • Highest ever employee productivity at Rs. 19.61 crore.

 

Table 12.1

Financial Performance of MMTC for 2008-09

(Rs. crore)

 

Actual
2008-09

Actual (Prov.)
2008-09

MOU 2008-09
(Excellent)

Trade Performance

Exports

3911.45

4579.84

3431.00

Import

20448.96

30767.20

17940.00

Domestic

2063.05

1557.58

1153.00

Total Turnover

26423.46

36904.62

22524.00

Trading Profit

429.76

321.62

313.00

Profit Before Tax

324.60

250.42

192.00

Profit After tax

200.48

165.42

135.00

Ratios (%)

     

Trading Profit to Sales

1.63

0.87

1.39

Overhead to Sales

0.59

0.51

0.69

Net Profit to Sales

0.76

0.45

0.60

Overhead to Trading Profit

36.26

58.93

50.00

Source: MMTC

The security of IT systems was further enhanced through strengthening of Corporate IT policy and procedures. During the year, reliability and availability of system was further augmented by upgradation of technology to the latest available platform and building up redundancy for circumventing technological failures.

Human Resources

Cordial and harmonious industrial relations prevailed in MMTC throughout the year 2008-09 with no man days being lost. Regular meetings were held with the Unions/Associations at local level and Federation/Association at the Apex level under Joint Consultative Machinery/Structured Scheme of Meetings for arriving at amiable resolution of personnel issues with a view to achieve Company’s goals and objectives.

The aggregate manpower of the company as on 31st March 2009 stood at 1882, including six board level executives and a Chief Vigilance Officer, the balance comprising of 613 officers, 1167 staff and 96 workers. This manpower strength includes 24 officers, 137 staffs and 96 workers of erstwhile Mica Trading Company Limited, which had been merged with MMTC pursuant to the orders of BIFR. Women employees represented 18.22% (343 employees) of the total manpower. The representation of SC, ST, OBC and persons with disability (PWD) was to the extent of 21.25% (400 employees), 7.27% (137 employees), 9.40% (177 employees) and 1.64% (31 employees) respectively. During the year 45 officers including 5 from SC and 4 from OBC categories were inducted through campus recruitment. Presidential Directives on reservations for SCs, STs, OBCs and PWD in services were followed fully in recruitment and promotion. In an effort for rightsizing the manpower, Voluntary Retirement Scheme was offered which was availed by 9 officers, 32 staff cadre employees and 28 workers.

Implementation of Official Language Policy

MMTC has consistently strived to implement Official Language policy and meet the targets given in the Annual Programme of the Department of Official Language, Ministry of Home Affairs, Government of India. Towards this and to promote usage of Hindi by employees of the Company, several programs in the form of Hindi Workshops, Hindi Week, and Hindi Fortnight were organized at the Corporate Office and Regional Offices.

During the year 2008-09, all efforts were made to meet the objectives of the Rajbhasha Policy of Government of India. To encourage the use of Hindi language, under the existing schemes, around 300 employees were rewarded. The Corporate Office of MMTC bagged the third prize instituted by TOLIC, Delhi for outstanding work in implementation of the Hindi language. MMTC’s regional offices at Goa and Kolkatta were awarded regional Rajbhasha awards. MMTC’s official website is bilingual and has been awarded by the Department of Commerce as the best website.

Training in Rajbhasha has been successfully concluded in Corporate Office and Regional Offices. During the year, Hindi workshop/Hindi week and other technical programmes were conducted to encourage the use of Hindi. For Regional Offices, a scheme for rewarding with a Shield is being introduced shortly for those offices where exemplary work is being carried out in promoting Hindi. Efforts have been made to encourage the use of Rajbhasha in correspondence and communication. During 2008-09, the Parliamentary Committee on Rajbhasha inspected four Regional Offices and expressed satisfaction over the efforts made to promote the use of Rajbhasha.

MMTC Transnational Pte. Ltd., Singapore (MTPL)

MMTC Transnational Pte. Ltd., Singapore (MTPL) is a wholly owned subsidiary company of MMTC. During 2008-09 it achieved highest ever business turnover of US$ 687 million. During the year, MTPL generated highest ever profit after tax of US# 6.8 million. The net worth of MTPL stood at US$ 15 million as on 31st March 2009. MTPL continues to enjoy “Global Trader” status awarded to it by IE Singapore.

Neelachal Ispat Nigam Ltd. (NINL)

Neelachal Ispat Nigam Ltd., a company promoted by MMTC, IPICOL, NMDC, MECON etc., has set up an iron & steel plant of 1.1 million tonnes capacity, 0.8 million tonne coke ovens and a by-product unit with captive power plant with total expenditure of nearly Rs.2000 crore at Kallinganagar, District Jajpur, Orissa. During the year ended 31st March 2009, NINL maintained its position of being the largest Pig Iron producer & exporter in the country. The total turnover of the company for the financial year 2008-09 was Rs.1316 crore, as compared to a total turnover of Rs.1474 crore during the previous year i.e. 2007-08.

NINL posted a cash profit of Rs. 160.82 crore and profit before tax of Rs.60.16 crore after providing for interest, depreciation and tax in 2008-09 (provisional).

Other Projects

Aiming at diversification and with a view to add value to its existing trading operations, MMTC has undertaken various strategic initiatives using the public – private partnership route. It has effectively integrated vertically, both backwards and forwards to encompass the entire gamut of the product process starting from the stage of manufacture and ending with distribution to the ultimate consumer. These strategic initiatives to enhance MMTC’s future sustainability include:

  • Setting up of a commodity exchange (for which in-principle approval of Forward Market Commission has been received);

  • Joining hands with an international producer as a joint venture partner for setting up a gold/silver medallion manufacturing unit, which would also include a gold refinery as an integral part.

  • MMTC plans to set up in partnership with a leading Indian company, chain of retail stores at various cities in India for medallions, jewellery and its homegrown brand of “SANCHI’ silverware.

  • MMTC is promoting a joint venture Company with M/s TATA Steel Ltd for investing in mining infrastructure.

  • For exploration and development of mines for minerals-ferrous and non-ferrous ores, precious metals, diamonds and coal etc. MMTC has been allotted a coal mine in Jharkhand having estimated reserves of about 700 million MT, pre-feasibility study of which has already commenced and application for prospecting license submitted to the concerned authorities.

  • In the area of logistics, MMTC has already promoted development of a temporary jetty at Ennore port for loading iron ore. MMTC has also received government approval for acquiring an equity stake in the consortium, which has undertaken the project for construction of a permanent iron ore-loading berth at Ennore to decongest Chennai port.

  • To facilitate promotion of two-way trade, MMTC is progressing satisfactorily on setting up of a free trade and warehousing zones on lines similar to Special Economic Zones, at Greater Noida, Haldia and Kandla.

State Trading Corporation of India Limited (STC Ltd.)

STC was set up on 18th May 1956 primarily with a view to undertake trade with East European countries and to supplement the efforts of private trade and industry in developing exports from the country. STC has played an important role in the country’s economy by arranging imports of essential items of mass consumption (such as wheat, pulses, sugar, edible oils, etc.) into India and developing exports of a large number of items from India. The core strength of STC lies in handling exports/imports of bulk agro commodities. However, during the past few years, STC has diversified into exports of steel raw materials, gold jewellery, iron ore, chemicals & pharmaceutical items and imports of bullion, hydrocarbons, minerals, metals, fertilizers, petro-chemicals, etc. This has helped STC achieve record breaking performances in the recent years. STC is today able to structure and execute trade deals of any magnitude, as per the specific requirement of its customers.

The overall performance of the STC during the years 2006-07, 2007-08 and 2008-09 vis-a-vis targets for the full year 2008-09 is given in Table 12.2 below.

Performance

In spite of global economic slowdown and liquidity crunch, STC was able to exceed the performance targets of turnover and profitability set out in the MOU for the year 2008-09. The total turnover of Rs.18787 crore achieved by STC during the year reflects a growth of 19% over the previous year. The growth in turnover was achieved despite there being no wheat imports on Govt. behalf during the year.

Exports

STC had to adopt a cautious approach and deliberately reduce the scale of operations in some areas due to the global slowdown leading to liquidity crunch and consequential delays in receipt of export proceeds.

During 2008-09, STC was able to augment its sugar business and effected exports worth Rs 213 crore - 11% higher than the previous year. Exports of maize/rice also rose to Rs 442 crore – about 2.4 times the exports of these items in the previous year. Having revived exports of castor oil in the previous year after a gap of many years, STC exported castor oil worth Rs 166 crore as against only Rs 14 crore in the previous year. However, overseas steel operations suffered a setback because of stoppage of operations in Bulgaria due to insolvency proceedings against STC’s associate and deliberate decision of STC to go slow in exports to Philippines steel plant due to volatility of overseas steel market. As such, exports of steel raw materials fell from Rs 1613 crore in the previous year to Rs 439 crore. Total exports during the year amounted to about Rs 2100 crore.

Table 12.2

Financial Performance of STC

(Rs. Crore)

 Item

2006-07

2007-08

2008-09

2008-09

Actuals

Actuals

Target

Estimates

Exports

2927

4002

4500

2083

Imports

10692

10773

11300

15466

Domestic

716

999

900

1238

Total Turnover

14335

15774

16700

18787

Profit Before Tax

123

177

110

134

Profit After Tax

88

124

 –

73.5

Source: STC

 

Small consumer packs of edible oils in STC’s own brand ‘DARPAN’

Imports

During 2008-09, the import turnover exceeded the MOU target by 37% to reach an all time high of Rs 15466 crore. Substantial growth in imports especially of Hydrocarbons, Minerals, Metals and Petro-chemicals contributed to the high import turnover.

In spite of high gold prices, liquidity crunch faced by investors and bullion dealers leading to low demand of gold in India, STC was able to arrange import of bullion worth about Rs 5000 crore. Thus, bullion emerged as the single largest item of import constituting 32% of total import turnover - an increase of 24% over the previous year. Imports of petrochemicals took a huge leap and reached Rs 3200 crore as against about Rs 2200 crore during 2007-08 thereby constituting 21% of the total imports of STC. During the year, STC was asked by the Govt. of India to import urea. Accordingly, STC arranged import sale of fertilizers worth Rs 1615 crores as against imports of only Rs 38 crore in the previous year. Import sales of edible oils crossed Rs 1000 crore mark as against Rs 473 crore in the previous year. This included about Rs 400 crore worth of sales resulting from edible oils imported by STC on behalf of the Government. In spite of crashing commodity prices, imports of hydrocarbons, minerals & metals by STC increased by 172% to reach Rs 3915 crores. In a notable achievement, STC secured order for supply of 8 million tons of non-coking steam coal from NTPC for its various power plants located throughout the country.

 

 

Bullion Import by STC: Rs.5000 crore during 2008-09

During the year, STC also uxndertook pulses import on behalf of the Govt. of India besides import of pulses on commercial account. The imports had the desired impact on domestic prices which declined significantly on arrival of imported quantities. The pulses operations together yielded a turnover of Rs 642 crore.

Domestic Sales

During the year, domestic sales grew by 24% to reach an all time high of Rs 1238 crore. Around 70% of the domestic sales were contributed by high volumes achieved in respect of hydrocarbons, minerals and metals. Domestic trading in oilseeds resulted in a turnover of Rs 214 crores.

The domestic tea operations involving direct procurement from small growers and processing resulted in a turnover of Rs 27 crore including exports worth Rs 12 crore.

Profitability

During the period under review, STC earned a PBT of Rs 134 crore thereby surpassing the MOU target by 22%. However, the profit was lower than the profit earned in the previous year mainly due to lower trading margins owing to global meltdown and also because of losses suffered on sale of pulses imported on behalf of the GOI during the year under review.

Excellent MOU Rating

The Corporation, for the fifth time in a row, has been rated as “Excellent” in terms of the MOU entered with the Government of India for the year 2007-08. The Corporation has also been selected for MOU Excellence Award for 2006-07 by the Department of Public Enterprises, Ministry of Heavy Industries and Programme Implementation.

Box 12.2

Recognitions and Awards for STC

  • Achieved ‘Excellent’ rating in terms of MOU for the year 2007-08 consecutively for the fifth time.

  • 2nd rank among trading companies of the country according to a Survey by Dun & Bradstreet.

  • 7th rank among top 100 wealth creators of India by Economic Times.

  • Won Niryat Shree Award (Silver Trophy) of FIEO for 2005-06 under multi product Star Export House - Non-SSI category.

  • Ranked 13th in terms of net sales and 33rd on overall basis among 134 PSUs as per Public Enterprises Survey: 2007-08 brought out by Department of Public Enterprises

Dividend

The Corporation has paid an interim dividend for the year 2008-09 @25% of its paid-up equity capital of Rs 60 crore. Payment of further dividend will be considered after the accounts have been audited.

Non-coking stream coal imported by STC for NTPC’s power plants

Spices Trading Corporation Ltd (STCL)

STCL Ltd., a wholly owned subsidiary of STC of India Ltd, was originally incorporated in the name and style as “Cardamom Trading Corporation Limited” as a private Limited Company under the Companies Act, 1956 in October 1982. Consequent to the change of name, the Company obtained a fresh certificate of incorporation under the name of Spices Trading Corporation Limited with effect from August 1987 in order to widen its marketing base from cardamom to other range of spices. Thereafter, STCL became a subsidiary of the State Trading Corporation of India Ltd. with effect from 14.9.1999 and shares held by the Ministry of Commerce were transferred to the State Trading Corporation of India Ltd.

With the diversified trading activities, the Company’s name has been further amended its name from Spices Trading Corporation Limited to ‘STCL Limited’ and a fresh Certificate of Incorporation under the name of ‘STCL Limited’ has been obtained with effect from August 13, 2004.

Box 12.3
Fresh initiatives by STC

  • Backward integration by establishing long-term tie-up with coal mining companies in India and abroad.

  • Acquired a plot of land at Paradip Port for facilitating iron ore exports.

  • Efforts are being made to acquire another plot of land at Haldia Port.

  • Initiated trial cultivation of jatropha in Namibia on an area of about 25 hectares which is to be scaled up to cover an area of 66,000 hectares in the first phase. Discussions are on for starting Jatropha plantations in Suriname, Guinea-Bissau, Senegal, Angola and Mozambique.

  • Signed MOU with a reputed international edible oil supplier for refining, import and bulk/retail sale of imported edible oil in India. Feasibility of setting up a JV being examined.

  • Operations involving procurement of tea domestically from small growers for processing and subsequent sale being extended by enlisting more small growers and taking more processing units on long-term lease.

 


Sri Jairam Ramesh, Hon’ble Minister of State for Commerce,
inaugurating the Chilli processing unit at Byadgi, Karnataka along
with Sri K.C.Ponnana, MD, STCL Ltd., Dr.Arvind Pandalai,
Chairman STCL & CMD STC.

During 2008-09, STCL achieved a turnover of over Rs 2100 crore comprising exports of Rs 1652 crore, import sales of Rs 120 crore, domestic sales worth over Rs 360 crore and Profit before Tax of Rs 19 crore. Major export items handled include onion (Rs 203 crore), iron ore fines (Rs 62 crore), metal scrap (Rs 1342 crore) and blast furnance granulated slag (Rs 43 crore). Import turnover has been contributed mainly by sales of metal scrap (Rs 63 crore), pulses (Rs 12 crore) and RBD Palmolein (Rs 29 crore) etc.

 

Box 12.4

Major Activities of STCL During 2008-

  • STCL is setting up a Steam Sterilization unit at Chhindwara, which is likely to be commissioned shortly.

  • The pepper processing plant being established by STCL at Siddapur, Karnataka is progressing and work for designing, supply, installation, testing and commissioning of the plant has already been awarded.

  • STCL is also setting up a spice grinding and packing unit at Byadgi in Karnataka. The unit is likely to be commissioned after mid-April 2009.

STCL achieved a turnover of Rs 64 crore through procurement, supply and distribution of fertilizers to tobacco growers in Karnataka. It also achieved a turnover of Rs 65 crore through auction sale of cardamom.

III.  PEC Limited

PEC Ltd. was formed on 21st April, 1971 as a wholly owned subsidiary of STC. PEC Limited became an independent Company under the Department of Commerce from 27th March, 1991. As on 31st March, 2009, the total strength of the company was 196. The main activities of the company are:

  • Export of projects, engineering equipment and manufactured goods, defence equipment.

  • Import of industrial raw materials, bullion and agro commodities.

  • Consolidation of existing lines of business and simultaneously developing new products and new markets.

  • Diversification in export of non-engineering items e.g. coal & coke, iron ore, edible oils, steel scraps, etc.

  • Counter trade/special trading arrangements for further exports.

Performance

The overall performance of the Corporation since 2006-07 in terms of sales turnover, income, expenditure, profitability and net worth is given in Table 12.3.

Sales Turnover

During the year 2007-08, the Company’s sales turnover was Rs. 5672 crore as compared to Rs. 4518 crore during the year 2006-07. The turnover comprises of export sales worth Rs.904 crore, import worth Rs. 4347 crore and domestic sales worth Rs. 421 crore.

Table 12.3
Financial Performance of PEC Ltd

(Rs. Crore)

Items

2006-07

2007-08

2008-09
MOU
Targets

2008-09
Achievement (Provisional)

Sales Turnover

4517.91

5671.57

*3855.00

** 10100.00

Income

69.40

90.97

75.50

128.00

Expenditure

27.54

29.21

26.00

32.00

Profit before Tax

41.86

61.76

49.50

96.00

Profit after tax

27.55

41.38

32.28

63.00

Dividend & Corporate tax

6.98

10.53

7.00

# 13.00

Equity

2.00

2.00

2.00

## 20.00

Reserves

93.22

124.07

141.10

156.07

Net Worth

95.22

126.07

143.10

176.07

Source: PEC
* MOU Targets/Projections for Sales Turnover have been fixed for Non-Bullion trade only.
** Includes Bullion – Rs. 2391.00 crore. # Dividends & corporate dividend tax has been accounted for on estimate basis. ## Equity Capital increased by issue of bonus shares for Rs.18 crore to Govt. on 4.12.2008.

The year 2007-08 was significant in terms of sales and financial performance, surpassing MOU targets. While sales turnover at Rs.5672 crore was 26 per cent higher than previous year, exports at Rs.904 crore registered a growth of 153 per cent. Profit before tax soared to record Rs.61.76 crore from Rs.41.86 crore last year, reflecting a growth of 48 per cent. Earnings per share for the year 2007-08 rose to Rs.2069 from Rs.1378 last year.

During 2008-09, as against MOU target of Rs. 3855 crore (for non-bullion trade), the Company has registered a turnover (provisional) of Rs. 7709 crore (non-Bullion) upto March 2009. After including bullion turnover, total turnover (provisional) has reached Rs. 10,250 crore which will be the highest ever turnover.

Exports

The major item-wise composition of exports by the Company since 2006-07 is given in Table 12.4

During the year 2007-08, PEC executed contract for supply of communication equipment and vehicles worth Rs.75.30 crore to Nepal. Other major items exported during the year were cement plant machinery to Zambia, ferro chrome to China, Europe and USA, iron ore fines to China, conductors to Ethiopia, line hardware and transformers to Nigeria and hydraulic cranes to Nepal. Medical and healthcare products were exported to neighbouring and African countries.

The agro exports of PEC Ltd. have increased significantly. During 2007-08, the total value of exports of soya meal, rice, maize, sugar, was Rs.590.31crore. There is potential to further push up some of these agro exports and is committed to seek new opportunities in global trade.

At the end of the year 2008-09, PEC signed a contract of Rs. 20 crore for supply of electrical items like transformers and hardware to Kenya.

Imports

The major item-wise composition of imports by the Company since 2006-07 is given in Table 12.5.

PEC achieved import turnover of Rs.4347.08 crore during the year 2007-08. Bullion and diamond imports aggregated to Rs.1211.49 crore. To cater to industrial demand, PEC made bulk import of chemicals, coke, coal, zinc, maganese ore, steel, etc. Agricultural commodities like soyabean oil, pulses, wheat, etc., were also imported during the year.

PEC undertook import operations in edible oil and pulses on behalf of the Govt. to maintain consumer price stability and safeguard food security. During the year 2008-09, PEC supplied approximately 4.3 lakh tonnes of imported coal to Rajasthan Rajya Uttam Nigam Ltd. valued approx. Rs. 510 crore.

Domestic Trade

During the year 2007-08, domestic sales of the company aggregated to Rs. 421 crore. The company completed supply, erection and commissioning of one power substation and transmission line project for Karnataka Power Transmission Corporation Ltd. Major supplies of equipment for the other project have been completed and erection and commissioning shall be over soon.

Table 12.4
Composition of Export Performance of PEC Ltd

(Rs. Crore)

Item

2006-07

2007-08

2008-09*

Agro commodities

180.81

590.31

827.28

Projects & Engineering

14.11

89.98

18.08

Defence Stores

44.27

68.17

1.30

Minerals

91.72

153.13

351.39

Others

25.86

2.08

2.32

TOTAL

356.77

903.67

1200.37

*Provisional upto 31st March 2009 Source: PEC

Table 12.5
Composition of Imports of PEC Ltd

(Rs. Crore)

Item

2006-07

2007 -08

2008-09

Bullion

1303.14

1211.49

2391.43

Industrial Raw material

1850.28

1837.85

4299.10

Agro commodities

650.54

724.31

1146.27

Timber

9.70

8.05

0

Edible Oil

-

109.03

372.37

Others

16.89

456.35

184.91

TOTAL

3830.55

4347.08

8394.08

*Provisional upto 31st March 2009
Source: PEC

Engineering and manufactured goods like batteries, security equipment, vehicles, generating sets, etc. were also supplied. Other major items of domestic trade were coal, cotton, iron ore, steel, soya seeds and oil, etc.

Dividend

During the year 2007-08, PEC had paid 450 per cent dividend as against last year’s 300 per cent and 150 per cent prior year. The total payout on dividend and taxes during the year was Rs.10.53 crore.

During the year 2008-09, PEC has paid interim dividend 4.00 crore at the rate of 20% on the increased share capital of Rs. 20 crore. The total payout on dividend and taxes during the year 2007-08 was Rs.10.53 crore.

Sh. A.K.Mirchandani, CMD, PEC presenting final dividend cheque for the year 2007-08 to Sh. Kamal Nath, Hon’ble Minsiter of Commerce & Industry on 4.9.2008.

Credit Analysis

Fitch Rating India has assigned PEC rating ‘A’ for long-term issuer and fund-based long term bank lines and ‘F1’ for fund-based and non-fund based working capital banking lines. The ratings reflect national as well as international expertise that PEC has gained with focus on exports, imports and third-country trading over a diverse portfolio of products, sustained revenue growth with substantially improved margins and significant increases in financial leverage on a sustained basis.

Box 12.5

Key Initiatives of PEC

  • The business profile of PEC has changed with industrial raw materials, agro commodities and bullion constituting major part of its turnover and profit now.

  • PEC continues to strive to create a distinctive and sustainable competitive advantage, diversify into new markets and push more products, on-line trading through commodity exchanges, reach for higher volumes and continue cost control.

  • PEC has also built for itself a reputation for providing dedicated and efficient procurement services to the Government.

Memorandum of Understanding

PEC holds the unique record of being the only Public Sector Company in India to have received six MOU awards from Government of India for excellence in performance for 6 consecutive years ever since these were instituted in 1998-99. MOU for the year 2009-10 has also been signed with the Ministry of Commerce & Industry.

Export Award

In early March 2009, PEC has been awarded “Shield for Star Performer as Medium Enterprise in Product Group of Aluminium and Articles thereof’ by Engineering Export Promotion Council in recognition of its outstanding contribution to Engineering Exports for the year 2006-07.

IV.  India Trade Promotion Organization (ITPO)

The Trade Fair Authority of India (TFAI) and the Trade Development Authority (TDA) were merged together in 1992 and the new organization was renamed as India Trade Promotion Organization (ITPO) which plays a proactive role in catalyzing trade and investment. The ITPO is the premier trade promotion agency of India. It provides a broad spectrum of services to trade and industry so as to promote India’s exports. With its Headquarters at Pragati Maidan and regional offices at Bangalore, Chennai, Kolkata and Mumbai, ITPO ensures representative participation of trade and industry from different regions of the country in its events in India and abroad. It also operates a network of overseas offices at Frankfurt (Germany), New York (USA), Tokyo (Japan), Moscow (Russia) and Sao Paulo (Brazil) in furtherance of its trade promotion objectives as also for enlisting participation and visitor response for its events.

Financial Highlights

During 2008-09, the ITPO’s total income was Rs. 222.80 crore (provisional) as compared to Rs. 196.77 crore in the previous year while the total expenditure was Rs. 157.46 crore (provisional) as against Rs. 128.18 crore incurred during the previous year. The ITPO, thus, ended with a surplus of Rs. 65.34 crore (provisional) as compared to Rs. 68.59 crore in the previous years.

 

Fairs in India

Large and small industries, exporters and manufacturers covering various sectors of trade and industry displayed their exhibits/products at ITPO’s fairs in India. During 2008-09, 16 events were organized in India - 13 in Delhi and 3 at regional level. The events organized in Delhi included the mega event IITF at Pragati Maidan, New Delhi, Delhi International Leather Fair, Delhi Book Fair, Stationery Fair, International Arogya Fair, Sports Goods Fair, Energy Expo, Envirotech, Print Pack India, 12th International Exhibition of Security Fair, Nakshatra, Tex Styles India and Aahar International Food Fair. Three exhibitions at regional level, viz India International Leather Fair and Aahar Fair at Chennai and International Leather Goods Fair at Kolkata were also organized.

The 14th Delhi Book Fair was held from August 30 - September 7, 2008 with the support of Federation of Indian Publishers. The exhibition was inaugurated by Hon’ble Vice President of India. 291 participants including four overseas companies from Spain, Pakistan, UAE and USA participated in the Fair.

ITPO organized an exclusive B2B 3rd Sports Goods & Physical Fitness Equipment Exhibition (SGPFEE), 2008 at Pragati Maidan, New Delhi from October 3-6, 2008 in order to showcase the progress made by the Sports Goods & Physical Fitness Equipment Industry and its growth potential. 29 leading companies from sports goods and physical fitness equipment industry participated in this exhibition. The four day long exhibition was also visited by 10 overseas buyers from USA, Japan, UK, Brazil, Thailand, Taiwan, Romania and Chile.

16th Delhi International Leather Fair, October 16-18, 2008 was participated by 133 exhibitors including 20 overseas exhibitors from China, Germany, Italy, Taiwan and Thailand. The focus of the fair was finished goods. The fair provided an ideal forum especially for the industry in the Delhi and neighbouring states to promote their products.

International Arogya Fair was held from October 31 – November 3, 2008 at Pragati Maidan with the support of Department of AYUSH, Ministry of Health & Family Welfare. Special highlight of the fair was Indo-ASEAN Conclave on Cooperation in Traditional Medicines organised during the fair. The main products on display were Ayurveda, Yoga, Naturopathy, Homeopathy, Unani, Siddha, Herbal Medicines, Medicinal Plants, Health Tourism, Health Fitness Systems, Health and Medical Insurance etc. About 10,000 visitors visited the fair which included Medical practitioners, Marketing Chiefs, Professionals and Consultants, Policy Makers, Diplomats and Foreign Commercial Corps and Industry Association and Trade Delegations from India and abroad.

The 28th India International Trade Fair (IITF’2008) was held during November 14-27, 2008 at Pragati Maidan, New Delhi. The fair was inaugurated by the Hon’ble Vice President of India Shri M.Hamid Ansari with the theme “Women’s Empowerment & Infrastructure”. 25 States and 5 Union Territories along with 18 Ministries and Government Departments, 23 Public Sector Undertakings and 4 Commodity Boards, Banks and Insurance companies etc. participated in this event. 38 foreign countries with 350 companies were an attraction in the fair and the Partner Country was Pakistan and focus Region was ASEAN. During IITF’08, 7500 Indian and foreign companies participated and 1220 delegates visited the fair from 91 countries.

Keeping in view the scourge of global warming and its environmental impacts as well as energy requirements, ITPO organized twin events namely: Envirotech 2008 and Energytech 2008 during December 14-17, 2008. “Annual Eco Meet” by Govt. of NCT of Delhi was also organized as a concurrent event. In all, there were about 75 participants in these events – including TERI, Bureau of Energy Efficiency, SUZLON, NPCI, CPCB, CEL and NEDO, Japan.

The 9th edition of Print Pack India Fair 2009 was organized by ITPO in collaboration with IPAMA during January 18-23, 2009 at Pragati Maidan. This is most prestigious event for the Indian graphics art industry held after a gap of every four years. 390 leading manufacturers and suppliers of printing, packaging and converting machinery from India and overseas participated in this exhibition.

Hon’ble Vice-President of India, Sh Hamid Ansari, delivering the inaugural address at 28th India International Trade Fair 2008 on November 14, 2008

24th India International Leather Fair, January 31 – February 3, 2009 was organized in Chennai. All the products and services relating to leather industry were on display at the Fair. 392 companies including 121 overseas exhibitors from 24 countries participated in the fair. Overseas participation was quite significant with group participation from China, Germany, Italy, Spain and Thailand and company level participation from Australia, Bangladesh, Brazil, Egypt, Finland, France, Iran, Kenya, Mexico, Russian Federation, Turkey, Taiwan, the Netherlands, Sri Lanka, South Africa, Saudi Arabia, Ukraine, U.K. and U.S.A.

14th International Leather Goods Fair, February 20-22, 2009 was organised by ITPO in Kolkata to provide a platform for leather goods manufacturers located in West Bengal and neighbouring states. The product coverage was all kinds of leather goods, leather manufacturing machineries and processing chemicals. 56 overseas business visitors attended the fair.

The 15th Edition of Tex-Styles India Fair – a mega event focusing fully on Indian textile products was organised at Pragati Maidan, New Delhi from March 1-3, 2009. In all, 170 companies exhibited wide range of home furnishings and fabrics. Out of 1,355 business visitors, there were 545 overseas buyers and 247 buying agents of overseas companies based in India. Buyers from most of the developed countries like USA, Japan, UK, France, Germany, Italy and Australia and also from Africa, Middle East and other Asian countries and Latin American countries attended the show to source textile items from India.

Aahar International Food Fair, 2008, Chennai was organized in collaboration with Association of Resources Companies, the Hospitality Industry in India (ARCHII) and the Indian Federation of Culinary Association (IFCA) on Southern region during September 4-8, 2008 at Chennai Trade Centre, Chennai. 91 Indian and 5 foreign companies participated in the Fair. The fair was visited by 1500 business visitors. During the fair, various programmes such as Culinary Exhibition, Cookery demonstration by leading chefs, cooking contests and seminars on Global Culinary Trends & Food Safety & Hygiene were organized. The 24th edition of Aahar International Food Fair depicting two concurrent exhibitions ‘Food India’ and ‘Hospitality India’ was held in Pragati Madian, New Delhi from March 7-10, 2009. There were 449 participants including 28 overseas participants from 12 countries viz Banladesh, Canada, Chile, China, Germany, Italy, Japan,Malaysia, Singapore, Switzerland , Turkey and USA.

 

Tex-Styles India, 2009, Pragati Maidan, New Delhi

Box 12.5

Key Initiatives of PEC

  • Culinary Art India 2009 – Projecting live demonstration alongwith competition regarding cooking and tasting of various kinds of food items

  • Seminars on:

    ‘A Greener Foodservice Future’

    ‘Emerging Trends and Strategies in the Export of Horticulture based food products’

  • Theme on ‘Processed Food Setting Global Mark’ Projected by APEDA

  • As a promotion effort theme area for ‘Wine of India’ was projected by All India Wine Association

  • Touch Screen – facility of touch screen was provided at various points to facilitate visitors

Apart from organizing trade fairs, ITPO also leases its facilities in Pragati Maidan to organizers of trade events. During 2007-08, as many as 102 events were organized in Pragati Maidan by Export Promotion Bodies/Apex Industries Associations/Central Ministries as well as private fair organizers. During 2008-09, as many as 91 events were organized.

 

APEDA Stand at AAHAR-2009, Pragati Maidan, New Delhi

Fairs Abroad

During the year 2008-09, ITPO organized participation in 33 overseas trade fairs including two exclusive India Shows (Bangkok and Santiago), two Guest of Honour participation (Budapest & Ghent) and three mini-India Shows (two in Osaka and one in Peru). Out of these 33 events, 6 events were held in Europe, 6 in Africa & Middle East region, 5 in Latin America, 10 in South East Asia including Far-East, 4 in USA, 1 in SAARC and 1 in CIS region. Out of 33 events, 6 were general fairs, 20 were specialised fairs and 7 were exclusive India Shows/Guest of Honour participations/Mini India Shows.

During the year 2009-10, ITPO’s programme of participation includes 30 events including 2 exclusive India Shows (Almaty & St. Petersburg), one Guest of Honour in Thessaloniki, and 2 mini India shows in Osaka. Out of these, 9 events will be in Europe, 5 in Africa and Middle East region, 7 in South East Asia including Far East, 3 in USA, 3 in Latin America, 2 in CIS and one in SAARC region.

Trade Development Activities

During the year, two Exclusive Indian Commodity shows were organized in Japan – the “19th India Home Furnishing Fair” and the “29th India Garment Fair”. These two events together generated business worth US$ 18.75 million and were attended by 1673 buyers from leading department stores, wholesalers, importers, trading houses, etc. Keeping in view the economic importance of ASEAN region, ITPO has started organizing exclusive India Show in one of the ASEAN country by rotation each year. This year, it was organized in Bangkok (Thailand). About 80 leading companies from India including TATA, Birla, Indo-Rama group etc. participated in the Show. An export potential seminar was also organized during India Fair, Bangkok jointly with Embassy of India, Bangkok, and CII. The event generated business worth Rs. 5.27 crores and was attended by 11,932 visitors including 2066 Business visitors from 18 countries.

During the year, ITPO hosted visits of 25 delegations from Brazil, Japan, USA for trade promotion and arranged business meetings for them with the potential Indian companies pertaining to wide range of products and services i.e. textiles, steel, auto parts, excavators, investment opportunities, etc. during their visits.

ITPO provided a package of services to export worthy units which are enrolled as Regular Members. These services includes live trade enquiries received from foreign offices, market intelligence, product development, details of importers, arranging meetings with visiting Delegations, participation in developmental programmes, etc. During the year, 212 trade enquiries received from ITPO foreign offices/Indian Missions abroad were disseminated among the members enabling them to explore business opportunities with their overseas counterparts.

ITPO is networking with International organizations in the field of trade and commerce through Membership or collaborative arrangements such as Memorandum of Understanding (MOU). ITPO is a member of “Asia Trade Promotion Forum” and participates in its Annual meet regularly. The ATPF Annual Meet held in Hanoi (Vietnam) during April, 2008 was attended by CMD, ITPO.

In an effort to promote Indian Industrial design globally, an MOU was signed between ITPO and National Institute of Design (NID). A Show Case Design Centre has been set up in Pragati Maidan under this MOU. Presently, some of the India’s best design innovations are on display, which could be constantly updated. There is also an interactive space, where the importance of design applications in various industries has been highlighted.

Computerisation

At present, the day-to-day activities of ITPO are partially computerized with departmental software modules running in the networking environment in addition to the internet and e-mail facilities to the user departments. The present IT infrastructure in ITPO, inter-alia, comprises of 10 servers, 6 workstations, about 400 computers with peripherals and networking equipments.

In order to achieve comprehensive computerization of its activities, ITPO is embarking on a prestigious comprehensive e-governance programme for which a consultant has since been appointed. The preliminary activities to achieve comprehensive computerization of ITPO have already been initiated by the consultant appointed by ITPO.

Trade Information

During 2007-08, 545 periodicals, 47 publications including trade directories were added in the Business Information Centre (BIC) Library. During 2008-09, as many as 2289 periodicals, 147 publications including trade directories and 37 CD Roms were received in the Centre. Besides these, 52 issues of Indian Export Bulletin were brought out and put on website during this period. ITPO has nearly 1500 trade portal members as on March 31, 2009.

Business Information Centre (BIC)

With a view to provide reliable trade information to Indian exporters and overseas buyers, the ITPO has set up the Business Information Centre and Trade Portal www.tradeportalofindia.com at Pragati Maidan. The tade Portal has at present 12 GB of information covering 54 countries and 28 products which accounts for more than 85% of India’s trade. The Portal covers amongst others a data base of 52,000 overseas importers, more than 15000 Indian exporters and 1500 ITPO members, Product and Country Profiles. Fairs and Exhibitions, India’s Trade Statistics, Global Trade Statistics, EXIM Policy, notifications and circulars of Central Excise, Customs and RBI, market surveys, product catalogues of ITPO members and tariffs and taxes. It has links to various trade related organizations as well. Nearly 200 visitors access the trade portal daily. The ITPO has a Physical and Electronic Library located at Hall No.19 at Pragati Maidan which is visited by more than 2000 visitors. The Centre provides online access to KOMPASS – (database of 1.8 million companies for 82 countries, searchable by country and product, classified by manufacturer/importer/distributor/agent).

Besides, www.tradeportalofindia.com, ITPO is also maintaining another portal www.tradeportalofindia.org which was developed with the assistance of India and EU – TIDP with a view to promoting trade between India and EU. The Portal contains vast information on various aspects of trade and economy with special reference to EU region. Now the Portal is having information with regard to more than 100 countries including 27 countries falling under EU.

Signing of MOU between ITPO and Karnataka Government

Setting up of Regional Trade Centres

ITPO is providing assistance to State Governments in setting up Regional Trade Promotion Centres (RTPCs) for creating Export Infrastructure in State Capital/major cities.

  • A Joint Venture Company namely, Tamilnadu Trade Promotion Organisation (TNTPO) was set up during the year 2001. This project is a joint initiative of ITPO & TIDCO, Chennai. TNTPO has three AC Halls having area of 4400 sq.mtrs., 1760 sq.mtrs. and 4400 sq.mtrs. respectively. A modern Convention Centre having built up area of 6672 sq.mtrs. on Ground Floor and 1817 sq.mtrs. on First Floor with seating capacity of 2000 is also operational since December 2004 in the Chennai Trade Centre (CTC). CTC is also having 4000 sq.mtrs open area for display. During 2008-09, 68 events were organized in the CTC.

  • The Trade Centre at Bangalore was set up in 2004 and is managed by a Joint Venture Company called Karnataka Trade Promotion Organisation (KTPO). KTPO is a joint venture of ITPO and Karnataka Industrial Area Development Board (KIADB). KTPO is having one Exhibition Hall measuring 5371 sq.mtrs. and one Conference Hall measuring 1500 sq.mtrs. The commissioning of this centre has provided added impetus to trade promotion activities in the Southern Region. During 2008-09 KTPO hosted 21 trade related events.

  • A project of Trade Centre at Guwahati for developing trade from North Eastern Region was completed in December 2006 and has been taken over by Assam Industrial Development Corporation (AIDC) – a Govt. of Assam Undertaking on 5th April, 2007. A new Company “Assam Trade Promotion Organisation” has been formed to run the ‘Maniram Dewan Trade Centre’. The Centre was inaugurated on 19th February, 2009 by Shri Kamal Nath, Hon’ble Union Minister for Commerce & Industry. The first Trade & Industry Expo was held during Feb. 19-21, 2009. The Centre is equipped with 3 exhibition halls of 10,000 sq.ft. each, two conference rooms with a capacity of 50 and 100, another conference area for almost 400 people, food kiosks, parking area, provision for amphitheater etc. besides VIP entrance and lounge.

  • A project of establishment of an International Trade and Convention Centre at Pampore, J&K, Srinagar is under construction with a total funding support of Rs.30.00 crores only from Govt. of India under ASIDE Scheme. The State Government has identified 50 acre land at Pampore which is 12 kms away from Srinagar. A consultant has been enagaged for preparation of Inception Project Report for this project. The DPR of the Trade Centre has been finalized. The State Govt. has been advised to consider constituting a “Special Purpose Vehicle” (SPV) on the lines of SPV formed for Guwahati Trade Centre.

Commercial Publicity & Public Relations

During the year, ITPO made optimum publicity arrangements through print, electronic and internet media to mobilize participation as well as promote its various events in India and abroad and other activities. This publicity campaign was supplemented with brochures, invitation mailers, posters, fair catalogues and outdoor media efforts. ITPO also effectively liaised with the Press and Media to ensure maximum coverage in the print media and appropriate footage in the electronic media for ITPO’s events and activities.

The various facets of ITPO’s activities and its exhibition infrastructure were highlighted in the Calendar of Events which also listed ITPO’s programme of events in India and abroad over a period of 3 and 2 years respectively. The Calendar was mailed to its target audience comprising trade and industry associations in India and abroad, overseas missions in India and Indian Missions abroad, nodal industry organizations in different States.

ITPO also brought out a quarterly newsletter ‘Log On’ for disseminating information on ITPO’s activities to trade and industry in India and overseas, Central Ministries and Departments, State Governments, PSUs, EPCs etc. As part of corporate publicity efforts, advertorials were brought out in publications highlighting ITPO’s promotional role in appropriate perspective. Corporate publicity booklet “ITPO - Leveraging Indian Business Globally” was also brought out during the period highlighting ITPO’s role and activities in pursuance of its mandate.

Infrastructure

During the year 2008-09, ITPO has undertaken works of modernization/upgradation of facilities in Pragati Maidan as follows:

  • Improvement of Shakuntalam Theatre and renovation of Pragati Bhawan Annexe.

  • Weather resistance painting on various halls.

  • Improved construction and decoration works for exhibitions

  • Improved house-keeping and cleaning of air-conditioned halls.

  • Improvement of horticulture/land scape from Gate No.7 to Hall No.7 and Gate No. 5 to Hall No.1.

  • Construction of boundary wall and concertina coil over boundary wall due to security requirements.

  • Augmentation of Electrical Sub-Station No.5.

  • Detailed Project Report of International Trade Centre, Pampore, J&K finalized.

Security Measures

To beef up the security, following steps have been taken in the wake of recent police advisories and threat perception in the country:

  • Strict checking has been enforced at all entrance points.

  • Cars and passengers are being scanned and checked.

  • All vehicles of ITPO officers have been issued parking labels.

  • Parking has been enforced at designated parking only for officials, visitors to cinema, office and all clients and visitors to various F&B units.

  • Delhi Police has been apprised of the steps taken and also requested to post an armed picket permanently inside ITPO.

  • Meetings have been held with exhibitors, organizers, vendors and CHA to ensure proper uniforms and I/Cards for their permanent employees as well as contractual labours.

  • CPWD contractors have also been directed to follow the system of I/Cards for their permanent and casual labour.

  • Various duty shifts have been recycled to bring about rotation in the nature of duty to break monotony and familiarization.

  • Token system for entry and exit of cars is being introduced shortly.

  • Regular checking has been introduced at levels of Supervisors, DSOs, Managers and Senior Officers.

Global Meltdown and the PSUs

The three PSUs, MMTC, STC, and PEC trade in commodities including agro products, metals, minerals and bullion. These PSUs have two distinct type of business - on government account and on their own account. The business model adopted by all the three PSUs for business on their own account is to fund an associate after taking a margin. The inventory of goods/materials is taken over by the PSUs as security and these are released to the associate or his buyer on receipt of the cost of the materials/goods. The PSUs charge, apart from interests, a trade margin on such transactions. This model is adopted in respect of domestic transactions as also international transactions including third country transactions.

With the global meltdown in 2008, some of the associates could not sell the materials/goods on account of steep fall in global commodity prices. This resulted in the accumulation of high cost inventory. Therefore, the PSUs are not only facing slow liquidation of the inventory, but also facing liquidity crunch on account of bank limits. The Boards of the three PSUs are closely monitoring the situation and are assisting the associates by way of extending additional credit so that they continue to be in the business and also average out the impact of high cost inventory.

Under certain other models of trading, material is supplied to certain entities overseas by an associate for which trade finance is provided by the PSUs. Some transactions in this category are also facing problems on account of the sharp drop in the prices of the commodities. These cases are being monitored to safeguard the interest of PSUs and minimize losses.

 

 

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