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Annual Report 2009-2010
Summary of the Audit Observations in the Various Reports of 2010


S. No.
Para / Report No.
Audit observations
Action Taken
1. 4.1.1 (CA 9 of 2009-10)
Export Credit Guarnatee Corporation of India Ltd. – Madurai branch of ECGC settled an inadmissible claim for Rs.2.20 crores, ignoring the lapses committed by the bank of officials.
Final ATN sent to Monitoring Cell on 17.11.09
2. 4.2.1 (CA 9 of 2009-10)
Inordinate delay in disposal of Zinc not lifted by the buyer resulted in an avoidable cash loss of Rs.2.14 crores
ATN is under process.
1. 4.3.1 (9 of 2009-10)

STCL Ltd., a company dealing in spices, entered a new business of trading in iron ore and metal scrap in 2004-05. The company undertook third country export of metal scrap with the help of Business Associates(Future Metal Pvt. Ltd. And Future Exim (India) Pvt. Ltd.). in this export, both the buyers and sellers were located overseas. Under the arrangement, the company was to issue Letter of Credit(LCs) in favour of overseas sellers and release shipping documents to buyers on receiving remittance from them

The company failed to safeguard its financial interests as it did not insist on back-to-back LC from buyers. The company did not appoint its own agency for pre-shipment inspection. The sellers exploited these weak linkages and dispatched inferior material (including sand and tyres) instead of proper metal scrap. The sellers received their payments as the company had issued LCs in their favour. As the buyers did not pay in full, the company ultimately suffered a loss of Rs.1167.48 crores, mainly during 2008-09.

ATN is under process.
2. 4.1 (9 of 2010-11)
Short levy of departmental charges by DGS&D
The Directorate General of Supplies & Disposals (DGS&D) is a central purchase organization of the GOI, which includes rate contracts for common user items required by the Central Government Departments, Governments, Union Territories and quasi-public bodies like municipalities, statutory corporations and government undertakings. It levies departmental charges for the services rendered for purchase and inspection of stores at rates prescribed by the Government from time to time.
ATN is under process.

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