KYC #05
Salt Trading Corporation: Salt earns the money. Interest takes most of it.
STC sold Rs 938.18 crore of goods in the audited year to mid-July 2025 and kept Rs 6.32 crore. Salt, 41% of sales, produced 98% of gross profit; interest took 81.5% of the operating profit before it. We followed the money, the group balances behind it, the auditor’s qualification and every legal matter we could find.
The short version
- A salt business inside a trading house. Salt is 41.2% of sales and 98.3% of gross profit. Fertiliser, gas and everything else sold Rs 552.04 crore and earned Rs 1.77 crore. The salt monopoly ended by budget in June 2021.
- Interest takes the rest. Finance cost of Rs 41.45 crore took 81.5% of operating profit in the audited year to mid-July 2025. Profit has been Rs 4.19 to Rs 6.33 crore for six years on revenue of Rs 717 to Rs 1,335 crore.
- Cash flow is not earnings. Operating cash flow was Rs 528.88 crore on a profit of Rs 6.32 crore because trade payables rose Rs 570 crore and a combined payables line added Rs 575.93 crore; a year earlier it was minus Rs 162.03 crore.
- The provisional doubling is other income. Profit rose 117% to Rs 13.70 crore while gross profit fell Rs 16.91 crore; Rs 24.56 crore of other income, not itemised, exceeded profit before tax.
- Governance and the record. The audit opinion is qualified for a second year; STC reports Rs 165.34 crore advanced to subsidiaries and associates whose own accounts are not consolidated into its statements; two Government-linked seats are empty. Fifteen legal matters are registered: no court finding against STC was identified, and one administrative fine (Rs 3 lakh, October 2026) was imposed for not producing sugar-stock records, which does not establish concealment.
The question: STC earned Rs 6.32 crore on Rs 938.18 crore of sales and a provisional Rs 13.70 crore the next year. Which part of the company makes that money, who pays for the capital behind it, and what could break either?
The numbers
- Profit after tax, year to mid-July 2025: Rs 6.32 crore. Audited, with a qualified opinion, on revenue of Rs 938.18 crore: a net margin of 0.67%. Six years of profit run from Rs 4.19 to Rs 6.33 crore on revenue between Rs 717 crore and Rs 1,335 crore.
- Salt, share of gross profit: 98.3%. Rs 103.78 crore of Rs 105.55 crore, from 41.2% of sales. Fertiliser, gas and everything else together earned Rs 1.77 crore of gross profit on Rs 552.04 crore of sales. Segment gross profit is before staff, administration and interest, which are not allocated to segments.
- Interest, share of operating profit: 81.5%. Finance cost Rs 41.45 crore against Rs 50.84 crore of operating profit before interest; interest cover 1.23 times. Operating profit before interest is profit before tax plus finance cost, our calculation.
- Operating cash flow, on Rs 6.32 crore of profit: Rs 528.88 crore. The cash-flow statement credits Rs 575.93 crore to the change in trade payables, other liabilities and provisions, 108.9% of the total (trade payables alone rose Rs 570.37 crore on the balance sheet); the year before, operating cash flow was minus Rs 162.03 crore. Timing of payments, not earning power.
- Owed to subsidiaries and associates: Rs 165.34 crore. Gross balances at July 2025, 101.5% of equity (Rs 162.97 crore), carried at Rs 156.84 crore after an allowance of Rs 8.5 crore. STC does not consolidate these companies, and the auditor qualifies the accounts for that.
- Other income, as % of profit before tax, year to mid-July 2026: 110.3%. Provisional: Rs 24.56 crore of other income against Rs 22.26 crore of profit before tax, while gross profit fell Rs 16.91 crore. Rs 22.25 crore of the other income had been booked by the half-year; it is not itemised.
01. Salt earns the money. Interest takes most of it.
Salt Trading Corporation Limited was set up in 1963 to bring iodised salt to every Nepali. In the audited year to mid-July 2025 it sold Rs 938.18 crore of goods and kept Rs 6.32 crore: Rs 0.67 of every Rs 100.1
Two lines explain the gap. Salt earned Rs 103.78 crore of the company’s Rs 105.55 crore of gross profit (98.3%); fertiliser, gas, sugar, rice and everything else together sold Rs 552.04 crore and earned Rs 1.77 crore. Then interest, Rs 41.45 crore, took 81.5% of the Rs 50.84 crore of operating profit that was left before it.1
Six audited years of profit sit between Rs 4.19 crore and Rs 6.33 crore on revenue that ranged from Rs 717 crore to Rs 1,335 crore.1,2 Revenue moved by Rs 618 crore and profit by Rs 2.14 crore. That is what a company looks like when one product earns a steady amount, everything else is traded close to cost, and lenders take most of the difference. The 98.3% is a share of segment gross profit, which is before staff, administration and interest: it shows where gross profit comes from, not that the other lines are worthless to the business.
The provisional year to mid-July 2026 looks different: profit up 117% to Rs 13.70 crore. But gross profit fell Rs 16.91 crore, to Rs 88.64 crore. The whole improvement came from other income of Rs 24.56 crore, which the statements do not itemise, and from Rs 11.05 crore less interest.4 At Rs 5,591 a share the market values STC at about Rs 1,963.5 crore, 143 times that provisional profit.14
This is a Know Your Company file, not a valuation. It says what STC is, who controls it, where its money goes and what the legal record shows, and it gives no target and no view on the price. Our valuation of 14 October 2026 asks what the price assumes; this file is the foundation for that question.42
STC earned Rs 6.32 crore on Rs 938.18 crore of sales and a provisional Rs 13.70 crore the next year. Which part of the company makes that money, who pays for the capital behind it, and what could break either?
02. STC on one page
The facts a shareholder should be able to repeat from memory. The last column says whether each is established by a filing, the company’s own account, or our arithmetic.
| Item | What the sources show | Label |
|---|
| Company | Salt Trading Corporation Limited (STC), NEPSE: STC. Registered office at Kalimati, Kathmandu. | Established |
| Registered | 12 September 1963 (27 Bhadra 2020 BS) in the directors’ report; the 2026 meeting minute gives “2020/07”. | Sources differ |
| What it sells | Salt; subsidised and non-subsidised fertiliser; LP gas; sugar, rice, flour, ghee and oil, cement, paper and other staples. | Established |
| Latest audited year | Year to 16 July 2025: revenue Rs 938.18 crore, profit after tax Rs 6.32 crore. Accounts approved 11 February 2026; opinion qualified. | Established |
| Latest provisional year | Year to mid-July 2026: revenue Rs 1,222.57 crore, profit Rs 13.70 crore. Posted 14 to 15 August 2026; unaudited. | Reported |
| Statements | Separate only: subsidiaries and associates are carried at cost, not consolidated. | Established |
| Shares and price | 3,207,168 shares of Rs 100 at July 2025, about 35.1 lakh after the 9.5% bonus listed on 19 August 2026. Rs 5,591 on the page we read on 17 October 2026; market value about Rs 1,963.5 crore; 52-week range Rs 4,997 to Rs 6,336. | Reported (portal); our calculation |
| Owners | Government of Nepal 11.59% and Food Management and Trading Company 9.66% (21.25% together). Largest private holder 5.98%. Eleven holders above 1% hold 49.23%. | Established |
| Auditor | Kuber N. Bhattarai & Co., Chartered Accountants. Fee Rs 10 lakh a year. | Established |
| People | Chairman Pradip Lal Shrestha; Chief Executive Officer Urmila Shrestha. The company says it has about 500 staff and 93 offices. | Established; company says |
| Legal record | 15 matters registered: one fine, six pending, six unresolved, two concluded. No court finding against STC was identified; the one fine is administrative (Rs 3 lakh, October 2026, for not producing sugar-stock records) and does not establish concealment. | Our register (section 9) |
| Research cut-off | 17 October 2026. | |
Sources: 1,3,4,8,14. Market value is price times the 3,511,850.7 shares after the 2026 bonus, our calculation on one portal page.
A company registered in 1963 to import salt, still 98% dependent on salt. How did it start?
03. Nepal makes no salt
Nepal produces no salt. Until 1959, Tibetan rock salt moved south by barter for grain; the customs post at Sankhu traded it until 1967; Indian sea salt gradually replaced it.43 STC says it was set up in 1963 to make iodised salt available to every citizen. A Hindi-language feature adds that the Government, a Government-owned body and the main salt traders of the time formed it, nine of the traders being made compulsory shareholders. We found no source for that anecdote and treat it as reported, not established.8,34
The legal footing is thinner than the company’s story. The Kathmandu Post reports that STC was the sole importer of iodised salt from 1963 under the Export and Import (Control) Act 1957: an administrative designation, not a company right.35 STC’s site calls it “Nepal’s first public–private partnership”, formed “under PPP act of Government of Nepal”. We could not identify a statute of that name in 1963 and treat the wording as a description, not as legal history.8
The registration date is disputed. The directors’ report prints 27 Bhadra 2020 BS, which converts to 12 September 1963, and a news report gives the same day.1,29 The minute of the 2026 annual meeting gives the seventh month, Kartik (October to November 1963).3 We use the first. The Company Registrar’s record would settle it and we have not seen it.
The mission widened in 1973. A joint programme of the Health Ministry, STC, India and UNICEF to raise the supply of iodised salt began in 1973 and ran to 1998.38 Grants from UNICEF and the Governments of Japan, India and Nepal for property still sit in STC’s equity as a Rs 44.29 crore capital donation fund, and the 2025 directors’ report cites a 2016 national survey in which 94.5% of children under five used adequately iodised salt.1
Sixty-three years, one company, several regimes. What happened in between?
04. From a franchise to a trading house
The record below is dated and sourced. Where a date is disputed the card says so, and where we found only one report the card says that too.
- 1957: The legal footing: an import-control Act. The Export and Import (Control) Act 1957 is the law under which, the Kathmandu Post reports, STC became the sole importer of iodised salt from 1963. It made the salt trade an administrative designation rather than a company right: what an Act and a ministry designate, a budget can undo. The 2021 budget removed the designation without any change to STC’s company status.
- 12 Sep 1963: Registered as a company (27 Bhadra 2020 BS). STC is registered and established under the company law then in force. The annual report’s directors’ report gives 2020/05/27 BS, which converts to Thursday 12 September 1963; the AGM minute of 2026 gives “2020/07” (Kartik, October to November 1963). A feature in a Hindi magazine says the company was set up from the Government, a Government-owned body and the main salt traders, nine of whom were made compulsory shareholders. Nepal produces no salt and imports it from India. The Hindi feature adds that before the company the Government had fixed regional import quotas for individual traders. A company that is part state and part private today, with the Government-linked holders at 21.25%; whether it was so at birth rests on that one feature.
- 1970 to 1982: First factories: flour and vegetable ghee. Khadya Udhyog (flour) is established in Jestha 2027 BS (May to June 1970), with first production in Shrawan 2029 (July 1972). Nepal Vanaspati Ghee is established on 28 Bhadra 2033 (September 1976), with first production in Shrawan 2039 (July 1982). Both were meant to replace imports from India. The first move from distribution into manufacturing; these are the group companies that still sit on STC’s balance sheet. At July 2025 group companies owed STC Rs 165 crore in all, including Rs 11.2 crore from Khadya Udhyog and Rs 22.6 crore from Nepal Vanaspati Ghee; in the year to mid-July 2025 STC bought Rs 27.3 crore of goods from Khadya Udhyog.
- 1973: The iodisation programme begins. A joint programme of the Health Ministry, STC, India and UNICEF to raise the supply of iodised salt starts in 1973 and runs to 1998. A 2001 feature calls the iodisation effort among the most successful in Asia. It turned STC from a distributor into the delivery channel of a public-health policy; grants from UNICEF, Japan, India and Nepal still sit in its equity as a Rs 44.3 crore capital donation fund. The 2025 directors’ report cites the 2016 national health survey: 94.5% of children under five were using adequately iodised salt, which it says met the national target.
- 1990s: A private attempt fails, then a moratorium. A private group is allowed to trade iodised salt, fails to supply the promised amount on time, and NGO tests find as little as 7 ppm of iodine in its brand. After the iodisation project ends in 1998, a four-year moratorium on private salt trading follows. The episode that the monopoly’s defenders cited for two decades: monitoring one dealer is easier than monitoring many. A drafted Iodised Salt Distribution Act in 2001 did not open the market; the 2005 court ruling and the 2021 budget did the work later.
- 1993: A sugar mill and a tyre plant. STC management expands the 1947 Morang Sugar Mills to 450 tonnes of cane a day in 1993, and Gorakhkali Rubber Udhyog (tyres, 120,000 a year) is established in 1992/93. Sagarmatha Insurance follows in 1996. Diversification into industries with a Government-policy rationale, financed from a trading company’s balance sheet. The directors’ report says the sugar mill could not be restructured; STC carries Rs 27.95 crore of preference shares in it plus Rs 12.9 crore of advances; tyres and insurance remain as holdings.
- 5 Apr 2005: The Supreme Court upholds the monopoly. A division bench quashes the writs of eight private firms: the others, it says, have not built the infrastructure to supply remote areas. The court rested on remote-area delivery, not on price. The franchise survives for 16 more years.
- 2009 to 2026: One executive, three titles. The current chief executive appears as general manager in 2009, 2011 and 2012, as chief executive in 2016, and as chief executive signing the 2025 and 2026 accounts. A long tenure of the executive who answers to a board with two Government-linked seats. Continuity of management through the 2012 sugar complaint, the 2021 end of the monopoly and the 2026 board vacancies.
- Jan 2011: Parliament asks for the paperwork on exclusivity. The Public Accounts Committee tells STC to produce the documents giving it exclusive authority, its audited accounts and a cost breakdown for salt sold at Rs 15 a kg. STC says it trades under a tripartite agreement among STC, the Government of Nepal and the Government of Japan. The basis of the monopoly was still being asked about in 2011. No later finding was found; the agreement’s text is not public.
- Oct 2012: A consumer forum’s sugar complaint. The Forum for Protection of Consumer Rights-Nepal files complaints with the CIAA, the police and the Department of Commerce, alleging STC bought 50,000 tonnes of sugar at Rs 52-55 and sold at Rs 76. STC calls it baseless. STC is both a market-stabiliser and a trader; the two roles meet every festival season. No outcome found.
- 20 Nov 2019: CIAA charges the Biratnagar zonal office. The CIAA files a charge sheet at the Special Court against the head of the Biratnagar zonal office, its store chief and a junior assistant for irregular sale of chemical fertiliser worth Rs 19.07 lakh. A stock-control failure at one office, followed by dismissals and a prosecution. Still before the Supreme Court in February 2026 (case 079-CR-1067).
- 9 Jun 2021: The budget ends the monopoly. Point 221 of the 2021/22 budget says salt production and distribution will be made competitive with private-sector participation. The Kathmandu Post reports that the six-decade monopoly has ended. The designation that gave STC its franchise was withdrawn by a budget line. STC’s salt sales rose from Rs 329 crore in the year to mid-July 2024 to Rs 386 crore in the year to mid-July 2025; no private-importer volumes were found.
- Mar to Apr 2023: Fast-track fertiliser tenders (alleged irregularities). After a ministry committee reverses its earlier split (70% to Krishi Samagri Company, 30% to STC) and authorises STC to make all of about Rs 1,500 crore of fertiliser purchases, STC runs five tenders with ten days to bid; three packages go to Indian Potash Limited and two to Swiss Singapore Overseas Enterprises. A news outlet, citing a competing state company, alleges overpricing of Rs 246 crore. The outlet puts the five tenders at about Rs 833 crore in all, against total assets of Rs 887 to Rs 1,346 crore in STC’s last three audited years. No proceeding or finding was found; the allegation is untested.
- Year to Jul 2024: Revenue peaks and profit does not. Revenue reaches Rs 1,335 crore, the highest in the six years on record; net profit is Rs 4.19 crore; interest is Rs 57.7 crore; operating cash flow is minus Rs 162 crore. The year that shows the shape of the business: volume swings, a thin and steady gross profit, and interest that takes almost all of it. Borrowings of Rs 435 crore financed the year.
- 16 Jul 2025: Year-end: the balance sheet turns inside out. Trade payables rise by Rs 570 crore to Rs 835 crore, bank borrowings fall by Rs 188 crore, and cash rises to Rs 327 crore. Half of inventories (Rs 214 crore of Rs 428 crore) is stock in transit. Operating cash flow of Rs 529 crore on a profit of Rs 6.3 crore: timing of payments, not earning power. Net cash of Rs 81 crore at one date; Rs 401 crore of net debt a year earlier.
- 11 Feb 2026: Accounts signed: a qualified opinion for the second year. The board approves the statements for the year to mid-July 2025 almost seven months after year-end. The auditor’s opinion is qualified on four grounds (loss allowances, non-consolidation of subsidiaries and associates, unactuarial retirement liabilities, investments at cost). It adds two emphasis paragraphs: three approved cash dividends unpaid, and stock in transit. The statements show a separate-entity view of a group of 13 companies. The opinion for the year to mid-July 2024 was qualified on the same grounds.
- 20-24 Mar 2026: Calcutta High Court: a DAP short-landing claim, settled in four days. STC arrests the MV Magma Tenacity over a claimed 126-tonne shortfall in a 25,500-tonne DAP cargo; on 24 March the court records an out-of-court settlement and vacates the arrest. Small money, but a clean view of how STC buys: letter of credit, Indian state supplier, quick action on quantity. Concluded; terms undisclosed.
- 12 Jun 2026: The 59th AGM: a bonus, a new constitution and two empty seats. Shareholders approve 9.5% bonus shares and a 0.5% cash dividend (for tax), new Articles to conform to the Companies Act 2063, and borrowing above paid-up capital plus reserves. Management says the Government’s seats are vacant: the joint secretary retired and Food Management and Trading Company’s chief executive resigned. It shows the board without its Government nominees and the Articles being replaced. Bonus shares listed on 19 Aug 2026; Government approval for older cash dividends still awaited.
- 2 Jul 2026: CIAA case against an assistant manager. The CIAA files at the Special Court against an assistant manager alleging fake academic certificates used for appointment and promotion. A case about an individual; no corporate allegation. No hearing reported.
- 15 Aug 2026: Provisional the year to mid-July 2026: profit up 117%. Revenue Rs 1,222.6 crore (+30.3%), gross profit down to Rs 88.6 crore, other income Rs 24.6 crore, profit Rs 13.70 crore against Rs 6.32 crore. Profit doubled while gross profit fell: the difference is other income. Unaudited; the audited report for the year to mid-July 2025 was signed in February after similar provisional figures.
- 8 Sep 2026: Sugar at Rs 105 a kg. The cabinet allows STC to import 25,000 tonnes of sugar at 1% duty; STC sells at Rs 105 a kg against Rs 140 in the market. The public-service role in action: STC takes the inventory and price risk. The fine over the sugar stock ledger was reported on 1 October; the inspection date is not stated.
- 1 Oct 2026: Rs 3 lakh fine over sugar stock records. The Department of Commerce, Supplies and Consumer Protection fines STC Rs 3 lakh under the Consumer Protection Act after STC could not produce a stock ledger to verify sugar stock. Small money; a question about the records of an inventory-heavy business. Outcome of any review not reported.
Five turning points, with the evidence
- 1963: A franchise, not only a company. What happened: STC is registered in 1963. The Kathmandu Post reports it has been Nepal’s sole importer of iodised salt since then, under the Export and Import (Control) Act 1957. Why it mattered: Nepal makes no salt. One importer let the state control quality and delivery to remote districts, and gave the company a protected market. What changed: The designation, not the company, was the asset: it survived a Supreme Court challenge in 2005, and a budget line ended it in 2021. The long-term consequence: Sixty-three years on, salt still earns 98.3% of gross profit.
- 1970 to 1996: From importer to industrial group. What happened: Flour (1970), vegetable ghee (1976), an expanded sugar mill (1993), a tyre plant (1992/93) and an insurer (1996) are added, each with a Government-policy rationale. Why it mattered: A trading company financed factories from its own balance sheet, replacing imports that came from India. What changed: STC became a holding company in practice: 13 companies it controls or influences, none consolidated in its accounts. The long-term consequence: At July 2025 those companies owed STC Rs 165.34 crore, and the sugar mill had not been restructured.
- 2005 to 2011: The court upholds the franchise; Parliament asks for the paperwork. What happened: On 5 April 2005 the Supreme Court quashes the writs of eight private firms. In January 2011 the Public Accounts Committee tells STC to produce the documents that give it exclusive authority and a cost breakdown for salt sold at Rs 15 a kg. Why it mattered: The court rested on delivery to remote areas, not on price. The committee’s request shows the legal basis was still a question six years later. What changed: STC kept the franchise for 16 more years. The long-term consequence: No finding of the committee was found, and the tripartite agreement STC cited (with the Government of Nepal and the Government of Japan) is not public.
- June 2021: The budget ends the monopoly. What happened: Point 221 of the 2021/22 budget says salt production and distribution will be made competitive with private-sector participation. The Kathmandu Post reports that the six-decade monopoly has ended. Why it mattered: The designation was withdrawn by a budget line; officials of the ministry and of STC told Onlinekhabar they had not been consulted. What changed: Salt sales rose 17.3% from Rs 329.18 crore to Rs 386.14 crore between the years to mid-July 2024 and 2025, while salt gross profit fell 4.4% and its margin from 33.0% to 26.9% (our calculation, two years only). The long-term consequence: We found no private importer’s volumes, and STC’s audited notes still say it “is the sole supplier of salt within Nepal”. Whether competition has arrived is not established.
- 2023 to 2026: The fertiliser years and a balance sheet that swung. What happened: Fertiliser bought from India government to government and sold under subsidy was 46.7% of sales (Rs 622.90 crore) in the year to mid-July 2024 and 30.1% the year after. Revenue peaked at Rs 1,335.03 crore with operating cash flow of minus Rs 162.03 crore, then fell to Rs 938.18 crore with plus Rs 528.88 crore. Why it mattered: This is a trading business: volume and the timing of payments swing cash and borrowings by hundreds of crore while profit stays at Rs 4 to 6 crore. What changed: Borrowings went from Rs 216.60 crore (July 2023) to Rs 434.85 crore (July 2024) to Rs 247.07 crore (July 2025). The long-term consequence: The provisional year to mid-July 2026 doubles profit to Rs 13.70 crore on lower gross profit: other income, not trading, did it.
The thread through the six decades is that STC’s position rested on the Government’s designation, and its balance sheet on its own: first salt, then fertiliser and sugar as policy instruments, then a group of small companies financed from the parent. When the designation went in 2021, what remained was a trading company with one profitable line.
The franchise ended in 2021. Who owns and runs what remains?
05. A state-linked company with no controlling holder
STC has no controlling shareholder. The Government of Nepal holds 11.59% and a state-owned company, Food Management and Trading Company (formerly National Trading Limited), 9.66%: 21.25% between them. The largest private holder is Laxmi Holdings Pvt. Ltd with 5.98%. Eleven holders above 1% account for 49.23%; the other 50.77% is held in parcels below 1%, and the register is not published.1
- Government of Nepal (11.59%). 371,569 shares at July 2025, unchanged from July 2024: the largest single holder. It nominates a director, a Joint Secretary of the Ministry of Industry, Commerce and Supplies, a seat that was vacant at the 59th annual meeting. The Government’s approval is needed before cash dividends that shareholders have approved can be paid (section 182(2) of the Companies Act 2063, as the auditor records).
- Food Management and Trading Company (9.66%). 309,735 shares (note 14.3; the general-information note prints 9.67%). It nominates a director, its own chief executive; that seat was also vacant at the 59th annual meeting after the nominee resigned. With the Government it holds 21.25%.
- Three investment companies (9.67%). Laxmi Holdings Pvt. Ltd holds 5.98% (191,683 shares), the largest private holder; Diyo Investment Pvt. Ltd 2.11% and SHM Investment & Trade Pvt. Ltd 1.58%. The annual report does not say who stands behind them.
- Individual holders above 1% (18.31%). Six individuals hold 5.05%, 3.66%, 3.24%, 3.12%, 1.63% and 1.61%. A director who resigned in December 2024 holds 3.66% and a serving director 1.61%. One individual’s holding fell from 4.76% to 3.12% (52,645 shares) in the year; the filing does not say why.
- Everyone else (50.77%). The annual report prints “General Public 78.74%” for all shares not held by the Government and Food Management and Trading Company. Our calculation: the eleven holders above 1% account for 49.23% in all, so the remainder is 50.77%. Who holds it, and how concentrated it is, is not in the filings we could read.
- Metro Kathmandu Gas Industries. STC bought Rs 99.50 crore of LP gas from it in the year to mid-July 2025: 100.5% of STC’s gas sales of Rs 99.00 crore, a segment that lost Rs 2.84 crore at gross profit. STC advanced it Rs 100.77 crore during the year (gross flows) and was owed Rs 44.33 crore at year-end.
- Food manufacturers. Khadya Udhyog (flour, subsidiary) owes STC Rs 11.19 crore, Himalayan Khadya and Packing Udhyog (subsidiary) Rs 22.31 crore and Nepal Vanaspati Ghee (associate) Rs 22.59 crore: Rs 56.09 crore together. STC bought Rs 27.33 crore of goods from Khadya Udhyog and Rs 12.14 crore from Himalayan Khadya in the year, and guarantees a Rs 15.47 crore bank facility of Khadya Udhyog.
- Housing and building materials. Upahar Housing Company (subsidiary) owes STC Rs 26.91 crore and Futureworks (associate) Rs 18.16 crore: Rs 45.07 crore. The directors’ report says Upahar has built eight earthquake-resistant homes on its own land at Chandragiri and is trying to sell them.
- Morang Sugar Mills. STC holds equity at a cost of Rs 0.11 crore and preference shares of Rs 27.95 crore, and is owed Rs 12.86 crore. The directors’ report says the mill could not be restructured and that its farm land is being used to grow cane for sale to other mills. STC’s allowance for loss on investments, Rs 22.16 crore, is not allocated by company in the note we read.
- Other group balances. Butwal Spinning Mills Rs 3.82 crore, Gorakhkali Rubber Rs 2.29 crore, Subarna Pharmaceuticals Rs 0.51 crore, Gharelu Hastakala Rs 0.34 crore and Hastakala Rs 0.04 crore: Rs 7.00 crore together.
- Lenders. Finance cost was Rs 41.45 crore in the year to mid-July 2025 (Rs 57.69 crore the year before), Rs 40.84 crore of it on short-term and demand loans. Borrowings were Rs 247.07 crore at year-end against Rs 434.85 crore a year earlier. Against the average of the two, the effective rate is about 12% (our estimate).
- Suppliers. Trade payables rose Rs 570.37 crore to Rs 834.93 crore, 241 days of cost of sales on average balances (our calculation). The cash-flow statement credits Rs 575.93 crore to the change in trade payables, other liabilities and provisions.
- Group companies. Gross balances were Rs 165.34 crore at July 2025 (Rs 169.52 crore a year earlier): 101.5% of equity, carried at Rs 156.84 crore after an allowance of Rs 8.5 crore. The notes we read give no interest rates, terms or repayment dates.
- The Government. The Government owed STC Rs 36.77 crore at July 2025: Rs 34.66 crore of fertiliser subsidy, of which Rs 22.48 crore has been withheld since a committee decision of December 2015, and Rs 2.12 crore of older price-support dues. STC in turn faces a Rs 16.44 crore tax demand under review, with Rs 4.65 crore deposited.
- Shareholders. No cash dividend was paid in the year to mid-July 2025 (Rs 0.22 crore the year before). Cash dividends that shareholders approved for three earlier years, Rs 5.04 crore in all, remain unpaid awaiting Government approval. The dividend for the year to July 2025 is 9.5% in bonus shares and 0.5% in cash (Rs 16.04 lakh, to cover tax on the bonus).
| Holder | Shares | At July 2025 | At July 2024 |
|---|
| Government of Nepal, Ministry of Finance (public debt account) | 371,569 | 11.59% | 11.59% |
| Food Management and Trading Company Ltd. (formerly National Trading Ltd.) | 309,735 | 9.66% | 9.66% |
| Laxmi Holdings Pvt. Ltd | 191,683 | 5.98% | 5.98% |
| Individual holder | 162,038 | 5.05% | 5.05% |
| Individual holder (a director who resigned in December 2024) | 117,332 | 3.66% | 3.66% |
| Individual holder | 103,933 | 3.24% | 3.24% |
| Individual holder | 99,941 | 3.12% | 4.76% |
| Diyo Investment Pvt. Ltd | 67,667 | 2.11% | 2.11% |
| Individual holder | 52,391 | 1.63% | 1.63% |
| Individual holder (a serving director) | 51,519 | 1.61% | 1.61% |
| SHM Investment & Trade Pvt. Ltd | 50,777 | 1.58% | 1.58% |
| Vastok International Pvt. Ltd | 30,219 | 0.94% | 1.05% |
| Total listed (eleven holders above 1% in July 2025; twelve in July 2024) | 1,578,585 | 49.23% | 51.92% |
Source: 1, note 14.3. Private individuals are described by role. The totals are our arithmetic on the printed percentages. The 78.74% the annual report labels “general public” includes everyone who is not the Government or Food Management and Trading Company; the register below 1% is not published.
With no holder above 12%, control rests on which holders vote together and on the Government’s approval powers, not on a promoter family. We found no shareholder agreement in the filings and infer none from names.
The accounts of 11 February 2026 carry eight board signatures: the chairman, Pradip Lal Shrestha, five other directors elected by shareholders, and the nominees of the Government and of Food Management and Trading Company. By the 59th annual meeting on 12 June 2026 both nominee seats were vacant, management said, because the Government’s nominee had retired and the other company’s chief executive had resigned, leaving six. Two shareholder-seat directors had resigned in the year to mid-July 2025.1,3
| Name | Role and seat | Status at the 59th AGM (12 June 2026) | Shares held |
|---|
| Pradip Lal Shrestha | Chairman · Elected by shareholders | In office | 26,654 (0.83%) |
| Anjan Shrestha | Director; convenor of the audit committee · Elected by shareholders | In office (absent from the 59th AGM) | 9,158 (0.29%) |
| Narayan Das Manandhar | Director · Elected by shareholders | In office | 51,518 (1.61%) |
| Rajesh Kumar Shrestha | Director; member of the audit committee · Elected by shareholders | In office | 1,391 (0.04%) |
| Sunil Shrestha | Director · Elected by shareholders | In office | 304 |
| Devendra Bhakta Shrestha | Director · Shareholder seat, filled in the year to mid-July 2025 for the remaining term | In office; appointment approved by the 59th AGM | 438 |
| Dilli Raj Lamsal | Director (listed as present at the 59th AGM) · Not documented in the sources read | Attendance record only | not stated |
| Shivaram Pokharel | Government of Nepal nominee; Joint Secretary, Ministry of Industry, Commerce and Supplies · Government (11.59%) | Former: retired before 12 Jun 2026 | Government’s 371,569 shares (11.59%) |
| Ramesh Acharya | Food Management and Trading Company nominee; its Chief Executive Officer · Food Management and Trading Company (9.66%) | Former: resigned before 12 Jun 2026 | Company’s 309,735 shares (9.66%) |
| Rajendra Man Sherchan | Director · Shareholder seat | Former: resignation accepted 19 Dec 2024 (4 Poush 2081) | 117,332 (3.66%) as a shareholder |
| Shankar Prasad Pandey | Director · Shareholder seat | Former: resigned during the year to mid-July 2025 | not stated |
| Leela Prasad Sharma | Former Government nominee; Joint Secretary · Government | Former: replaced during the year to mid-July 2024 | n/a |
| Mohan Prakash Chand | Former Food Management and Trading Company nominee; its Chief Executive Officer · Food Management and Trading Company | Former: replaced during the year to mid-July 2024 | n/a |
Sources: 1,2,3,9. Directors’ report and signature blocks of the 58th and 59th annual reports; the AGM attendance list and management’s answers about the vacant seats. Nominee directors of the Government and of Food Management and Trading Company are named in the annual report and shown by office on the company’s site. Shares are the director’s own, as printed.
- Pradip Lal Shrestha (Chairman, with five other directors elected by shareholders). Signed the accounts for the years to mid-July 2024 and 2025 and chaired the 59th annual meeting on 12 June 2026, where shareholders approved 9.5% bonus shares, a 0.5% cash dividend, new Articles and borrowing above paid-up capital plus reserves. The same board signed two qualified audit opinions in a row (accounts approved 10 January 2025 and 11 February 2026). Elected directors hold from under 0.01% to 1.61% each, so this is not a promoter board. Whether it is independent of management the filings do not say.
- Two Government-linked seats (Government of Nepal (11.59%) and Food Management and Trading Company (9.66%)). Each nominates a director: a Joint Secretary of the Ministry of Industry, Commerce and Supplies, and the company’s chief executive. Both nominees were replaced in the year to mid-July 2024. By the 59th annual meeting both seats were vacant: the Joint Secretary had gone on compulsory retirement and the company’s chief executive had resigned, management told shareholders. Together they hold 21.25%, and the Government’s approval gates the Rs 5.04 crore of unpaid dividends and the Rs 22.48 crore of withheld subsidy. In our view the shareholder best placed to resolve both has no one on the board.
- Urmila Shrestha (Chief Executive Officer). General manager in 2009, 2011 and 2012 reports, chief executive in 2016 and today; signs the accounts as chief executive. The general manager of 2012 was one of three senior officers named in a consumer forum’s complaint, which STC called baseless; no outcome was found. The same management ran STC through the end of the monopoly in 2021, the fertiliser expansion and the 2026 board vacancies. No court finding against the chief executive or the company was found in any matter in the legal register; the one administrative fine (Rs 3 lakh, 2026) is against the company. The record is equally silent on how the older matters ended.
- Kuber N. Bhattarai & Co. (Statutory auditor (partner CA Anil Joshi)). Qualified opinions for the years to mid-July 2024 and 2025 on four grounds; two emphasis paragraphs; inventories as the key audit matter. Fee Rs 10 lakh a year, proposed again for the year to mid-July 2026. The audit committee (an elected director as convenor, another as member, the head of internal audit as secretary) drew meeting allowances of Rs 1.085 lakh in the year. A qualification repeated for a second year is a fact about the accounts, not an allegation about anyone. We found no plan in the directors’ report to consolidate or to commission an actuarial valuation, and how long this firm has audited STC is not stated.
| Name | Role | What the sources show |
|---|
| Urmila Shrestha | Chief Executive Officer | General manager in 2009, 2011 and 2012 reports; chief executive in 2016 and in the 2025-2026 accounts. Holds 3,811 shares. |
| Kumar Rajbhandari | Deputy Chief Executive Officer; spokesperson | Deputy general manager in the 2021 press; spokesperson on the company site; spoke for the company to a parliamentary committee in May 2026. |
| Oam Siddhi Gubhaju | Deputy Chief Executive Officer, Finance and Accounts Division | Signs the 2025 and 2026 statements and the quarterly reports. |
| Umesh Kumar Ojha | Divisional Manager and Company Secretary | Attends the AGM; signs the minute. |
| Assistant Chief Executive Officers | Three named on the company website; a fourth appears in the 2026 press | Regional and central divisions; the site and the annual report do not agree on the list. |
Sources: 1,3,8,9,23,25,30,35,39,40. Tenure is what the public record and the filings show, not the company’s appointment dates, which are not published.
Our reading of governance. In its favour: an audit committee chaired by an elected director, accounts filed with a full audit report, and no promoter family. Against it: a qualified audit opinion two years running, statements that leave out the group, two empty Government-linked seats, and accounts approved almost seven months after year-end (11 February 2026 for a year ended 16 July 2025). None of these is a finding of wrongdoing.
Why this matters. In a company with no promoter, the board and the Government are the control. When two seats are empty and the Government must approve both the dividends and the old subsidy dispute, decisions tend to be slow rather than contested.
We know who sits at the table. What does the company actually do?
06. One product that earns, several that trade
STC makes money in one place. In the audited year to mid-July 2025 salt was 41.2% of sales and earned 98.3% of gross profit. Fertiliser earned Rs 20.39 crore on Rs 282.28 crore of sales; gas lost Rs 2.84 crore; the “others” group, which holds sugar, rice, flour, ghee, cement, paper and more, lost Rs 15.78 crore.1
| Year to mid-July 2025 | Salt | Fertiliser | Gas | Others | Total |
|---|
| Sales, Rs crore | 386.14 | 282.28 | 99.00 | 170.76 | 938.18 |
| Share of sales | 41.2% | 30.1% | 10.6% | 18.2% | 100% |
| Gross profit, Rs crore | 103.78 | 20.39 | −2.84 | −15.78 | 105.55 |
| Gross margin | 26.9% | 7.2% | −2.9% | −9.2% | 11.25% |
| Share of gross profit | 98.3% | 19.3% | −2.7% | −15.0% | 100% |
Source: 1, note 32.1. “Others” is sugar, seed, wheat, cement, iron and steel, rice, flour, ghee and oil, paper and kitchen appliances. Gross profit is after trading expenses and before staff, administration and interest; the company does not allocate those to segments. Shares are our arithmetic.
- Salt: share of sales: 41.2% (Rs 386.14 crore of Rs 938.18 crore)
- Salt: share of gross profit: 98.3% (Rs 103.78 crore of Rs 105.55 crore)
- Fertiliser: share of sales: 30.1% (Rs 282.28 crore)
- Fertiliser: share of gross profit: 19.3% (Rs 20.39 crore)
- Gas and all other lines: share of sales: 28.8% (Rs 269.76 crore, gross loss Rs 18.62 crore)
Segment note. Gross profit here is after trading expenses and before staff, administration and interest. Gas and the “others” group together made a gross loss of Rs 18.62 crore, so their share of gross profit is negative (minus 17.6%) and is not drawn.
The year before, for comparison
| Year to mid-July 2024 | Salt | Fertiliser | Paper | Others | Total |
|---|
| Sales, Rs crore | 329.18 | 622.90 | 173.06 | 209.89 | 1,335.03 |
| Share of sales | 24.7% | 46.7% | 13.0% | 15.7% | 100% |
| Gross profit, Rs crore | 108.53 | 25.05 | 8.26 | −36.87 | 104.98 |
| Gross margin | 33.0% | 4.0% | 4.8% | −17.6% | 7.9% |
| Share of gross profit | 103.4% | 23.9% | 7.9% | −35.1% | 100% |
Source: 2, note 32.1. The segments are drawn differently from the year after (paper is separate and gas sits in “others”), so only the salt line is comparable between the two tables. Salt’s share of gross profit exceeds 100% because the other segments lost money in total.
Salt’s sales rose 17.3% and its gross profit fell 4.4% between the two years, so its margin fell from 33.0% to 26.9%. Two years are not a trend; they are the only two the company’s segment note gives in this form.2,1
In 2021 STC told the Kathmandu Post it procures salt from Gujarat in India and sells it to dealers at Rs 18.50 a kg, with retail at about Rs 20; it told Onlinekhabar that it sold at neither a profit nor a loss in the Terai and at a loss elsewhere, partly covered by a Government subsidy it put at Rs 16 to 17 crore a year.35,36 In September 2026 it said it held seven months of salt stock.29 The annual report does not publish tonnes sold, so STC’s share of the salt market cannot be computed.
Is STC the “sole supplier of salt within Nepal”, as its audited notes say?1 Three things are established. The legal exclusivity ended in June 2021, when the budget made salt “competitive” with private participation.35,36 We found no private importer’s volumes in the annual reports or in English and Nepali press to 17 October 2026. And STC’s salt sales rose in the two years after. So the claim is the company’s statement, the monopoly in law is over, and dominance in fact is plausible but cannot be measured.
Fertiliser is a pass-through. STC imports a 30% share of the subsidised fertiliser, and sells it at rates the Government fixes. The directors’ report records 141,843.5 tonnes imported in respect of the year to mid-July 2025, although the stock table shows 77,150 tonnes bought in the year. The Government then pays the difference as subsidy: Rs 813.59 crore against purchases of Rs 1,141.01 crore, of which it had paid Rs 802.62 crore by year-end.1 One DAP cargo that STC bought from Indian Potash Limited by letter of credit is the subject of the Calcutta suit in section 9.11
| Subsidised fertiliser, year to mid-July 2025 | Urea | DAP | Potash | Total |
|---|
| Quantity in the subsidy claim, tonnes | 94,045 | 42,724 | 5,075 | 141,844 |
| Purchase cost, Rs crore | 618.55 | 496.44 | 26.02 | 1,141.01 |
| “Sales value” at the Government’s fixed rate, Rs crore | 131.66 | 183.71 | 15.73 | 331.11 |
| Subsidy on purchase value, Rs crore | 486.88 | 312.73 | 10.29 | 809.90 |
| Fixed sales rate, Rs per tonne | 14,000 | 43,000 | 31,000 | |
| Tonnes purchased in the year (stock table) | 72,076 | 0 | 5,075 | 77,150 |
| Tonnes sold in the year (stock table) | 77,672 | 23,190 | 5,466 | 106,328 |
Source: 1, note 13. The subsidy for the year, with Rs 3.55 crore of handling charges and Rs 0.14 crore of surveyor fees, was Rs 813.59 crore; the Government paid Rs 802.62 crore in the year and the closing receivable was Rs 34.66 crore. The claim quantity (141,844 tonnes) and the stock table (77,150 tonnes bought, 106,328 sold) are different measures in the same note and we do not reconcile them.
Gas and the “others” group are where the trading costs sit. STC bought Rs 99.50 crore of LP gas from its subsidiary Metro Kathmandu Gas Industries, 100.5% of its gas sales of Rs 99.00 crore, and made a gross loss of Rs 2.84 crore on gas.1 The directors’ report says STC follows Government directions to sell some goods even below cost.1 In September 2026 the cabinet let it import 25,000 tonnes of sugar at 1% duty; it sold sugar at Rs 105 a kg against about Rs 140 in the market.28
The same channel is under strain in 2026. In May STC’s deputy chief executive told a parliamentary committee that it had only about 39,000 tonnes of fertiliser in stock and had sold about 126,000 tonnes in the year, citing the international crisis, a shortage of budget and port capacity.30 A report of late July put its stock at roughly 26,000 tonnes of urea, 28,750 of DAP and 5,000 of potash.31 A Kathmandu Post report carried by a news network quoted the corporation saying that the gap between suppliers’ contract prices and market prices had reached USD 400 a tonne, making delivery less likely, and that a fresh tender was out with an uncertain result.32
- Reach. The company says it works through 93 offices (22 offices and 71 liaison offices), six packing units and about 500 staff, and, by its own 2021 account, sells salt in the high hills below the cost of carrying it. Weak spot: The network is the company’s own description. The costs of the hill and mountain delivery were Rs 16 to 17 crore a year of Government subsidy, by an STC officer’s account in 2021, and the officer said that was not enough.
- Salt economics. Salt earned a 26.9% gross margin in the year to mid-July 2025 and 33.0% the year before, and sales rose 17.3% after the monopoly ended. STC says it held seven months of salt stock in September 2026. Weak spot: The margin fell 6.1 points in a year, and a 2023 statement attributed to the chief executive said salt was being traded at a loss, which the audited segment note does not show.
- The state channel. STC imports a 30% share of the subsidised fertiliser (its directors’ report records 141,843.5 tonnes), and in September 2026 the cabinet let it import 25,000 tonnes of sugar at 1% duty, which it sold at Rs 105 a kg against Rs 140 in the market. Weak spot: The channel carries price and inventory risk for the Government’s policy: fertiliser earned Rs 20.39 crore of gross profit on Rs 282.28 crore of sales, and the sugar sale was followed by a fine over stock records.
- Land and depots. Property, plant and equipment stand at Rs 144.32 crore; a Rs 39.52 crore revaluation surplus rests on land revalued in 2058 BS (2001); rent earned Rs 1.57 crore in the year. Weak spot: The revaluation is 24% of equity and was last done in 2001; it is a book figure, not a market value, and the notes we read do not give the land’s area or location.
- A balance sheet with some cushion. Equity was Rs 162.97 crore, the year-end net debt was minus Rs 81.14 crore (net cash) and borrowings fell Rs 187.79 crore in the year to mid-July 2025. Weak spot: Net cash at one date follows from payables of Rs 834.93 crore; 66.1% of equity is conditional reserves that are not distributable profit (section 8).
Salt carries the company. How much of what it earns stays?
07. Revenue swings, gross profit does not, interest takes the rest
Revenue has swung between Rs 717 crore and Rs 1,335 crore in six audited years. Gross profit has stayed within Rs 86 to 108 crore for five of them. Profit after tax has stayed within Rs 4.19 to 6.33 crore for six.2,1
Revenue, years to mid-July, Rs crore
- Jul 20: Rs 974.16 crore
- Jul 21: Rs 1,039.90 crore
- Jul 22: Rs 717.01 crore
- Jul 23: Rs 877.44 crore
- Jul 24: Rs 1,335.03 crore
- Jul 25: Rs 938.18 crore
- Jul 26: Rs 1,222.57 crore (provisional, unaudited)
STC alone. Audited except the last column (provisional). Revenue has swung between Rs 717 crore and Rs 1,335 crore; the average of the six audited years is Rs 980 crore. Axis starts at zero.
Gross profit, years to mid-July, Rs crore
- Jul 20: not shown
- Jul 21: Rs 103.30 crore
- Jul 22: Rs 86.50 crore
- Jul 23: Rs 107.84 crore
- Jul 24: Rs 104.98 crore
- Jul 25: Rs 105.55 crore
- Jul 26: Rs 88.64 crore (provisional, unaudited)
Gross profit from the five-year charts and the statements; the year to mid-July 2020 is not shown because we did not read it. Gross profit stayed within Rs 86 to 108 crore for five years while revenue moved by Rs 618 crore; the provisional year is the second lowest.
Profit after tax, years to mid-July, Rs crore
- Jul 20: Rs 6.33 crore
- Jul 21: Rs 5.33 crore
- Jul 22: Rs 4.99 crore
- Jul 23: Rs 5.37 crore
- Jul 24: Rs 4.19 crore
- Jul 25: Rs 6.32 crore
- Jul 26: Rs 13.70 crore (provisional, unaudited)
Between Rs 4.19 and Rs 6.33 crore for six audited years; the provisional year is Rs 13.70 crore, and its source is other income (section 8).
Year to mid-July 2025
- Revenue: Rs 938.18 crore (down 29.7%). Down from Rs 1,335.03 crore. Salt Rs 386.14 crore, fertiliser Rs 282.28 crore, gas Rs 99.00 crore and everything else Rs 170.76 crore.
- Cost of sales: Rs 832.63 crore (88.7% of revenue). Cost of goods Rs 669.71 crore plus trading expenses Rs 162.92 crore. Inventories were Rs 428.43 crore, Rs 214.47 crore of it stock in transit.
- Gross profit: Rs 105.55 crore (11.25% margin). Salt Rs 103.78 crore, fertiliser Rs 20.39 crore, gas minus Rs 2.84 crore, everything else minus Rs 15.78 crore. Salt’s own margin was 26.9%.
- Overheads, provisions, other income: Rs 54.71 crore net (5.8% of revenue). Staff Rs 35.64 crore, administration Rs 19.08 crore, provisions Rs 6.50 crore and depreciation Rs 1.22 crore, offset by other operating income of Rs 7.74 crore. That leaves Rs 50.84 crore of operating profit before interest.
- Interest: Rs 41.45 crore (81.5% of that). Rs 40.84 crore on short-term and demand borrowings, Rs 0.61 crore on the term loan. Profit before tax was Rs 9.40 crore.
- Net profit: Rs 6.32 crore (0.67% of revenue). Tax of Rs 3.07 crore: current tax Rs 6.34 crore less a deferred-tax credit of Rs 3.27 crore. EPS Rs 19.72 on 3,207,168 shares.
Year to mid-July 2026
- Revenue: Rs 1,222.57 crore (up 30.3%). The report gives no split by product, so we cannot say which line grew. Nine-month sales were up 27% on the year before, per the directors’ report.
- Cost of sales: Rs 1,133.93 crore (92.75% of revenue). Revenue less gross profit: our subtraction from the two printed lines.
- Gross profit: Rs 88.64 crore (7.25% margin). Down Rs 16.91 crore from Rs 105.55 crore on 30% more revenue. The gross margin fell from 11.25% to 7.25%.
- Other income: Rs 24.56 crore (2.0% of revenue). Up from Rs 7.74 crore. Rs 22.25 crore was already booked by the half-year (Rs 2.58 crore in the same six months a year earlier) and the year-end page adds little after that. The statements do not itemise it.
- Interest: Rs 30.40 crore (down Rs 11.05 crore). The one line that clearly helped. The year-end borrowings figure is not in the provisional report we read, so we cannot say whether debt or rates fell.
- Net profit: Rs 13.70 crore (1.1% of revenue). Profit before tax Rs 22.26 crore after a Rs 12.00 crore provision, a Rs 2.47 crore staff bonus and tax of Rs 8.57 crore. EPS Rs 39.01 on the exchange’s share count; the company annualises it at Rs 38.83.
- Jul 23: Rs 45.30 crore interest; Rs 9.08 crore profit before tax
- Jul 24: Rs 57.69 crore interest; Rs 7.32 crore profit before tax
- Jul 25: Rs 41.45 crore interest; Rs 9.40 crore profit before tax
- Jul 26 (p): Rs 30.40 crore interest; Rs 22.26 crore profit before tax
Our calculation: profit before tax plus finance cost. In the provisional year the profit before tax, and so the column, includes Rs 24.56 crore of other income and is after a Rs 2.47 crore staff bonus. Interest took 83.3%, 88.7% and 81.5% in the three audited years.
Of every Rs 100 of operating profit before interest, year to mid-July 2025
- Interest to lenders: 81.5% (Rs 41.45 crore)
- Tax: 6% (Rs 3.07 crore)
- Profit after tax, for shareholders: 12.4% (Rs 6.32 crore)
Our calculation on the audited statements: Rs 50.84 crore of profit before interest, of which Rs 41.45 crore went to lenders, Rs 3.07 crore to tax and Rs 6.32 crore remained. The three add to 99.9 because of rounding.
The effective interest rate is about 12% on the average of the opening and closing borrowings (Rs 41.45 crore on Rs 340.96 crore), and interest cover was between 1.13 and 1.23 times in the three audited years. A rise of one percentage point on year-end borrowings of Rs 247.07 crore costs about Rs 2.5 crore, 39% of the last audited profit. These are our arithmetic on printed lines.
| Standalone, years to mid-July | Jul 23 | Jul 24 | Jul 25 | Jul 26 (p) |
|---|
| Revenue, Rs crore | 877.44 | 1,335.03 | 938.18 | 1,222.57 |
| Gross profit, Rs crore | 107.84 | 104.98 | 105.55 | 88.64 |
| Gross margin | 12.29% | 7.86% | 11.25% | 7.25% |
| Other income, Rs crore | 3.65 | 8.92 | 7.74 | 24.56 |
| Finance cost, Rs crore | 45.30 | 57.69 | 41.45 | 30.40 |
| Profit before tax, Rs crore | 9.08 | 7.32 | 9.40 | 22.26 |
| Profit after tax, Rs crore | 5.37 | 4.19 | 6.32 | 13.70 |
| Earnings per share, Rs (as printed) | 19.24 | 13.06 | 19.72 | 39.01 |
| Interest cover, times (operating profit before interest ÷ finance cost) | 1.20 | 1.13 | 1.23 | n/a |
| Interest as share of operating profit before interest | 83.3% | 88.7% | 81.5% | n/a |
| Operating cash flow, Rs crore | 113.51 | −162.03 | 528.88 | n/a |
| Capital expenditure, Rs crore | 1.09 | 0.34 | 2.55 | n/a |
| Inventories, Rs crore | 331.51 | 330.92 | 428.43 | n/a |
| Trade receivables, Rs crore | 53.02 | 107.98 | 94.51 | n/a |
| Trade payables, Rs crore | 421.86 | 264.56 | 834.93 | n/a |
| Borrowings, Rs crore | 216.60 | 434.85 | 247.07 | n/a |
| Equity, Rs crore | 158.14 | 161.43 | 162.97 | n/a |
| Return on equity | 3.39% | 2.59% | 3.88% | n/a |
Sources: 2,1,4. (p) provisional and unaudited. EPS is as printed in each year on that year’s share count (the last is the exchange’s figure on the share count then in use); it is not restated for the bonus shares. “n/a” means we did not read it for this file: the provisional report carries no cash-flow statement in the pages we used. Return on equity is profit over year-end equity, our calculation.
- Salt is 41% of STC’s sales and 98% of its gross profit. Why it matters: Fertiliser, gas and everything else together sold Rs 552.04 crore and earned Rs 1.77 crore of gross profit: about Rs 0.32 on every Rs 100.
- In the year to mid-July 2025 STC’s operating cash flow was 84 times its profit. Why it matters: Rs 528.88 crore against Rs 6.32 crore, because a combined line for payables, other liabilities and provisions added Rs 575.93 crore (trade payables alone rose Rs 570 crore) while borrowings fell Rs 188 crore. It is a photograph of one date.
- The Rs 3 lakh sugar fine is 0.47% of the last audited profit and about a quarter of one day’s interest. Why it matters: Rs 41.45 crore of interest a year is about Rs 11.4 lakh a day (our arithmetic). The amount is trivial; the question it raises, about stock records, is not.
- The Government has withheld a Rs 22.48 crore fertiliser subsidy since 15 December 2015. Why it matters: It is carried in full as a receivable: 13.8% of equity, in a company that borrows at about 12%. The Government is also STC’s largest shareholder.
- Shareholders have approved cash dividends for three earlier years that STC has not been able to pay. Why it matters: Rs 3.20 crore, Rs 1.10 crore and Rs 0.74 crore wait on Government approval under section 182(2) of the Companies Act 2063, and the auditor draws attention to it.
- Half of the year-end inventory had not arrived. Why it matters: Stock in transit was Rs 214.47 crore of Rs 428.43 crore. The auditor says all of it was received by the time the accounts were approved, and also lists inventories as the key audit matter.
- Nepal’s salt once crossed the Himalaya by barter. Why it matters: Tibetan rock salt moved south for grain until 1959, and the Sankhu customs post traded it until 1967; Indian sea salt gradually replaced it. STC was registered in 1963.
The profit is thin and mostly spent on interest. Does it turn into cash, and is the balance sheet as strong as it looks?
08. Cash, group balances, the audit and the 2026 profit
Profit is one view of a company. Cash flow, the balance sheet, the auditor’s opinion and the notes are others, and in STC’s case they tell a different story.
| Rs crore | Year to Jul 2023 | Jul 2024 | Jul 2025 |
|---|
| Profit after tax | 5.37 | 4.19 | 6.32 |
| Cash from operating activities | 113.51 | −162.03 | 528.88 |
| of which: change in inventories | −159.65 | 0.59 | −97.52 |
| of which: change in trade receivables | −14.87 | −58.00 | 10.00 |
| of which: change in trade payables, other liabilities and provisions (one combined line) | 220.05 | −152.48 | 575.93 |
| memo: change in trade payables on the balance sheet | | | 570.37 |
| of which: change in Government receivables | 16.36 | −7.24 | −9.16 |
| Net working capital at year-end (our definition) | −16.97 | 201.95 | −275.21 |
| Cash and bank balances, year-end | 34.65 | 33.04 | 326.92 |
| Borrowings, year-end | 216.60 | 434.85 | 247.07 |
Sources: 2,1. Working-capital lines are as printed in the cash-flow statements; other lines also move operating cash flow. Net working capital here is inventories plus trade receivables plus the Government receivable, less trade payables. Over the three years operating cash flow was Rs 480.36 crore against Rs 15.88 crore of profit, and the swing in net working capital between July 2024 and July 2025 was Rs 477.16 crore.
Cash flow is payables. Operating cash flow was Rs 113.51 crore, minus Rs 162.03 crore and Rs 528.88 crore in three years in which profit never passed Rs 6.32 crore. The cash-flow statement credits Rs 575.93 crore to a single combined line, the change in trade payables, other liabilities and provisions, in the last year: 108.9% of operating cash flow. Trade payables alone rose Rs 570.37 crore on the balance sheet, so they are most of that line, but the line is not trade payables only. A rise in supplier credit is a financing of the business by suppliers, not operating cash generation that can be repeated. Net working capital swung by Rs 477.16 crore, from plus Rs 201.95 crore to minus Rs 275.21 crore.
The 2025 year-end is a photograph taken when suppliers were owed Rs 834.93 crore, equal to 241 days of cost of sales, and half of the inventory (Rs 214.47 crore of Rs 428.43 crore) was dispatched by suppliers but not yet received. Net cash of Rs 81.14 crore at that date is the result of the payables, not of surplus earnings. Whether it reverses at the next year-end is the question the audited year to mid-July 2026 will answer.
Group balances. STC’s notes list balances with 12 subsidiaries, associates and related companies totalling Rs 165.34 crore, equal to 101.5% of equity. The note calls them advances to subsidiary and associate companies; the notes we read give no interest rate, term or repayment date. An allowance of Rs 8.5 crore is held against them.1
| Company | Relationship | Bought by STC in the year, Rs crore | Advances given in the year (gross), Rs crore | Owed to STC, July 2025, Rs crore | July 2024, Rs crore |
|---|
| Metro Kathmandu Gas Industries | Subsidiary | 99.50 | 100.77 | 44.33 | 43.06 |
| Khadya Udhyog | Subsidiary | 27.33 | 11.28 | 11.19 | 25.02 |
| Himalayan Khadya and Packing Udhyog | Subsidiary | 12.14 | 11.55 | 22.31 | 22.90 |
| Nepal Vanaspati Ghee Udhyog | Associate | 0.46 | 2.60 | 22.59 | 20.46 |
| Upahar Housing Company | Subsidiary | – | 0.54 | 26.91 | 26.37 |
| Futureworks Building Solution | Associate | – | 6.47 | 18.16 | 11.70 |
| Morang Sugar Mills | Associate | – | – | 12.86 | 13.03 |
| Butwal Spinning Mills | Associate | – | – | 3.82 | 3.82 |
| Gorakhkali Rubber Udhyog | Associate | – | – | 2.29 | 2.29 |
| Gharelu Hastakala, Subarna Pharmaceuticals, Nepal Hastakala | Subsidiary; other holdings | – | 0.00 | 0.89 | 0.91 |
| Total | | 139.43 | 133.21 | 165.34 | 169.60 |
Source: 1, notes 31.2 and 31.2.1. Advances given are the gross amounts printed for the year, not the change in the balance. The year-end totals are the sums of the named balances (Rs 165.34 crore in July 2025 agrees to the Rs 165.34 crore of advances in note 7); the July 2024 column adds to Rs 169.60 crore against Rs 169.52 crore in note 7, a rounding and small-item difference. Our classification: Rs 77.83 crore sits with three companies that also sell to STC (the gas, flour and packing companies) and Rs 87.51 crore with companies that sell STC little or nothing.
Counter-evidence. Part of this may be prepayment to suppliers rather than lending: STC advanced Metro Kathmandu Gas Rs 100.77 crore during the year and bought Rs 99.50 crore of gas from it, and Rs 77.83 crore of the balances sits with three companies that also sell to STC. The other Rs 87.51 crore sits with companies that sell STC little or nothing: Upahar Housing, Nepal Vanaspati Ghee, Futureworks, Morang Sugar Mills and smaller ones. That part has the look of financing, not trade, and it is why the missing group accounts matter.
The audit. Kuber N. Bhattarai & Co. qualified its opinion on the accounts for the years to mid-July 2024 and 2025 on four grounds, and drew attention to two further matters. The company’s separate statements are not a view of the group.1,2
| Matter | Standard or kind | What the auditor says | What it means for a reader |
|---|
| Credit-loss allowance on receivables | Qualification (NFRS 9) | An allowance of about Rs 19.6 crore is provided, but the auditor could not ensure it is enough on the lifetime expected-loss method. | Doubtful items are Rs 19.64 crore of Rs 114.15 crore of gross receivables (17.2%). The true loss could be higher or lower; the auditor does not quantify it. |
| Subsidiaries and associates not consolidated | Qualification (NFRS 10, NAS 28) | Seven subsidiaries (cost Rs 15.87 crore) and six associates (Rs 41.15 crore) are carried at cost, not consolidated or equity-accounted. | The statements show none of the group’s sales, profits or debts. STC’s Rs 165.34 crore of advances to subsidiaries and associates is the visible exposure. |
| Retirement benefits not valued by an actuary | Qualification (NAS 19) | Gratuity and leave provisions rest on management’s estimate; Rs 5.72 crore was added in the year and Rs 36.65 crore is the total. The auditor cannot determine the effect. | The liability may be understated or overstated; neither direction is shown. |
| Investments at cost, not fair value | Qualification (NFRS 9) | Equity and preference investments are held at cost less impairment, where the standard asks for fair value. | Listed holdings in a bank and an insurer and the unlisted stakes are not marked. An allowance of Rs 22.16 crore is already held. |
| Cash dividends approved but unpaid | Emphasis of matter (opinion not modified) | Rs 3.20 crore, Rs 1.10 crore and Rs 0.74 crore approved by shareholders await Government approval under section 182(2) of the Companies Act 2063. | A statutory gate that STC alone cannot open. |
| Stock in transit | Emphasis of matter (opinion not modified) | Rs 214.47 crore of goods dispatched by suppliers but not received at year-end, all received by the date the accounts were approved. | 50.1% of inventories was in transit on one date. |
| Inventories | Key audit matter | Rs 428 crore; the size of the balance, difficulty in physical counting and management judgement in valuation make it significant. The auditor tested controls and attended counts at major locations. | The auditor reports the work as acceptable. The management letter, which the audit report says lists control weaknesses, is not published. |
Sources: 1,2. The auditor’s report is a scan; the basis paragraphs and matters above were read from the page images. The opinion for the year to mid-July 2024 was qualified on the same four grounds.
A qualified opinion is not an allegation. It tells the reader which numbers the auditor could not fully stand behind: the loss allowance on receivables, the retirement liability, the investments and the absence of group accounts. The first two are measurable in principle and would change profit; the last two would change how the balance sheet looks, not profit.
The equity underneath: how much is distributable?
| Component of equity, July 2025 | Rs crore | Share of equity | Nature |
|---|
| Share capital | 32.07 | 19.7% | Paid-up |
| Retained earnings | 23.21 | 14.2% | Distributable, subject to approval |
| Capital donation fund | 44.29 | 27.2% | Grants from UNICEF and the Governments of Japan, India and Nepal for property; depreciation on those assets is charged to it |
| Revaluation surplus | 39.52 | 24.2% | Land revalued in 2058 BS (2001); an unrealised book gain |
| Deferred-tax reserve | 23.88 | 14.7% | Created from deferred-tax credits, which are not cash |
| Total equity | 162.97 | 100% | |
| Conditional reserves (the last three) | 107.69 | 66.1% | Our grouping: not available to pay dividends as profit |
Source: 1, statement of changes in equity and notes 15.1 and 15.2. Equity excluding the three conditional reserves is Rs 55.28 crore, about Rs 172 a share on 3,207,168 shares (our calculation).
Equity of Rs 162.97 crore includes Rs 107.69 crore (66.1%) of reserves that are not profit available to pay out. Book value per share on the audited figure is Rs 508.13; excluding those reserves it is about Rs 172.1
Dividends: approved, bonus, unpaid
| Dividend for the year to mid-July | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|
| Cash dividend, % of paid-up capital | 5 | 0.53 | 5 | 0.79 | 10 | 0.5 |
| Bonus shares, % | 20 | 10 | 10 | 15 | 0 | 9.5 |
| Payout printed in the annual report, % | n/a | 64.83 | 76.27 | 82.50 | 76.56 | n/a |
| Cash approved and still unpaid, Rs crore | 0.74 | 0 | 1.10 | 0 | 3.20 | approved 12 Jun 2026 |
Sources: 14,2,1. Rates from the portal’s dividend table, payout and unpaid amounts from the annual reports. Bonus shares are not cash: they capitalise reserves and raise the share count, which is why earnings per share is not comparable across the years. A cash dividend of 0.5% is Rs 16.04 lakh and, the AGM notice says, is declared to cover tax on the bonus.
A labelling inconsistency in the accounts, reconciled. The statement of changes in equity for the year to mid-July 2025 deducts Rs 3.20 crore (32,017,696) under a line headed “Dividend paid”, and the cash-flow reconciliation deducts the same amount among its operating adjustments, yet the financing section shows no dividend paid (Rs 0.22 crore the year before). The unpaid-dividend liability rose from Rs 2.74 crore to Rs 5.94 crore, a rise of Rs 3.20 crore (32,005,412), so the amount was recognised as owed, not paid in cash, and the “paid” label is misleading. We cannot see from the statements whether the matching rise in the liability sits inside the Rs 575.93 crore combined line, so the effect on operating cash flow (at most 0.6% of that line) is unverified. The liability of Rs 5.94 crore also exceeds the auditor’s three unpaid dividends (Rs 5.04 crore) by Rs 0.90 crore, which the notes do not itemise. We make no claim beyond what the statements show.1
Bonus shares increase the share count, not cash. The cash STC paid out was Rs 0.22 crore in the year to mid-July 2024 and nothing in the year to mid-July 2025; Rs 5.04 crore of cash dividends that shareholders approved for three earlier years has not been paid because the Government has not given the approval the Companies Act requires.1,14
The provisional profit. Profit before tax rose Rs 12.87 crore, from Rs 9.40 crore to Rs 22.26 crore, while revenue grew 30.3%. The bridge shows where it came from.4,1
| Step, year to mid-July 2025 to year to mid-July 2026 | Rs crore | Label |
|---|
| Profit before tax, audited year to mid-July 2025 | 9.40 | Fact |
| Gross profit (105.55 to 88.64) | −16.91 | Fact |
| Other income (7.74 to 24.56) | +16.82 | Fact |
| Finance cost (41.45 to 30.40) | +11.05 | Fact |
| Provisions (6.50 to 12.00) | −5.50 | Fact |
| All other lines, net: staff, administration, depreciation and bonus | +7.41 | Our residual |
| Profit before tax, provisional year to mid-July 2026 | 22.26 | Fact |
Sources: 4,1. The steps add to the Rs 12.87 crore rise (they sum to Rs 22.27 crore because of rounding). Before other income and provisions, the core result moved from Rs 8.16 crore to Rs 9.71 crore (our calculation, after the staff bonus).
- Other income: Best supported. For: Other income rose Rs 16.82 crore, from Rs 7.74 crore to Rs 24.56 crore; Rs 22.25 crore had been booked by the half-year, against Rs 2.58 crore in the same six months a year earlier. Against: In the audited year other income of Rs 7.74 crore was bank interest Rs 2.99 crore, rent Rs 1.57 crore, dividends Rs 1.32 crore and miscellaneous items Rs 1.84 crore; the two years before were Rs 3.65 crore and Rs 8.92 crore. The provisional statements do not itemise it, and the half-year amount is a round Rs 22.25 crore. It is the largest single item in the bridge and the one with the least explanation. What it is, and whether it recurs, is unknown.
- Lower interest: Supported. For: Finance cost fell Rs 11.05 crore, from Rs 41.45 crore to Rs 30.40 crore. Year-end borrowings had already fallen Rs 187.79 crore by July 2025. Against: The provisional report we read gives no year-end debt, so we cannot say whether lower borrowings, lower rates or both explain it. A real help to profit if debt stays lower, and the second-largest item in the bridge.
- Lower staff, administration and other lines: Unknown. For: All lines other than gross profit, other income, interest and provisions were Rs 7.41 crore better (our residual). Against: The current-year column of the year-end page is dark and we did not rely on individual rupees in it; no note explains the change. Possible, unquantified, and worth about 58% of the rise on its own if it is real.
- Higher gross profit: Not supported. For: Revenue rose 30.3%. Against: Gross profit fell Rs 16.91 crore, from Rs 105.55 crore to Rs 88.64 crore, and the margin from 11.25% to 7.25%. Trading earned less, not more. This reading is contradicted by the statements.
- Lower provisions: Not supported. For: None. Against: The provision rose from Rs 6.50 crore to Rs 12.00 crore, and Rs 8.00 crore of it was booked by the half-year. Provisions cost Rs 5.50 crore more, partly offsetting the gains above.
Before other income and provisions, the core result moved only from Rs 8.16 crore to Rs 9.71 crore. Of the year’s Rs 24.56 crore of other income, Rs 22.25 crore had been booked by the half-year, against Rs 2.58 crore in the same six months a year earlier, and the same half-year carried Rs 8.00 crore of the year’s Rs 12.00 crore provision.4,6 Neither the income nor the provision is itemised.
One reading that fits the size, which we cannot test: STC borrows at about 12% and has Rs 165.34 crore advanced to group companies, whose carry at 12% would be about Rs 20 crore a year. If a lump of interest on those advances was recognised as income in the year, the pattern would look like this; no disclosure says so, and other explanations (a reversal of provisions, a one-off gain) are equally open. The audited accounts for the year to mid-July 2026 should settle it.
The numbers say what STC earns. What do the courts, the regulators and the press say about how it behaves?
09. Every legal matter we found: 15 matters, one fine, no court finding
We registered every legal, regulatory or press-reported matter touching STC or its staff that we could find in English and Nepali up to 17 October 2026, with its status, the date we last checked, and what each side said. Filter by status or by kind, and open any card for parties, forum, reference, dates, the allegation and the response, the law, interim and final orders, amounts, accounts treatment and impact. Four items are the ones you may have read about, and they come first.
15 matters, newest checked 17 October 2026.
- L01 Consumer-protection fine: sugar stock records (October 2026). Status: Fine imposed 1 Oct 2026; outcome of any review not reported. Role: Regulatorily penalised entity. Forum: Department of Commerce, Supplies and Consumer Protection, Nepal (instant fine by an inspection officer). Allegation: The department’s information officer told Onlinekhabar that STC claimed to record daily sugar purchases, sales and stock in a stock ledger but, when the monitoring team asked, did not produce it; with no ledger the recorded stock could not be verified, and the actual stock on site could not be matched to records, so the real trade and stock of processed and unprocessed sugar was not established. The written fine records an offence under section 38 clause ङ (the fifth clause). Response: None found. No statement from STC appears in the six outlets that carried the story. Onlinekhabar says the department reports that STC received the letter, signed and sealed. Latest: Fine of Rs 3 lakh imposed; the department says STC received the letter, signed and sealed (department’s account). Not shown to be paid or challenged. Imposed: Rs 3 lakh (the top of the Rs 2 lakh to Rs 3 lakh band for this clause); claimed: n/a; recognised in the accounts: No liability in the audited accounts (post year-end); 0.47% of the last audited profit. Sources: 15,16,17,18,19,13 Last checked 2026-10-17.
- L02 CIAA v. an STC assistant manager: alleged fake academic certificates. Status: Charge sheet filed 2 Jul 2026; no hearing or ruling reported. Role: Organisation whose employee is the accused (not a party). Forum: Special Court, Kathmandu. Allegation: The CIAA alleges that the employee entered service, and was promoted, on the strength of a 1998 BSc mark-sheet attributed to Magadh University (Bodh Gaya), a migration certificate, a transfer certificate and a provisional certificate that it says are false. Response: None found. The accused’s position and any STC statement were not reported. Latest: Pending at the Special Court on the information available. Imposed: none; claimed: none; recognised in the accounts: none. Sources: 20,21 Last checked 2026-10-17.
- L03 Calcutta High Court admiralty suit: DAP short-landing, MV Magma Tenacity (March 2026). Status: Settled out of court; suit dismissed and arrest vacated on 24 Mar 2026. Role: Claimant (plaintiff). Forum: High Court at Calcutta, Admiralty jurisdiction (Commercial Division), Justice Arindam Mukherjee. Allegation: STC says it bought 25,500 tonnes of diammonium phosphate (DAP) from Indian Potash Limited, loaded at Ras Al Khair (Saudi Arabia), and that two surveyors it engaged found 25,374 tonnes discharged: a shortfall of 126 tonnes (0.49%) worth USD 102,173.40 at USD 810.90 a tonne. The vessel’s owners had their own surveyors, who, STC said, found no shortage; STC says it had not been given their reports. Response: The owners’ position is recorded only through STC’s account of their surveyors. On 24 March the court recorded that the dispute had been settled between the parties out of court and that the plaintiff was no longer interested in proceeding. Latest: Concluded by settlement within four days of filing; the settlement terms are not public. Imposed: none; claimed: USD 102,173.40 = INR 95.60 lakh = about Rs 1.53 crore at INR 1 = NPR 1.6 (our conversion); recognised in the accounts: No receivable or liability identified in the accounts we read (the matter post-dates the audited year). Sources: 11,12 Last checked 2026-10-17.
- L04 Consumer forum’s sugar-pricing complaint to the CIAA, police and the Department of Commerce (2012). Status: Outcome could not be verified from public records as of 17 Oct 2026. Role: Respondent (board of directors and three senior officers). Forum: Commission for the Investigation of Abuse of Authority; Metropolitan Police Range, Hanuman Dhoka; Department of Commerce. Allegation: The forum’s own study said STC bought 50,000 tonnes of sugar from domestic mills at Rs 52-55 a kg and sold it at Rs 76, a profit of about Rs 100 crore, and that it raised prices after selling to dealers; the forum asked for action under the Black Marketing Act. These are an advocacy group’s allegations. Response: STC called the claims baseless, said its share was about 15% of a 200,000-tonne annual demand and that it had “every proof of fair trading”. A government committee of the Director General of Commerce and the Kathmandu Chief District Officer was due to report. Latest: Latest outcome could not be verified from publicly accessible records as of 17 October 2026. Imposed: none found; claimed: about Rs 100 crore alleged profit (forum’s figure, not a finding); recognised in the accounts: none. Sources: 23,24 Last checked 2026-10-17.
- L05 Public Accounts Committee: STC’s exclusive authority and salt price (January 2011). Status: Directive reported; the committee’s later finding was not found. Role: Respondent to a parliamentary committee’s inquiry. Forum: Public Accounts Committee, Nepal. Allegation: Members voiced concern about “exorbitant pricing” of salt, then Rs 15 a kg. The committee asked STC for the documents giving it exclusive authority to trade in salt, the audited accounts and a cost breakdown within a week. Response: Reported as a directive; no STC reply was found. STC said it trades under a tripartite agreement among STC, the Government of Nepal and the Government of Japan. Latest: Unresolved in the public record. Imposed: none; claimed: none; recognised in the accounts: n/a. Sources: 25 Last checked 2026-10-17.
- L06 CIAA charge sheet: irregular sale of chemical fertiliser at the Biratnagar zonal office (2019). Status: Pending before the Supreme Court per the audited accounts (case 079-CR-1067); Special Court result not found. Role: Organisation whose employees are accused; STC itself dismissed them. Forum: Special Court, Kathmandu; now the Supreme Court of Nepal. Allegation: The CIAA charged that the three, in collusion, sold chemical fertiliser worth Rs 19.07 lakh from the warehouse irregularly, with intent to cause unlawful loss to the Government or a public body. Response: STC’s note says the matter was investigated by management and the CIAA, appropriate action was initiated and the employees were terminated. Latest: Pending at the Supreme Court as at 11 Feb 2026 (company’s account). Imposed: none; claimed: Rs 19.07 lakh (value of fertiliser); recognised in the accounts: Disclosed as a claim, not as a liability; 0.12% of equity. Sources: 22,1 Last checked 2026-10-17.
- L07 Large Taxpayers’ Office: income tax, VAT and TDS demands, the year to 2072/73 BS to 2077/78. Status: Under administrative review; not provided in the accounts. Role: Appellant (taxpayer). Forum: Inland Revenue Department, administrative review. Allegation: The office demanded additional income tax, VAT and tax-deducted-at-source (including for non-deduction of advance tax) totalling Rs 16.44 crore. Response: Appealed for administrative review; Rs 4.65 crore deposited. Latest: Under administrative review as at the August 2026 schedule. Imposed: none; claimed: Rs 16.44 crore demanded; recognised in the accounts: Disclosed as a contingent liability; the deposit of Rs 4.65 crore sits in other non-current assets; the rest (Rs 11.79 crore) is not provided. Sources: 1,4 Last checked 2026-10-17.
- L08 Labour and service matters at the Supreme Court and the Labour Court. Status: Pending (company schedule, August 2026). Role: Petitioner or party. Forum: Supreme Court (writs of certiorari); Labour Court. Allegation: Not stated: the schedule gives the writ type and the forum only. Response: STC is the party in each row. Latest: Pending as at the August 2026 schedule. Imposed: none; claimed: not disclosed; recognised in the accounts: not disclosed. Sources: 4,7 Last checked 2026-10-17.
- L09 Dispute with Joshi Biz House: two Supreme Court writs and a High Court arbitration matter. Status: Pending; subject not disclosed. Role: Petitioner or party. Forum: Supreme Court (writs of certiorari and mandamus); Patan High Court (application to set aside an arbitral award, noted as returned for arbitration). Allegation: Not stated. A press report of 2023 names a Joshi Biz as the Nepali agent of Indian Potash Limited; the schedule does not say whether this is the same entity or a fertiliser matter, so we do not draw a link. Response: Not stated. Latest: Pending; the High Court status is “returned for arbitration”. Imposed: none; claimed: not disclosed; recognised in the accounts: not disclosed. Sources: 4,7,26 Last checked 2026-10-17.
- L10 Other writs: Prime Minister’s Office and Council of Ministers; a small farmers’ cooperative; two matters involving Sun International FZE. Status: Pending or dropped from the schedule; subjects not disclosed. Role: Petitioner. Forum: Supreme Court; High Court Tulsipur, Nepalgunj. Allegation: Not stated. Response: Not stated. Latest: Subjects and outcomes not disclosed. Imposed: none; claimed: not disclosed; recognised in the accounts: not disclosed. Sources: 4,7 Last checked 2026-10-17.
- L11 Debt recovery and judgment enforcement: STC as creditor. Status: Enforcement stage (company schedule, August 2026). Role: Claimant (judgment creditor). Forum: Kathmandu District Court; Kanchanpur District Court. Allegation: Unpaid trade dues, rent and a dishonoured cheque, with judgments obtained or enforcement under way. Response: Not stated. Latest: Enforcement of judgments. Imposed: none; claimed: not disclosed; recognised in the accounts: The accounts hold an allowance of Rs 19.64 crore on trade receivables and Rs 13.1 crore on supplier advances; no link to these cases. Sources: 4,1 Last checked 2026-10-17.
- L12 Supreme Court on the salt-import monopoly (April 2005). Status: Decided 5 Apr 2005 in STC’s favour; later superseded by the 2021 budget. Role: Interested party (beneficiary of the monopoly). Forum: Supreme Court, division bench of Justices Dilip Kumar Paudel and Bala Ram KC. Allegation: The firms asked the court to order the Government to break STC’s monopoly on importing and distributing salt. Response: The court noted that STC had been distributing and iodising salt with outside help and that the other companies had not built the infrastructure to supply remote areas. Latest: Overtaken by policy in June 2021. Imposed: none; claimed: none; recognised in the accounts: n/a. Sources: 37,35,36 Last checked 2026-10-17.
- L13 Alleged irregularities in fertiliser procurement (2023): a press allegation. Status: Allegation by one outlet; no proceeding or finding found. Role: Subject of a press allegation. Forum: None found. Allegation: Himal Press reported that a ministry committee that had allocated 70% of a G2G fertiliser purchase to Krishi Samagri Company and 30% to STC reversed itself on 28 February 2023 and authorised STC to make all the procurements (about Rs 1,500 crore); that STC then ran five tenders with 10 days to bid, against the 45 days it says the Public Procurement Act requires; that three packages went to Indian Potash Limited and two to Swiss Singapore Overseas Enterprises; and that, on the competitor’s sources, prices were USD 210-220 a tonne above Iran-origin prices, which it translated into an alleged Rs 246 crore of embezzlement on tenders it puts at about Rs 833 crore in all. Response: STC’s response is not in the article. The committee’s chairman did not answer the reporter. Latest: Unresolved; an unverified allegation. Imposed: none; claimed: Rs 246 crore alleged by the outlet; not a finding; recognised in the accounts: none. Sources: 26 Last checked 2026-10-17.
- L14 Karnali Province monitoring: expired fertiliser at the Salyan depot (January 2024). Status: Order to destroy reported; no penalty or follow-up found. Role: Subject of a provincial monitoring finding. Forum: Provincial ministry monitoring visit. Allegation: The minister’s team said it found 800 sacks of expired fertiliser, said unsubsidised fertiliser of a different company was being sold at the depot’s discretion without Government subsidy or provincial recommendation, and ordered the expired stock destroyed and sold stock recalled. Response: Not in the report. Latest: Unresolved in the public record. Imposed: none; claimed: 800 sacks; recognised in the accounts: not disclosed. Sources: 27 Last checked 2026-10-17.
- L15 Government subsidy receivable withheld since 2015, and an older price-support receivable. Status: Unresolved receivable with the Government. Role: Claimant against the Government. Forum: Administrative; no proceeding disclosed. Allegation: The Government has withheld Rs 22.48 crore of the fertiliser subsidy for 2071/72 BS (2014/15) since a committee decision of 15 December 2015; Rs 2.12 crore of price-support dues from three earlier years is still uncollected. Response: The company reports the balance as a receivable and states the amount is “withheld”. Latest: Unresolved after about ten years. Imposed: none; claimed: Rs 22.48 crore withheld; Rs 2.12 crore price-support dues; recognised in the accounts: Carried in full as receivables from the Government: 21% of equity is the closing fertiliser subsidy receivable of Rs 34.66 crore, of which the withheld part is 65%. Sources: 1 Last checked 2026-10-17.
Of the 15, one is an administrative fine already imposed (Rs 3 lakh), six are pending, six are unresolved because we found no outcome, and two are concluded. No court has found against STC in any of them. The one regulator’s decision, the Rs 3 lakh fine, concerns not producing a stock ledger, and the reporting does not establish concealment or fraud. Among matters in which STC could be made to pay, only the Rs 16.44 crore tax demand (10.1% of equity) is material; the next largest sums are a Rs 19.07 lakh fertiliser case in which individuals are charged and the Rs 3 lakh fine. The 2012 allegation of about Rs 100 crore of profit on sugar is a consumer forum’s figure, not a claim against STC for payment.1,15,23
How the count works. The register has 15 entries because related items are grouped. The company’s own litigation schedule in the fourth quarterly report has 28 rows: about 12 tax matters (L07), five labour and service matters (L08), three with Joshi Biz House (L09), two other writs (L10) and six debt-recovery matters (L11). The other ten entries (L01 to L06 and L12 to L15) are regulator, criminal, press, historical or receivable items that are not rows on that schedule; L06 is disclosed in the annual report’s notes instead. The register therefore covers 28 scheduled rows and ten other matters.4,1
There is a theme, and it is ours, not a finding: records for inventory. A Rs 3 lakh fine in October 2026 for not producing a sugar stock ledger, a 2019 prosecution for irregular sale of fertiliser at one office, expired fertiliser found at a depot in 2024, and the auditor’s key audit matter on Rs 428 crore of inventories with “difficulty in physical counting”. In an inventory-heavy trading company that is the area to watch. It is not evidence of loss.
Why this matters. For a shareholder the legal record is mostly small money and old allegations with no published outcome. The matters that could affect value are the tax demand, the Government’s withheld subsidy and any shortage a future physical count might reveal.
The record is thin on money. What are the risks that could change how we read STC, and what does it have going for it?
10. What could go wrong, ranked, and what to watch
These are the risks for STC specifically, ranked by how much each could change the picture, with the evidence of exposure and what would change our view. The levels are our qualitative assessment.
- Thin margin, heavy interest: HIGH. Net margin was 0.61%, 0.31% and 0.67% in three audited years and interest took 83.3%, 88.7% and 81.5% of operating profit; interest cover was 1.13 to 1.23 times. A rise of one percentage point on year-end borrowings of Rs 247.07 crore costs about Rs 2.5 crore, 39% of the last audited profit (our arithmetic). What would change our view: Interest cover, year-end borrowings, and whether profit survives without other income. A year with interest cover below 1.0 would change it.
- Profit quality: other income: HIGH. Provisional profit doubled to Rs 13.70 crore while gross profit fell Rs 16.91 crore; Rs 24.56 crore of other income exceeded profit before tax (Rs 22.26 crore). Rs 22.25 crore was booked by the half-year and is not itemised. What would change our view: An itemised note in the audited statements, and whether other income recurs in the year to mid-July 2027.
- Dependence on one product after the monopoly: HIGH. Salt provides 98.3% of gross profit. The legal exclusivity ended in 2021, the salt margin fell from 33.0% to 26.9% in a year, and the company still says it is the sole supplier. What would change our view: Private importers’ volumes, a salt price war, or a segment margin that holds above 25%.
- Group balances and non-consolidation: HIGH. Rs 165.34 crore is advanced to subsidiary and associate companies (the note’s label), equal to 101.5% of equity, with an allowance of Rs 8.5 crore. The auditor qualifies the accounts because those companies are not consolidated. The notes give no terms or interest. What would change our view: Consolidated accounts, repayment, or a disclosed interest charge; a larger allowance would be the first sign of impairment.
- Audit qualification: HIGH. Qualified for two years running on loss allowances on receivables (about Rs 19.6 crore on gross receivables of Rs 114.15 crore), non-consolidation, unactuarial retirement liabilities (Rs 36.65 crore provided) and investments at cost rather than fair value. What would change our view: An unmodified opinion, or an actuarial valuation and consolidation in the next annual report.
- Working capital and payables: MEDIUM. Trade payables of Rs 834.93 crore against cash of Rs 326.92 crore. Operating cash flow was minus Rs 162.03 crore one year and plus Rs 528.88 crore the next; net debt swung from Rs 400.62 crore to net cash of Rs 81.14 crore. What would change our view: The next audited year-end: payables below Rs 500 crore with borrowings back up would show the 2025 balance sheet was a timing peak.
- Dependence on the Government: MEDIUM. Two Government-linked board seats are vacant; Rs 5.04 crore of approved dividends and Rs 22.48 crore of subsidy wait on Government decisions, some for ten years; fertiliser and sugar volumes depend on policy. What would change our view: Appointments to the vacant seats, release of the dividends, or settlement of the 2015 subsidy.
- Inventory control: MEDIUM. Inventories of Rs 428 crore are the key audit matter; a Rs 3 lakh fine in October 2026 for not producing a sugar stock ledger; a 2019 prosecution for irregular sale of fertiliser at one office; expired fertiliser found at a depot in 2024. None of these is a finding of loss; the pattern is our interpretation. What would change our view: Physical-count results in the next audit report and any order or inspection finding that reports a shortage.
- Tax and litigation: LOW. A Rs 16.44 crore tax demand (10.1% of equity, 2.6 times the last audited profit) under review, Rs 11.79 crore not provided; 28 rows on the company’s own litigation schedule (grouped in our register as L07 to L11), most without a stated amount. What would change our view: The Inland Revenue Department’s review decisions and an itemised litigation schedule.
The strengths are on the map in section 6: a reach that few Nepali companies match, salt earning a 26.9% gross margin, a state channel for fertiliser and sugar, land and depots, and a balance sheet that at one date held net cash. They are real. They are also the same things that make the risks above hard to see from the profit line.
- Ask which line earns the money, not which line sells the most. Salt is 41% of STC’s sales and 98% of its gross profit; fertiliser, gas and everything else are 59% of sales and earn almost nothing. Revenue growth in those lines says little about earnings.1
- Interest is the second owner of a trading company. In three audited years interest took 81.5% to 88.7% of operating profit, and shareholders kept Rs 4 to 6 crore. Read the interest line before the profit line.1,2
- A year-end balance sheet is a photograph. Net debt of Rs 400.62 crore in July 2024 became net cash of Rs 81.14 crore in July 2025 because payables rose Rs 570 crore. Cash that depends on when suppliers are paid is not surplus.1,2
- Unconsolidated is not unimportant. STC’s statements leave out the subsidiaries and associates to which it has advanced Rs 165.34 crore, 101.5% of equity. The auditor says so, and a reader who skips the audit report misses it.1
- When profit doubles and gross profit falls, read the other-income note. The provisional profit rose Rs 12.87 crore while gross profit fell Rs 16.91 crore and other income rose Rs 16.82 crore. The statement does not say what the income was.4,1
What does a shareholder own, and what does the evidence not tell us?
11. What a holder of STC owns
A share of STC is one vote and a claim on about Rs 163 crore of equity, 66.1% of it conditional reserves. On the exchange’s figures, the price of Rs 5,591 compares with a book value of Rs 509.54 a share, and with provisional earnings of Rs 39.01 a share, 143 times; on 3,511,850.7 shares that is a market value of about Rs 1,963.5 crore.14
The cash a shareholder can expect is gated. No cash dividend was paid in the year to mid-July 2025. Rs 5.04 crore approved for three earlier years awaits Government approval; the dividend for the year to mid-July 2025 is 9.5% in bonus shares and 0.5% in cash, the cash being there to cover tax on the bonus.1,3 Bonus shares raise the number of shares: earnings per share in one year is not comparable with the next.
The things that would most change a holder’s position are not in the profit line: the release of the Government’s approvals, the filling of the two board seats, consolidated accounts or an actuarial valuation, an itemised note on the Rs 24.56 crore of other income, and what the Rs 165.34 crore of group balances turns out to be.
Valuation is a separate question. We published one on 14 October 2026, “What Rs 5,510 assumes”, which sets out the cash-flow cases and the price they imply.42 This file adds what that analysis does not cover: the auditor’s qualification, the group balances in detail and the full legal register. It also corrects one figure; see section 13.
What does the evidence, taken together, support?
12. What the evidence supports, and what would change our mind
Before the numbers we set out four readings of STC and what would tell them apart. Here is how each stands.
| Reading of STC | What supports it | What contradicts it | Our view |
|---|
| A protected franchise with steady earnings | Salt earns 98.3% of gross profit, a 26.9% margin, and sales rose 17.3% in the year after. | The designation ended in 2021; the salt margin fell from 33.0% to 26.9%; gross profit has not grown while revenue swung. | Partly true: salt earns steadily, but the protection is gone and the evidence on competition is thin. |
| A trader financed by suppliers and banks | Net margin below 1%, interest 81.5% of operating profit, payables of Rs 834.93 crore, operating cash flow from minus Rs 162.03 crore to plus Rs 528.88 crore. | Net cash at the last audited year-end (Rs 81.14 crore) is the one datum that points the other way, and it comes from the payables. | Best supported. |
| A holding company with value outside the accounts | Seven subsidiaries and six associates at cost of Rs 57.02 crore; Rs 165.34 crore advanced to them; land revalued in 2001. | No group accounts, no terms, and a qualified opinion; Rs 87.51 crore of the balances is with companies that sell STC little or nothing. | Not established and not testable until group accounts exist. |
| A governance or integrity problem | Two qualified opinions, two vacant board seats, an inventory-records theme (fine, 2019 case, depot finding, key audit matter), accounts approved late in the year. | No court or regulator finding against the company; the matters are small, individual or unresolved; the auditor reports acceptable audit procedures on inventory. | Not supported by findings. A pattern to watch, not a conclusion. |
Each reading was tested against the filings and the press record. Sources: 1,2,4,35. The cost of the investments is the auditor’s Rs 15.87 crore plus Rs 41.15 crore.
To show scale without forecasting, the table below applies simple changes to the audited base. It is not a valuation and gives no probabilities.
| If, on the audited year to mid-July 2025 as the base | Effect on profit before tax, Rs crore | As % of profit before tax (Rs 9.40 crore) |
|---|
| Interest rates rise one percentage point on year-end borrowings of Rs 247.07 crore | −2.47 | 26% |
| Salt gross margin falls one point on Rs 386.14 crore of salt sales | −3.86 | 41% |
| Each 10% of the Rs 165.34 crore advanced to subsidiaries and associates is not recovered (before the Rs 8.5 crore allowance already held) | −16.53 | 176% |
| The Rs 11.79 crore of the tax demand that is not provided is lost in full | −11.79 | 125% |
| Provisional other income (Rs 24.56 crore) falls back to the audited year’s level (Rs 7.74 crore); base is the provisional profit before tax of Rs 22.26 crore | −16.82 | 76% of Rs 22.26 crore, leaving Rs 5.44 crore |
Our arithmetic on the printed lines, to show scale, not a forecast. The effects are not additive, ignore tax relief and assume nothing about probability. Sources: 1,4.
Our view. STC is a trader financed by its suppliers and its banks, with one product that earns steadily and a group of companies it has lent to on undisclosed terms. Its audited profit is small and well explained; its provisional profit is not yet. The record gives no reason to think the company has been dishonest, and no reason to think its inventory records are beyond question.
What would change our mind. (1) An itemised note showing the Rs 24.56 crore is recurring operating income would soften the profit-quality concern. (2) Consolidated accounts, or repayment of the group balances, would answer the second qualification ground. (3) A private importer’s volumes, or a salt margin that holds above 25%, would answer the dependence risk. (4) An unmodified opinion would close the audit risk. (5) A court or regulator finding against the company in any registered matter, or a physical count that shows a shortage, would reopen the governance reading.
How do we know the numbers are right, and where do the sources disagree?
13. How we checked, and where sources differ
Primary documents carry the numbers: the 58th and 59th annual reports (statements, notes, the auditor’s reports and the directors’ reports), the minute of the 59th annual meeting, and the four quarterly reports for the year to mid-July 2026. The annual reports’ statements are in English; the directors’ reports and the minutes are in Nepali, read in the original; the auditor’s reports and the quarterly statements are scans, read from the page images. Court orders came from a legal database and were read in full. Press, the company’s own pages and one portal are secondary sources, labelled by reliability on the register below.
We recomputed from the sources every ratio on this page: shares of sales and gross profit, interest as a share of operating profit before interest (profit before tax plus finance cost), days of cost of sales (average balances, cost of sales being cost of goods plus trading expenses), net working capital (inventories plus trade receivables plus the Government receivable, less trade payables), and the share of equity that is conditional. Nepali (BS) dates were converted to calendar dates and checked against the company’s own conversions. Fiscal years end in mid-July and are written that way throughout.
| Claim | Figure | Period | Sources | Status | Note |
|---|
| Net profit after tax | Rs 6.32 crore (Rs 63,248,428) | Year to mid-July 2025 | 1 | Verified | Audited, qualified opinion; statement of profit or loss and the equity statement agree. |
| Revenue and gross profit | Rs 938.18 crore and Rs 105.55 crore | Year to mid-July 2025 | 1 | Verified | Audited. Revenue and gross profit also tie to the segment note. |
| Salt share of gross profit | 98.3% (Rs 103.78 crore of Rs 105.55 crore) | Year to mid-July 2025 | 1 | Partially verified | Segment note figures are printed; the shares are our arithmetic. Segments are before staff, administration and interest. |
| Interest share of operating profit | 81.5% (Rs 41.45 crore of Rs 50.84 crore) | Year to mid-July 2025 | 1 | Partially verified | Finance cost is printed; operating profit before interest is profit before tax plus finance cost, our calculation. |
| Operating cash flow | Rs 528.88 crore | Year to mid-July 2025 | 1 | Verified | Cash-flow statement; the combined line for trade payables, other liabilities and provisions is Rs 575.93 crore of it (trade payables alone rose Rs 570.37 crore). |
| Stock in transit | Rs 214.47 crore of Rs 428.43 crore of inventories | July 2025 | 1 | Verified | Auditor’s emphasis of matter: all of it received by the date the accounts were approved. |
| Balances owed by subsidiaries and associates | Rs 165.34 crore gross; allowance Rs 8.5 crore | July 2025 | 1 | Verified | Note 7 and the related-party note agree to within Rs 0.64 lakh; the terms are not disclosed. |
| Auditor’s opinion | Qualified on four grounds | Years to mid-July 2024 and 2025 | 1,2 | Verified | Basis paragraphs read from the page image of the auditor’s report. |
| Cash dividends approved but unpaid | Rs 3.20, 1.10 and 0.74 crore (Rs 5.04 crore) | Declared for the years to mid-July 2020, 2022 and 2024 | 1 | Verified | Auditor’s emphasis of matter and note 15.3; Government approval under section 182(2) pending. |
| Key audit matter | Inventories of Rs 428 crore: difficulty in physical counting; management judgement in valuation | Year to mid-July 2025 | 1 | Verified | The link we draw to the 2026 stock-ledger fine is our interpretation, not the auditor’s. |
| Shareholding | Government 11.59%; Food Management and Trading Company 9.66% | July 2025 | 1 | Verified | Note 14.3. Note A prints 9.67% for the second holder: one hundredth of a point. |
| The other 50.77% of the shares | Not published | Today | 1 | Not available | The eleven holders above 1% are named in the annual report; holdings below 1% are not. |
| Date of registration | 12 September 1963 (27 Bhadra 2020 BS) or October to November 1963 (“2020/07”) | 1963 | 1,3,29 | Disputed | The directors’ report and one news report say 27 Bhadra; the 2026 meeting minute gives the seventh month. We use the first. |
| “Sole supplier of salt within Nepal” | Company’s note; the monopoly ended by budget in 2021 | Notes to the audited accounts, signed February 2026 | 1,35,36 | Disputed | The note is not audited as a statement of market fact; no private importer’s volumes were found; the legal exclusivity ended in 2021. |
| Sole importer of iodised salt since 1963 | Under the Export and Import (Control) Act 1957 | 1963 to 2021 | 35 | Partially verified | One careful newspaper report; the Act’s text was not read. |
| Supreme Court, 5 April 2005 | Writs of eight private firms quashed | 2005 | 37 | Partially verified | One newspaper report; the judgment was not found. |
| Sugar-stock fine | Rs 3 lakh under the Consumer Protection Act 2075, section 38 clause (e) and 39(1)(b) | 1 October 2026 | 15,16,17,18,19,13 | Verified | Six outlets, one account (the department’s). No statement from STC. Concealment is not established. |
| Case against an assistant manager | Charge sheet at the Special Court, 2 July 2026 | 2026 | 20 | Partially verified | One outlet; the CIAA’s release and the court record were not found. A case against an individual, not the company. |
| Calcutta High Court suit | 126 tonnes short; USD 102,173.40 claimed; settled and arrest vacated 24 March 2026 | March 2026 | 11,12 | Verified | Two court orders. The order records a security figure USD 1 lower than the claim; settlement terms are not public. |
| Outcome of the 2012 sugar complaint | None found | 2012 to 2026 | 23,24 | Not available | Searched in English and Nepali; no finding against anyone was found. |
| 2019 charge sheet, Biratnagar office | Rs 19.07 lakh of fertiliser; Supreme Court case 079-CR-1067 | 2019 to February 2026 | 22,1 | Verified | A news report of 2019 and note 35.3 of the annual report agree on the amount and the case. |
| Tax demand, Large Taxpayers’ Office | Rs 16.44 crore; Rs 4.65 crore deposited | Years to mid-July 2016 to 2021 | 1 | Verified | Note 35.2; contingent, Rs 11.79 crore not provided. |
| Fertiliser subsidy withheld | Rs 22.48 crore since 15 December 2015 | July 2025 | 1 | Verified | Note 13: decision of the Subsidy Distribution Management Committee. |
| Fertiliser imported for STC’s 30% share | 141,843.5 tonnes (urea 94,044.7; DAP 42,724.2; potash 5,074.6) | Year to mid-July 2025 | 1 | Verified | Directors’ report, read in the original Nepali. The stock table in note 13 shows 77,150 tonnes purchased and 106,328 tonnes sold in the year: not reconciled. |
| Fertiliser sales | Rs 282.28 crore (segment note) against Rs 331.11 crore (“sales value” in note 13) | Year to mid-July 2025 | 1 | Disputed | Different measures in the same report. Our earlier valuation used the second; see section 13. |
| Allegation of overpricing in 2023 fertiliser tenders | Rs 246 crore | March to April 2023 | 26 | Unverified | One outlet, citing a competing state company; no proceeding or finding was found. |
| Provisional profit | Rs 13.70 crore; revenue Rs 1,222.57 crore | Year to mid-July 2026 | 4 | Partially verified | Unaudited scan; the dark current-year column was checked against the nine-month statement and the exchange’s headline profit. |
| Other income in the provisional year | Rs 24.56 crore; Rs 22.25 crore by the half-year | Year to mid-July 2026 | 4,6 | Partially verified | The half-year page is clear; the year figure is read from the dark column. No itemisation published. |
| Vacant Government and Food Management seats | Joint Secretary retired; company’s chief executive resigned | By 12 June 2026 | 3 | Partially verified | Management’s statements at the meeting, in the minutes; no filing records the appointments. |
| Price and market value | Rs 5,591; about Rs 1,963.5 crore | 16 to 17 October 2026 | 14 | Partially verified | A portal, one source, changing daily; market value is our product of price and the 3,511,850.7 shares after the 2026 bonus. |
| Network and staff | 93 offices (22 plus 71 liaison); 6 packing units; about 500 staff | Current | 8 | Unverified | The company’s own description. |
| Salt volumes and market share | Not disclosed | Any year | 1,4 | Not available | The annual report gives salt sales in rupees only; the market-size figure we found is a 2021 official’s “around 200,000 tonnes”. |
| Dividend lines in the equity and cash-flow statements | Rs 3.20 crore headed “Dividend paid” though no cash was paid; the unpaid-dividend liability rose by the same amount | Year to mid-July 2025 | 1 | Partially verified | Labelling inconsistency reconciled from the liability note; the effect on operating cash flow is not shown. |
| Terms of transactions with group companies | Not disclosed | Any year | 1 | Not available | No prices, interest rates or repayment schedules in the notes we read. |
| Question | One reading | Another reading | How we treat it |
|---|
| Date of registration | Directors’ report and a news report: 27 Bhadra 2020 BS (12 September 1963). | Minute of the 59th meeting: “2020/07”, the seventh month. | We use 27 Bhadra. Unresolved. |
| Government-linked share | Annual report: 21.25% (11.59% and 9.66%); company site: 79:21 private to public. | A 2021 report says the Government holds 22%; a Nepali encyclopedia page reverses the split. | We use the annual report. |
| Food Management holding | 9.66% in the shareholders’ table (note 14.3). | 9.67% in the general-information note. | Immaterial; note 14.3 used. |
| Size of the salt market | About 200,000 tonnes and Rs 250 crore a year (Kathmandu Post, 2021). | STC’s own salt sales were Rs 329.18 crore and Rs 386.14 crore in the years to mid-July 2024 and 2025; one outlet printed a volume of 25 lakh tonnes. | We draw no market share. The 25 lakh figure looks like a unit slip. |
| Sole supplier | The audited notes: STC “is the sole supplier of salt within Nepal”. | The 2021 budget made salt competitive; the Post reported the monopoly over. | The note is the company’s statement; the legal exclusivity ended in 2021; actual competition is not shown. |
| Does salt make money? | A 2023 statement attributed to the chief executive: salt is traded at a loss. | The audited segment note: gross margin 33.0% (year to mid-July 2024) and 26.9% (year to mid-July 2025). | Not reconciled. Segment gross profit is before staff, administration and interest, which are not allocated to segments. |
| Fertiliser sales | Segment note: Rs 282.28 crore. | Note 13: “sales value” Rs 331.11 crore at fixed rates for the claim quantity. | Not reconciled; we use the segment note for sales. |
| The sugar-stock fine | Headline in one outlet: sugar stock “hidden”. | The department’s account in the same report: no stock ledger was produced, so stock could not be verified. | We use the department’s account; concealment is not established. |
| The Calcutta security | The plaint claims USD 102,173.40. | The order records security of USD 102,172.40. | One dollar; both quoted. |
Sources: 1,3,8,29,33,35,36,41,11,15,16.
A correction to our own earlier work. Our valuation of 14 October 2026 describes STC as selling subsidised fertiliser to farmers “for Rs 331 crore”. Note 13 prints Rs 331.11 crore as the “sales value” at fixed Government rates of the 141,844-tonne claim quantity, while the segment note reports fertiliser sales of Rs 282.28 crore and the stock table in the same note shows 106,328 tonnes sold. We use the segment note here and do not reconcile the three. That analysis also does not discuss the auditor’s qualified opinion, which this file does.1,42
| What we could not read or find | What we did | Status |
|---|
| Register of shareholders below 1% | Read note 14.3 and the general-information note; the register is not published. | Not available |
| Salt tonnes sold, market share, customer concentration | Read the directors’ reports, notes and quarterly reports; searched English and Nepali news, 2021 to 2026. | Not available |
| Terms of group advances | Read notes 7 and 31; no rates, terms or repayment dates. | Not available |
| Itemised other income, year to mid-July 2026 | Read the half-year, nine-month and year-end pages. | Not available |
| Year-end 2026 balance sheet and cash flow | Not read for this file. | Not used |
| Auditor’s management letter | Referred to in the audit report; not published. | Not available |
| Minute of the 58th annual meeting | The Nepali file could not be read reliably. | Not relied on |
| Outcome of the 2012 sugar complaint, the 2023 tender allegation, the 2011 committee directive and the 2024 Salyan finding | Searched English and Nepali news and court databases up to 17 October 2026. | Not found |
| The CIAA’s own release and the court record in the assistant manager’s case | Searched; only press reports found. | Not found |
| Terms of the Calcutta settlement; the 2005 Supreme Court judgment; the text of the 1957 Act; the tripartite agreement | Not public or not found. | Not found |
| How much of the thin margin is the cost of Government-directed pricing and public-service duties | The directors’ report says STC sells some goods below cost on Government direction; no amount is given. | Not available |
| Company Registrar and exchange announcements | Not opened; the company’s own site and one portal were used. | Not accessed |
Whatever depends on these items is marked “not disclosed in the sources we read” on the page.
| Term | What it means on this page |
|---|
| Interest cover | Operating profit before interest divided by finance cost. At 1.23 times, a fall of about 18% in operating profit would leave nothing for shareholders. |
| Operating profit before interest | Profit before tax plus finance cost, our calculation. It includes other income. |
| Gross profit (STC’s definition) | Sales less cost of goods and trading expenses. It is before staff, administration and interest. |
| Working capital | Inventories plus trade receivables plus the Government receivable, less trade payables. A fall means suppliers are financing more of the business. |
| Separate and consolidated statements | Separate statements show the company alone, with subsidiaries at cost. Consolidated statements add the subsidiaries’ sales, profits and debts line by line. |
| Qualified opinion | The auditor says the statements are fair except for stated matters. It is not a finding of fraud. |
| Emphasis of matter and key audit matter | Points the auditor draws attention to or spent most effort on, without modifying the opinion. |
| Expected credit loss allowance | A provision against receivables that may not be collected, estimated over their lifetime. |
| Other income | Interest, rent, dividends and miscellaneous items outside trading; Rs 7.74 crore in the audited year. |
| Provisional (unaudited) | Figures posted to the exchange before the audit; the audited year to mid-July 2025 was signed almost seven months after year-end. |
Plain definitions for the terms used above; sources as cited in the sections where they appear.
| Date | What changed | Why |
|---|
| 17 October 2026 | First published. | |
| 18 October 2026 | The Rs 575.93 crore line is now described as the combined change in trade payables, other liabilities and provisions; trade payables alone (Rs 570.37 crore) are shown separately. | The audited cash-flow statement labels the line that way; the first version called it payables only. |
| 18 October 2026 | The legal summary now states the Rs 3 lakh administrative fine alongside “no court finding”. | The first version said none of the 15 matters was a finding against the company. |
| 18 October 2026 | The register of 15 is reconciled to the company’s litigation schedule of 28 rows. | The two counts measured different things and the page did not say so. |
| 18 October 2026 | “Off the books” was replaced by “not consolidated”; a note on the dividend lines in the equity and cash-flow statements was added. | The advances are recorded; the group’s own accounts are not consolidated. |
Corrections to this page are listed here with the date they were made.
14. What this establishes, and what it does not
- STC earned Rs 6.32 crore on Rs 938.18 crore of sales in the audited year to mid-July 2025, and the opinion on those accounts is qualified for the second year.
- Salt is 41% of sales and 98% of gross profit; every other line together earns almost nothing, and the legal exclusivity ended in 2021.
- Interest took 81.5% of operating profit; cash flow of Rs 528.88 crore reflects supplier and other liabilities, not earnings.
- Rs 165.34 crore is advanced to subsidiaries and associates that STC does not consolidate, 101.5% of equity, on undisclosed terms.
- The provisional profit of Rs 13.70 crore is other income of Rs 24.56 crore that the statements do not itemise; we found no court finding against the company in 15 registered legal matters, and one administrative fine of Rs 3 lakh.
One product. One lender. One group unconsolidated.
When a company’s profit comes from one product and its balance sheet from its suppliers’ patience, which year are you valuing: the one it earned, or the one it was paid?
Which Nepali company with a state or group structure behind it deserves the next KYC?
This research establishes the shape of STC’s earnings (one product, interest as the second owner), the size and unusual timing of its cash flow, the group balances in the notes, the auditor’s four grounds and the legal record up to 17 October 2026. It does not establish who holds the other 50.77% of the shares, what the group companies owe and on what terms, what the Rs 24.56 crore of other income was, how many tonnes of salt STC sells or what share of the market that is, or how the 2012, 2023 and 2024 matters ended. It does not value the company.
The question that deserves the next episode is the cash one. How much of Rs 165.34 crore of group balances comes back, and what did the Rs 24.56 crore of other income consist of? The audited year to mid-July 2026, with its consolidated or still separate statements, will answer both, and we will update this file when it is published. A further question for a later update is how much of the thin margin is the cost of Government-directed pricing and public-service duties, which the filings do not quantify.
Sources & further reading
Primary sources
- 59th Annual Report 2081/82: directors’ report, audited statements and notes, auditor’s report. Salt Trading Corporation Limited, 3 Jun 2026.
- 58th Annual Report 2080/81: directors’ report, audited statements and notes, auditor’s report. Salt Trading Corporation Limited, 12 Oct 2025.
- Minutes of the 59th annual general meeting. Salt Trading Corporation Limited, 25 Aug 2026.
- Fourth quarterly report 2082/83 (Schedule 14), provisional statements. Salt Trading Corporation Limited, 14 Aug 2026.
- Third quarterly report 2082/83, provisional statements. Salt Trading Corporation Limited, 18 May 2026.
- Second quarterly report 2082/83, provisional statements. Salt Trading Corporation Limited, 20 Feb 2026.
- First quarterly report 2082/83, Schedule 14. Salt Trading Corporation Limited, 17 Nov 2025.
- Company website: About us. Salt Trading Corporation Limited, accessed 17 Oct 2026.
- Company website: Board of directors and management team. Salt Trading Corporation Limited, accessed 17 Oct 2026.
- Company website: ventures (Metro Kathmandu Gas, Khadya Udhyog, Nepal Vanaspati Ghee, Morang Sugar Mills, Gorakhkali Rubber, Future Works and others). Salt Trading Corporation Limited, accessed 17 Oct 2026.
- Salt Trading Corporation Limited v. The Owners and Parties Interested in the Vessel MV Magma Tenacity (IMO 9967689), AS-COM/3/2026, order of 20 March 2026. High Court at Calcutta (Admiralty, Commercial Division), 20 Mar 2026.
- Same suit, order of 24 March 2026. High Court at Calcutta (Admiralty, Commercial Division), 24 Mar 2026.
- Consumer Protection Act, 2075 (2018), English translation (Asian Development Bank legal-resource copy). Government of Nepal, 18 Sep 2018.
Secondary sources
- Salt Trading Corporation (STC): company page. Merolagani, accessed 17 Oct 2026.
- Sugar stock not produced: Salt Trading Corporation fined Rs 3 lakh (Nepali-language report). Onlinekhabar (Nepali), 1 Oct 2026.
- STC fined Rs 300,000 for failing to maintain stock transparency. myRepublica, 1 Oct 2026.
- Department of Commerce fines STC Rs 3 lakh for unfair trade practices. B360 Nepal, 1 Oct 2026.
- Salt Trading Corporation fined Rs 300 thousands. Radio Nepal (RSS), 1 Oct 2026.
- Salt Trading Corporation fined Rs 3 lakh (two Nepali-language reports of the same departmental letter). Khabarhub; Sankalpa Khabar (Nepali), 1 Oct 2026.
- Case filed against an assistant manager of Salt Trading over alleged fake credentials. Lagani News, 2 Jul 2026.
- Eight sued for submitting fake credentials for govt jobs. The Himalayan Times, 23 Jul 2023.
- Charge sheet against the head and two staff of STC’s Biratnagar zonal office (Nepali-language report). Prasashan (Nepali), 20 Nov 2019.
- ‘STC involved in black marketing’; ‘Complaints filed against STC officials’. myRepublica, 10 Sep 2012; 10 Oct 2012.
- Sugar Price Scam: Consumer forum asks CIAA to probe irregularity in Salt Trading. ShareSansar, 2012 (page carries a 2016 site date).
- STC told to furnish salt trade agreement. myRepublica, 16 Jan 2011.
- Suspected embezzlement of Rs 246 crore in chemical fertiliser procurement (headline converted to crore). Himal Press, 20 Apr 2023.
- Expired fertiliser found at STC’s Salyan depot (Nepali-language report). Sky News Nepal (Nepali), 13 Jan 2024.
- Consumers bear brunt of sugar price hike. The Rising Nepal, 8 Sep 2026.
- Salt Trading keeps food supply steady in disaster and disruption (Nepali-language reports). Samayapost; Business Pati (Nepali), 12 Sep 2026; 3 Sep 2026.
- Only 39,000 tonnes of fertiliser in stock with Salt Trading (Nepali-language reports). Karobar Daily; TV Annapurna (Nepali), 27 May 2026.
- Farmers Face Severe Chemical Fertilizer Shortage Across Nepal. Hamro Patro (Ratopati), 26 Jul 2026.
- Global fertiliser crisis may hit Nepal hard this plantation season. Asia News Network (The Kathmandu Post), 2026 (date not shown).
- Salt Trading Corporation trades salt at a loss (Nepali-language report). Arthakarobar (Nepali), 23 Jun 2023.
- The journey of Salt Trading in Nepal (Hindi-language feature). Himalini (Hindi), 26 Oct 2024.
- Salt Trading Corporation Limited (Nepali-language encyclopedia page). Nepali Wikipedia, 23 Jan 2019 (edited 11 Apr 2023).
- What Rs 5,510 assumes: STC’s profit doubled while gross profit fell (valuation). The Finance Aftermath, 14 Oct 2026.
Historical sources
- Salt Trading Corporation’s monopoly comes to an end. The Kathmandu Post, 9 Jun 2021.
- Govt letting private sector trade salt to serve a tycoon who is also PM’s advisor. Onlinekhabar English, 9 Jun 2021.
- SC upholds STL monopoly to import, distribute salt. The Himalayan Times, 5 Apr 2005.
- Iodised salt (feature on the salt iodisation programme). Nepali Times, 10 Aug 2001.
- No buyers for sugar distributed by state-owned firms. myRepublica, 26 Aug 2009.
- STC dismisses salt shortage rumours. The Kathmandu Post, 13 Nov 2016.
- The salt of the earth. Nepali Times, 9 Apr 2022.
Checked 17 October 2026. Educational research, not investment advice.