OVERVIEW OF INDIAN ECONOMY
The Indian economy has moved on after its encounter with the pandemic, staging a full
recovery and positioning itself to ascend to the pre-pandemic growth path in 2022-23.
There were some signs of moderation in the second half of FY 2022-23, however, growth was
underpinned by strong investment activity bolstered by the governments capex push and
buoyant private consumption, particularly among higher income earners. Inflation remained
high during the financial year, averaging around 6.7 percent in FY 2022-23 and India has
also faced the challenge of reining in inflation that the European strife accentuated.
Measures taken by the government and RBI, along with the easing of global commodity
prices, have finally managed to bring retail inflation below the RBI upper tolerance
target in November
2022. However, the challenge of the depreciating rupee, although better performing than
most other currencies, persists with the likelihood of further increase in policy rates by
the US Fed. The widening of the CAD may also continue as global commodity prices remain
elevated and the growth momentum of the Indian economy remains strong.
The E-Commerce sector also witnessed a renewed push and a sharp increase in penetration
in the aftermath of the pandemic. The Governments push to boost the digital economy,
growing internet penetration, innovation in mobile technologies, and increased adoption of
digital payments further accelerated the adoption and growth of e-commerce. E-commerce
platforms has not only empowered small businesses by removing geographical barriers and
providing a large customer base but also allowed them to deal directly with manufacturers
and suppliers, thus reducing the cost of procurement.
A landmark achievement in telecommunications in India was the launch of 5G services. 5G
could impact consumers directly through higher data transfer speeds and lower latency and
are being increasingly used in education, health, worker safety, smart agriculture etc.
The Indian E-commerce market is expected to grow to approx. US$ 100 billion by 2025.
Through its Digital India campaign, the Government of India is aiming to create a
trillion-dollar online economy by 2025. The year 2022-23 has shown that the importance of
B2B e-commerce has increased more than ever. This is directly entailed from the fact that
India has become a hotbed for e-commerce activities with business increasingly relyingon
B2Bfirms/enablers to avail their products pan-India. Growth in B2B e-commerce has an
impact on the overall economy as it reduces inefficiencies and ensure better quality and
pricingfor everyone presentinthe value chain.
Initiatives taken by the Government for the promotion of e- Commerce, including the
Digital India program, Unified Payment Interface (UPI), Make in India, Start-up India
etc., have been major contributory factors to the growth of E- commerce in recent years.
Various initiatives have also been taken to provide an opportunity to small retailers,
manufacturers, and Self-Help Groups for greater outreach. One District - One Product
(ODOP) initiative has been facilitating the onboarding of sellers of identified products
on e-Commerce platforms to provide greater visibility for small businesses from the rural
sector. Some of the recently introduced digital initiatives, such as the Open Network for
Digital Commerce (ONDC) and Account Aggregator framework, will open up further avenues for
e-commerce market access and strengthen the expected economic growth in the medium term.
Indias GDP growth is expected to remain robust in FY 2023-24. GDP forecast for FY
2023-24 to be in the range of 6- 6.8% and India has emerged as the fastest-growing major
economy i n the world.
GLOBAL SCENARIO
The global economy has been hit by at least three shocks since 2020. It all started
with the pandemic-induced contraction of the global output, followed by the Russian-
Ukraine conflict leading to a worldwide surge in inflation. Then, the central banks across
economies led by the Federal Reserve responded with synchronised policy rate hikes to curb
inflation. The rate hike by the US Fed drove capital into the US markets causing the US
Dollar to appreciate against most currencies.
Rising inflation and monetary tightening led to a slowdown in global output beginning
in the second half of 2022. The consequent dampening of the global economic outlook, also
compounded by expectations of a further increase in borrowing costs.
However, strong employment data and sharply lower headline inflation for December have
raised hopes of the US economy achieving a softer landing. Similarly, in Europe, warmer
winter weather has neutralised the risk of a near-term energy crisis. Lately, however,
banks have reported much weaker earnings growth, and technology companies have begun to
announce layoffs in America. Therefore, on balance, downside risk to the global economic
outlook dominates.
The likely slowdown in growth in advanced economies may be partially offset by signs of
revival in Chinas growth. Further, the commodity prices have moderated recently,
resulting in declining food and energy prices in several East Asia and Pacific countries.
COMPANYS BUSINESS
MSTC has two core business segments namely e-Commerce & Trading. MSTC plays a very
important role as a service provider in e-Commerce and is a market leader in this sector.
It has the distinction of serving majority of Central / State Govt. Departments, PSUs and
a few leading Private Institutions for providing transparent, fair & seamless e-
Commerce services to its clients.
A. e-Commerce Business
MSTC is the major standalone e-Commerce service provider in the country focussing on
Price Discovery, e-Bidding and Transparent PublicSale & Procurement Processes. MSTC
had introduced e-Commerce in various commodities such as Sale of Scrap & Surplus
Stores, Plants and Machinery, Coal, Iron ore & other Minerals, Agro/Forest produce,
Properties, Fly- Ash, etc. in India. In addition to this, MSTC has also commenced
e-Auction of Land, Buildings, Apartments, Bank NPAs, assets under DRT, etc.
In recent years, UDAN (Regional Connectivity Scheme), Spectrum e-Auctions, Coal and
Coal Mine auctions, e-Auction of Sand Mining blocks in UP, e-Auction of RCC/ERCC contracts
in Rajasthan for minor Mineral blocks, e-Auction of Long-term property Leases,
Export-Import (EXIM Management) portals of IOCL and ONGC Group (through MRPL), Liquor shop
license in Rajasthan, NPAs of Banks and e-Procurement of Power (DEEP) have been the
signature events.
Development of dedicated portal(s) for e-Auction of Coal and Mineral blocks (both major
& minor) has been the reflection of Governments faith in MSTCs e-Commerce services.
Selling Agency Business
Fora long period of time, MSTC has been acting as the Selling Agent for a large number
of Government departments / Ministries / State Governments/ PSUs for disposal of Scrap,
Surplus Stores, obsolete Plant & Machinery, e-Waste and other hazardous items, etc.
MSTCs streamlined, automated, transparent and fair processes enable the sellers to
achieve highest revenue generation from such disposal activities. MSTC offers end to end
services from preparation of the auction catalogue, management of e-Bid events, e-Payment
Management, to the issuance of delivery orderwith minimum human interactions.
Noting MSTCs prowess in the Govt Sector, several major industries in private sector
(such as Bharti Group, GMR Group, L&T Group, Tata Group, Indus Towers, JSW Group, etc)
have started using MSTCs e-auction system for disposal of their scrap and surplus stores,
thereby increasing revenue generation and improving transparency and corporate governance
in their respective activities.
MoRTH has recently appointed MSTC as the nodal agency for channelising and selling of
all ELVs of the Central and State Government to Registered Vehicle Scrapping Facility
(RVSF).
E -Sales
Starting with sale of coal through e-Auction way back in 2004, MSTC has been,
continuously expanding its services to various Seller(s) developing different e-Bidding
modules to cater to the changing business requirements and needs. Besides coal, MSTC is
selling other minerals like manganese ore, iron ore, lignite, chrome ore, bauxite,
barytes, etc. and various other products like pet coke, forest produce, timber, etc. MSTC
is a nominated agency for coal blocks, all major mineral blocks and minor mineral blocks
in various states/UTs.
Apart from this, MSTC also has developed customised and unique solutions for sale of
fly ash. Properties of the Government sector and NPAs of Banks are some of the other
products for which dedicated portals have been developed.
E -Procurement
In e-procurement, MSTC provides e-Tender and e-Reverse auction services backed by
mandatory STQC certificate for quality requirements. Although, MSTC made a modest
beginning in FY 2013-14 but it has made a significant growth inthe subsequent yearand is
poised for exponential growth in future. The system complies with the guidelines framed by
STQC for quality and security checks. MSTCs current V3 solution offers industry best,
global standard e-Procurement solution with unparallel ease of use and impressive array of
features (including but not limited to Multi currency and Multi header e-Bid events,
Linked Events, QCBS events, customizable e-Tender and e-Reverse Auction components with
various modularfeatures)
E -Solutions
Over the years, MSTC has delivered certain key e-bidding packages for various
ministries of Government of India. During the last fiscal, MSTC has further strengthened
and made improvements in its various platforms for e-bidding solutions like DEEP, TBCB,
SHAKTI, eBKray portal, Spectrum Auction, etc.
MSTC has been nominated by MoRTH for developing a portal for sale of ELVs of Central/
State Govt./PSUs etc. to RVSF. The portal has already been launched.
MSTCs integration with e-Bkray Portal for Indian Banks Association (IBA) for sale of
mortgaged properties of different banks under SARFAESI Act is currently in the final
stages of Integration with DigiLocker. Once implemented this will be the first of its kind
Portal for sale of NPAs where the entire user journey will be automated and real time
based.
Few of the noteworthy E-Solutlons developed by MSTC are as follows:
Coal Mine auctions: MSTC has developed and is operating the portal for Ministry of Coal
(Gol), to auction Coal Mine for sale of coal (commercial mining) as per the Mines and
Minerals (Development and Regulation) Act 1957 as well as other related acts and
amendments. The bidding for Commercial Coal Mine auction continued during 2022-23 during
which more than 150 coal mines were offered out of which 46 were successfully allotted
during 2022-23.
EXIM Portal for Petroleum Industry: The online bidding platform for Export & Import
of petroleum products has been developed & delivered to I0CL. The EXIM portal is fully
operational and I0CL has continued to utilize the EXIM portal during the last fiscal. For
ONGC Mangalore Refinery and Petrochemicals Limited also a separate portal was developed.
MSTC also successfully carried out sale of natural gas for Hindustan Oil Exploration
Company Ltd.
e-RaKAM (e-Rashtriya Kisan Agri Mandi) Portal: MSTC Ltd. had launched a nationwide
electronic portal - e-RaKAM for trading in the agriculture produce. The online trading
platform which primarily deals in food grains, vegetables, fruits, spices and all
agriculture related commodities and connected farmers directly with consumers.
Online Draw System for selection of LPG Dealership: Online Draw System is the process
to select theapplicants out of the eligible applicants, in secured and transparent manner,
without any human intervention. In the current system, online applications are requested
from the interested candidates and then from these candidates, eligible candidates are
allowed to take part in the draw. This software is used in events to conduct online draws
and display the names of the winners on the screen. The system iseasytouseand readyfor
more complex draws. The application is developed with random number generation algorithm
for conducting on-line computerized draw of lots (Online Computerized Draw System) by
selecting only one eligible candidate at each time out of the total eligible applicants.
Shuffling occurs for the names of the applicants along with their details in random order
at the press of a button. Visualization of the shuffling process for d isplay on the
screen is there.
MSTC has successfully conducted Rajasthan Liquor Shop Licensing contract through
e-Auction mode on behalf of Rajasthan State Excise Department. The auctioning event was
conducted for 34 districts. Total no. of shops belonging to these districts which has been
auctioned stands at 7665.
MSTC has developed an application software for I0CL wherein Tender cum auctions/
independent auction can be
floated for finalization of Transporters for bulk POL (Petroleum Oil Lubricant). The
application has various sophisticated mechanism, like auto evaluation and determination of
provisional allotments based on pre fixed rules, maintaining optimum allotment to reserved
categories, etc.
DEEP portals for procurement of electricity by Distribution Companies including
Standard DEEP portal (for Short/Medium/Long term procurement of Power), Aggregated Thermal
Power, Long Term Solar power, Flexible Coal Scheme, Power Procurement from ICB Plants
during Crunch Period(s).
Transmission Service Provider (Interstate/lntrastate TBCB): Ministry of Power, Govt, of
India notified "Tariff Based Competitive Bidding Guidelines for Transmission
Service" and "Guidelines for Encouraging Competition in Development of
Transmission Projects" (Guidelines). In line with provisions of the guidelines, Bid
Process Coordinator like RECTPCL and PFCCL are conducting events, using the services of
MSTC for Interstate Transmission System (ISTS) projects. This also includes solar power
and wind power projects.
MSTC has its dedicated mobile app, developed by the in- house team. The app can be used
by all the bidders to participate in General Scrap Auctions. At the same time, it can be
used by sellers and ADMIN to perform associated functions like entry of reserve prices,
view live auctions, see auction related reports etc. In future, the app is being expanded
to cover all other functionalities and auction types that are available in the web version
of MSTC portal.
A specially designed and customized procurement portal has been developed for
establishment of FGD (Flue-gas desulfurization) plant and other projects of Corporate
Contracts Unit of NTPC at its various Sewage Treatment Plants. The procurement process
shall be through tender followed by Reverse Auction and the bidding shall be in
multicurrency.
Lot of automation and improvements have been carried out in e-commerce portal.
e-Commerce business constitutes about 99.92% (99.72% in 2021-22) of the total volume of
business of the Company during FY 2022-23. It contributed 93.40% (58.96% in 2021- 22) of
the total revenue from operations.
B. Trading Business
In trading business, which constituted 0.08% of the total volume of business during FY
2022-23 (0.28% in 2021-22), MSTC acts as a facilitator for procurement of raw material on
behalf of buyers and charge mark-up on percentage basis aga i nst a ba n k gua ra ntee as
secu rity.
This business contributed 6.60% of the total revenue from operations of the Company
during FY 2022-23 (41.04% in 2021-22).
This division is currently engaged in the business for procurement of industrial raw
materials, projects equipment etc. against Bank Guarantee (BG) to the tune of 110% from
the Customer. Customers who have sanctioned BG limits and can use the same to procure raw
materials/ commodities for their projects or for trading. In this model, MOU is signed
with the Customer after following the laid down process. Procurement is done on behalf of
the Customers backed by 110% BG opened on any Scheduled Commercial Bank. The payment is
released to the Supplier by way of LC/ RTGS in facilitator mode for domestic procurement.
The material is directly shipped to the customer thereby eliminating the need for storage
which results in saving on account of warehouse and custodian charges. MSTCs entire
exposure is covered by the BankGuaranteesubmitted by the Customer.
The trading business achieved a volume of Rs. 22,945 Lakhs out of the total volume of
business of Rs. 3,01,59,050 lakhs during F.Y 2022-23 (as against Rs. 37,935 lakhs out of
total business of Rs. 1,36,80,490 lakhs in 2021-22)
This business contributed Rs. 243 Lakhs of the total operational income of the Company
during FY 2022-23 (Rs.397 Lakhs in 2021-22).
C. Recycling
MSTC has set up Indias first authorised Collection and Dismantling centre at Greater
Noida, for scientific recycling of End-of-Life Vehicles (ELVs) and white goods through its
Joint Venture, Mahindra MSTC Recycling Private Limited (MMRPL) with Mahindra Intertrade
Ltd, wherein the ELVs are purchased for de-polluting, dismantling and converting the
metallic parts into bales in an environmentally friendly manner. MMRPL has further
operationalized Collection & Dismantling centres at Chennai, Pune, Indore, Ahmedabad,
Hyderabad and Guwahati. One more dismantling centres at Bangalore is likely to be
operationalised shortly. Total 25 Collection centres all are operational currently
including above mentioned collection & DismantlingCentres.
MMRPL intends to set up more Collection & Dismantling centres in the current
financial year. The introduction of Vehicle Scrapping Policy in 2021 has paved way for
expansion of MMRPLs business which is expected to grow in comingyears.
FUTURE OUTLOOK
MSTC is a nominated agency for allocation of coal blocks and all major mineral blocks
in the country through its customized e-Commerce portal. The minor mineral blocks
allocation is
also happening through MSTCs e-Commerce portal in the various states in the country.
The selection of Mine Developer-cum-Operator is mostly done through e- Procurement portal
of MSTC. In addition, all the major minerals including coal are being sold through
e-Auction portal of MSTC barring a couple of mines for mineral in Barbil area which is at
the confluence of Orissa, Jharkhand & West Bengal.
MSTC has onboarded startups and smaller software companies to provide specialised
solution to MSTCs new and existing clients. The huge potential in this area argues well
for further growth. MSTC envisages to create R&D funds to onboard startup for
furthering MSTCs e-commerce business interests.
Although MSTC has made inroads into forest and Agri sector in India but has to play
lead role for huge market in India through aggressive marketing strategy and rendering
seamless services.
MSTC has carved nichefor itself by developingan unique exim portal for Oil marketing
companies and in the process MSTC has developed required expertise for providing e-Retail
Software solutions to the Government and private organizations particularly the MSME. This
sector holds a great opportunity and potential for MSTC in future.
MSTC has been conducting regular auction for moveable and immovable assets as NPAs for
Government as well as private companies. But the recent move of banks for consolidation of
the sale of NPAs by a single service provider has become operational and paves way for
further expansion in sale of properties.
MSTC is casting more focus on the untapped e-Commerce business from the private sector
and in this stride MSTC has signed big ticket agreements with Reliance Industries, Indus
Tower, Tata Power, Vedanta, Jindal Power Ltd. etc. to name a few.
MSTC is exploring possibilities for entering into more areas in recyclingfield as a
step towards circular economy.
SOME OF THE MAJOR OPPORTUNITIES MSTC IS PURSUING:
The recent initiative of the Government for sale of mineral blocks, both major and
minor, through e-auction has also opened window of opportunity for MSTC and it has signed
agreement with most of the State Governments which may yield positive results to the
revenue of MSTC.
MSTC is exploring e-auction of sand mining block in other states in line with Uttar
Pradesh model.
Govt, of Rajasthan has appointed MSTC for sale of license for liquor shops in the
state. MSTC is exploring the possibility of liquor license auctioning in other states
based upon the success of such an event in Rajasthan.
MSTC has successfully conducted e-auction of coal linkages for unregulated sector such
as cement, steel, sponge iron, etc. The e-auction of coal linkage has commenced under
Shakti scheme by Ministry of Coal.
The successful portals for EXIM products for IOCL and ONGC has paved way for
development of such portal for other OMCs both public and private.
Circular Economy: MSTC is exploring new areas of business in recycling sector like
ferrous material/ Aircraft / e-Waste / Textile Recycling/ Other Hazardous Waste, etc.
Re-engineering of Auction Portal: The existing auction platform developed around a
decade ago has extensive patch works to accommodate new requirements. Steps are being
taken for complete re-engineering of the auction portal with latest technology.
Efforts towards R&D: We are in the process of framing Startup policy for onboarding
start-up companies for R&D as well as utilisingemergingtechnologies/opportunities.
MoRTH, in September 2021, notified the Motor Vehicles (Registration and Functions of
Vehicles Scrapping Facility) Rules, 2021 for setting up of authorized vehicle scrapping
centers across India with the objective to reduce pollution by scrapping End-of-Life
vehicles to improve road safety, improve fuel efficiency, reduce maintenance cost for
vehicle owners, promote circular economy, formalize the currently informal vehicle
scrappage industry and boost availability of low-cost raw materials, boost auto sector
sales and generate employment.
MSTC had been entrusted with the responsibility of conductingauctionsforsale of Central
and State Government owned vehicles. MSTC has launched an ELV portal to sell the
government ELV and in the ELV auctions only operational RVSF are allowed to participate.
MSTC has also introduced a model in the ELV Portal to bring the ELV owned by
individuals and the RVSFs in a single platform and use the existing ecosystem and sell
their ELVs and reapthe benefit of the vehicle scrappage policy of GOI.
DISCUSSION ON FINANCIAL PARAMETERS WITH RESPECT TO OPERATIONS AND PERFORMANCE
PERFORMANCE
A) Agency Business
This year the total volume of Agency Business stands at
Rs. 2,09,91,589 Lakhs, againstRs. 1,05,43,597 Lakhs in 2021- 22. Break-up for the year
2022-23 vis-a-vis 2021-22 is as follows:
| Business Segment |
Volume of Business (Rs. in Lakhs) |
|
2022-23 |
2021-22 |
| Scrap Disposal |
7,77,811 |
6,13,546 |
| e-Sale |
1,76,46,903 |
74,72,976 |
| Coal e-Auction |
12,13,258 |
11,22,960 |
| Iron ore e-Auction |
13,53,617 |
13,34,115 |
| Total(A): |
2,09,91,589 |
1,05,43,597 |
B) E- Procurement
| Business Segment |
Volume of Business (Rs. |
in Lakhs) |
|
2022-23 |
2021-22 |
| e-Procurement |
91,44,516 |
30,98,958 |
| Total(B): |
91,44,516 |
30,98,958 |
| Total (A+B): |
3,01,36,105 |
1,36,42,555 |
C) Trading
The performance of the Trading Division shows a total volume of business of Rs. 22,945
Lakhs, against Rs. 37,935 Lakhs in 2021-22. Break-up for the year 2022-23 vis-a-vis
2021-22 is as follows:
| Business Segment |
Volume of Business (Rs. in Lakhs) |
|
2022-23 |
2021-22 |
| Indigenous materials |
22,945 |
37,935 |
| Total(C): |
22,945 |
37,935 |
| Grand Total (A+B+C) |
3,01,59,050 |
1,36,80,490 |
Business Ris
| Sr. No |
Risk Category |
Risk Description |
Severity |
| 1 |
Policy Related Risk |
(a) External policies affecting e-commerce business mainly due to government policies. (b)
Internal policies made by the company. |
High |
| 2 |
Competition from Other Service providers |
Risk of Govt Service Providers providing e-Commerce Services under the ambit of Govt
Notifications; or Pvt Service providers working outside the ambit of regulatory framework. |
High |
| 3 |
Risk related to employee Workforce |
Employees are primary resource in MSTC. Therefore attrition, inadequate
succession/redundancy planning, insufficient training and low employee motivation remain
as significant business risk. |
High |
| 4 |
Reputational Risk |
As MSTCs Service Provider business is largely based on work on Nomination Basis, the
risk to Reputation by breach of trust through incidences of breach of data integrity,
confidentiality, inadequate support/response to client calls etc. |
Medium |
| 5 |
Time and Accuracy of Business Decisions taken by the Company |
Decision to enter into a new business or exiting from a business, decision regarding
valuation of service to be provided for different projects involving customized services
can make a lot of difference to the revenue and well being of the organization. |
Medium |
| 6 |
Risk Associated with Business Model |
MSTC has established itself in B2B business segment and has been continuing with the
same model for the last 20 years. With changing time, business environment and technology,
need for remodelling of business process is necessary. Besides, MSTC needs to expand in
other business verticals like recycling sector. |
Medium |
| 7 |
External Market forces and conditions |
Govt policy (both statutory and financial) and Global market scenario (through
commodity and index markets) have huge impact on MSTCs Business. Additionally, constant
innovation in e-Commerce landscape (Blockchain, Al and ML) adds risk of being redundant. |
Medium |
| 8 |
Abuse/Misuse of Operational Privileges given to Employees |
Role based access has been provided to employees to carry out day to day work. Some
employees have additional privileges to access data which, if misused, can pose threat to
business process transparency and have negative impact on the company. |
Low |
System Risk
| Sr. No |
Risk Category |
Risk Description |
Severity |
| 1 |
Cyber Security Risk |
1. Loss of sensitive data due to unauthorized access/attacks from DDoS/
IPS/Firewall/other restricted access control mechanisms. 2. End points in use are
vulnerable to malware/viruses/zero-day vulnerabilities in absence of Antivirus/EDR
solution not being installed or inadequate coverage.
3. No automated detection and response tool available for log correlation for
identifying incidents and threats. |
High |
| 2 |
Breach of data protection law |
Data privacy and protection of personal data is an area of increasing concern
globally. Many countries are enacting their data privacy regulations to ensure protection
of personal data. Violation of data protection laws or security breaches can result in
substantive liabilities, fines or penalties and reputational impact. |
High |
| 3 |
Business Risk |
Non-replacement of EOL/EOS switches/routers/firewall/other network related devices can
create potential business impact. |
High |
| 4 |
Technology Risk |
Non evaluation of existing e-Commerce platform (Java based) & set of internal
applications (.NET based) for technological and infrastructure future readiness. |
Medium |
| 5 |
Quality & Process Risk |
Non-renewal of Quality certification can lead to vulnerability in processes and
systems related to Information Security Management System. |
Medium |
| 6 |
Operational Risk |
In absence of Redundancy at different levels could lead to business continuity
increasing downtime of e-commerce system. |
Medium |
| 7 |
Resourcing Risk |
Inadequate human manpower due to resignation from existing team and delays in getting
replacement. |
Medium |
| 8 |
Infrastructure Risk |
Gap of warranty/AMC for data centre equipment could create business continuity
incidents in case of equipment failure or lack of technical support as per SLA. |
Medium |
| 9 |
Compliance Risk |
Non-renewal of software/tools for commercial/business use could lead to litigations. |
Medium |
Financial Risk
| Sr. No |
Risk Category |
Risk Description |
Severity |
| 1 |
Commodity Prices |
Our profitability depends on commodity price as in some case we get service charge on
the material value we auctioned, if commodity price falls it may impact our profitability |
High |
| 2 |
Cash flows |
Cashflow may get affected in case default of debtors / or any adverse legal decision
on ongoing litigations. |
High |
Legal & Compliance Risk
Legal Risk
1. Profitability may severely impact if we get adverse decision in case of pending
litigation in various forum.
2. Risk of infringement of third-party IPs may lead to potential liabilities, increased
litigation and impact reputation and loss of ownership right, revenue and value.
Regulatory compliance Risk
1. New and changing regulatory compliance, corporate governance and public disclosure
requirements add uncertainty to our compliance policies and increase our costs of
compliance.
2. In the event that the Government of India changes its tax policies in a manner that
is adverse to us, our tax expense may materially increase, reducingour profitability.
Risks, Internal Control Systems and their adequacy
Risk Management Policy in MSTC for trading was introduced in the year 2008-09. The
policy has been last revised on 5th April, 2018. MSTC makes it certain that the
internal control system functions within the risk appetite of the Company. The company has
now discontinued the risky models of business in trading.
M/s. Ray and Co. (FRN: 313124E) and M/s M.C. Bhandari & Co. (FRN: 303002E),
Chartered Accountants were assigned with the Internal Audit function of the Company
fortheyearandtheirreportsare putuptothe management at regular intervals and summarized
statement of important issues are placed before the Audit Committee. The Audit Committee
analyses the functions of the internal control system and recommendations of the committee
are put up to the Board and those are implemented as per the considerations of the Board.
Audit Committee also considers various financial statements for risk analysis and control.
CONSERVATION OF ENERGY AND RESOURCES
MSTC works primarily in the field of sale of scrap materials, especially ferrous scraps
from different sellers and trading of those scraps for recycling. Thus, MSTC works for the
conservation of the natural resources, reduction in pollutants, conservation of energy by
recycling ferrous scraps into a re-useable form. MSTC contributes towards recycling by
facilitating easy scrap availability through common portal.
KEY FINANCIAL RATIOS
| Key Ratios |
FY 2022-23 |
FY 2021-22 |
Change in % |
Reason for Difference / Remarks |
| Debtor Turnover Ratio |
0.88 |
0.83 |
6.02% |
Debtor Turnover Ratio increased due to reduction in Trade Receivable. |
| Inventory Turnover |
- |
- |
- |
Not applicable |
| Interest Coverage Ratio |
|
|
|
Company does not have any long-term debt, hence, Not applicable |
| Current Ratio |
1.15 |
1.09 |
5.50% |
Current Ratio has improved due to better liquidity on account of higher profit and
cash realisation. |
| Debt Equity Ratio |
|
|
|
Company does not have any long-term debt, hence, Not applicable |
| Operating Profit Margin (%) |
96.57 |
47.31 |
104.12% |
The ratio has increased due to increase in profit. |
| Net profit Margin (%) |
73.67 |
42.51 |
73.30% |
Net Profit Ratio has increased on account of higher profit. |
| Return on net Worth (%) |
40.27 |
42.98 |
- 6.31% |
Although the Profit (PAT) has increased but the ratio has decreased on account of
increase in Total Equity. |
CAUTIONARY STATEMENT
Statements under "Management Discussion and Analysis" are on Companys
projections and estimates. Actual results may materially differ from such projections and
depends on economic condition and industry demand in the relevant domestic and
international market. Government regulations including fiscal regulations and other
incidental factors may also affect the projections and estimates.
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