mitcon consultancy engineering services ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS

About MITCON

MITCON is an ISO 9001:2015 certified Company offering Concept to Commissioning solutions for various businesses for last 40+Years. MITCON has got an experience in multiple industry verticals include Energy Transition, Renewables, Biofuels, Skill Development, Environment Management and Engineering, Business Advisory Services.

In addition, MITCON considers the Sustainable Development Goals (SDGs) an important initiative for realizing a sustainable society and improving peoples Quality of Life (QoL). Thus, MITCON is carrying out its Engineering and Consultancy Services which cater ESG Reporting, Sustainability Reporting, Climate Change Mitigation & Adaptation, Carbon Neutrality & Net Zero, Carbon Credits & Trading to achieve UNs Sustainable Development Goals. Also, we ensure our work towards the project we execute too are contributing towards major SDGs.

Industry Structure and Development:

The services sector is not only the dominant sector in Indias GDP, but has also attracted significant foreign investment, has contributed significantly to export and has provided large-scale employment. Indias services sector covers a wide variety of activities such as business services, community, trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, social and personal services, and services associated with construction. The Government is also promoting the service sector by launching various initiatives. India is witnessing the huge foreign direct investment in the service sector. The services sector is becoming a key driver of Indias economic growth.

The GoI has announced a Rs. 20 lakh crore economic package under the ‘AatmaNirbhar Bharat Abhiyaan, to aid our country. Many such initiatives taken by the GoI namely, Smart Cities mission, Digital India, Startup India, Swachh Bharat Abhiyaan, Pradhan Mantri Kaushal Vikas Yojna, Pradhan Mantri Jan Dhan Yojana, Namami Gange are creating a whole lot of opportunities. This has enormously created indigenous opportunities in Innovation, technologies and solution within us. Our team is geared up in Harnessing creativity and building expertise to take up this as an opportunity and make the best out of it. This will empower our customer in enabling possibilities and enhancing opportunities to deliver innovative solutions to daunting problems.

Segment-wise Performance

Energy Transition

1. Energy Audit and Energy Conservation
1. Energy Conservation

	For the Year	Cumulative
No. of Energy Audits	50	961
Gross Energy Consumption Audited (TOE)	97,168	68,28,251
Savings Recommended/Achieved (TOE)	2,370	3,67,770
CO2 emissions eliminated (tCO2)	12,316	17,15,792
Client Spectrum (No. of assignments)
Manufacturing	33	685
Infrastructure (Power/Port)	4	83
Services (Hotel, Hospital, Bank, etc.)	7	151
Distribution Company	-	24
Mining	-	2
Pharma	4	12
Textile	3	7
Public Utilities	6	30
International Assignments	-	10

2. Carbon Footprint/GHG/Sustainability

	For the Year	Cumulative
No. of assignments	5	12

3. Carbon Credit

	For the Year	Cumulative
No. of assignments	11	150
Estimated tCO2 reduction	5,85,671	42,28,313

2. Solar

	For the Year	Cumulative
Consulting assignments (design, DPR, TEV, LIE)	60MW	5060MW
Rooftop Solar EPC Commissioned	510KW	1.32MW
Ground mounted solar EPC	1.27MW	36MW
Units generated from owned solar plants	28,636,557 kWH	130,343,987 kWH
CO2 emissions eliminated (owned solar plants) (tCo2/Yr)	34,363 tCo2	156,412 tCo2

3. Biofuel and Green Chemistry

	For the Year	Cumulative
Cogen/Biomass power plants	296 MW	1296+MW
Ethanol Plants	4,615 KLPD	19,615+KLPD
Sugar Cane Plants	50,250 TCD	4,50,250+TCD

4. Environment Management & Engineering

	For the Year	Cumulative
No of Environment Impact Studies and Approvals	EIA/Impact Assessment Studies completed: 69 Approvals : 41	EIA/Impact Assessment Studies completed: 689 Approvals : 251
Environment Clearances/approvals for Investments, (Rs. In Crores)
Townships and Area Development Projects	--	6202
Building and Construction Projects	8,325	16,457
Sugar, Distillery and cogeneration plants	4,520	52,400
Thermal Power Plants	900	5,729
Highway	--	974
Synthetic Organic Chemicals Industry	--	673
River Valley Projects	--	11,668
Cement	--	1,707
Common Effluent Treatment Plants (CETPs)	92	169
Metallurgical industries (ferrous & non-ferrous)	--	446
Metro	12,000	14,794
Transmission/Pipeline	--	1,630
Ports, harbours, break waters and dredging	--	608
Consultancy Services for Municipal Solid Waste	13.66,611 MT	20,34,785 MT
Municipal Capacity Building	--	09 Nos.
Laboratory Assignment	250 Nos.	3,110 Nos.

5. Business Advisory

	For the Year	Cumulative
Pre-investment reports for investment in various sectors	Rs 8,249.67 crore	Rs 2,29,840.67 crore
Market Studies/Baseline/Impact Studies	Rs. 481.29 crore	Rs. 481.29 crore
Investment monitoring services	Rs. 541.67 crore	Rs. 541.67 crore

6. Skill Development

	For the Year	Cumulative
No of Participants in "Suryamitra"	118	4,020
No of Participants in "Vayumitra"	90	90
No of participants in Entrepreneurship Development Program Including CMEGP	1,310	3,882
Special Component Plan (SCP) – District Industries Centre (DIC)	11,465	2,45,070
MSCIT / Other IT Based Short Duration Training Courses	1,08,889	16,84,591
Other Programs	615	615
Skill based CSR Implementations	1,418	9,083
No of Bed Side Assistants	150	2,125
No. of Students in Clinical Trials	291	1,293

The Company shall continue to add cutting edge solutions in energy/environment/green chemistry to make our clients meet their sustainability objectives. We aspire to create most preferred engineering consulting firm with "Sustainability" at its core.

Our clients will continue to face increasing pressure on making themselves and their entire value chain sustainable. We will provide customized solutions for energy transition and other GHG emission reductions to our clients and their value chains.

We will continue to invest resources to make our solutions digital in a sustainable way. We have fortified our team to modernize legacy assets/processes/solutions and intend to connect/bridge with digital business and operating models.

Highlights of Milestone achieved:

• Diversified beyond sugar & power adding cement, specialized chemicals, bio-CNG, oil & gas, super-critical processes, agro- processing etc.
• Completed 36 DPRs in FY22-23
• Team geared up to cater to versatile assignment in various sectors
• Market surveys for various raw materials, fuels, products & by-products for the smooth operation of businesses
• Started innovative programme on Vayumitra Skill development scheme of Government of India, Sponsored by National Institute of Wind Energy, Chennai under the ageis of MNRE, New Delhi.
• Started fee based Solar PV technician course at 15 new locations in Maharashtra
• Received Vanyajeev award from Forest department Government of Maharashtra for exemplary work in conservation of forest and wildlife in Tadoba Andhari Tiger Reserve. We have trained 444 Students in the sector of Solar and Electrical and 89.36% students were provided wage employment opportunity. This has helped in financial upgradation of their families. These students belong from small villages and buffer zone of reserve forest. This has helped Government to reduce animal – human conflict.
• Conducted challenging Skill development training programme for SC, BPL, ITI passed candidate in rural area of Madhya Pradesh with Tangible outcome of 82 % placements under wage employment scheme of Government of MP.
• Special project on "Operation Parivartan" is implemented at Solapur for the 200 ladies involved in making illicit liquore (Hath Bhatti) and brought them in main stream of society. They have started their enterprise in textile sector and now some of the group of ladies has received International orders. This project was jointly implemented by District Industries Center, Police Department Solapur and MITCON provided training and hand holding support to the participants. This remarkable project is recognized for the year 2022-23 by Prime Minister Award given at the hands of Hon. Narendra Modiji, Prime Minister, India.
• Special project of Holy city development was concluded in Pandharpur sponsored by NIESBUD, Ministry of Skill & Entrepreneurship Development, Government of India. Under this we have developed 300 new entrepreneurs, and provided technology intervention, capacity development and established forward backward linkages to 400 existing enterprises. In all we supported 700 entrepreneurs.
• Suryamitra participants trained by us in Solapur formed Solar panel manufacturing cluster at Latur and Government of Maharashtra has supported by providing funding support of Rs.7.00 Crs to them.
• Highest ever business executed by the EME division
• Successfully executed first Combine Effluent & Sewage Treatment Plant Upgrading the 10 KLD to 30 KLD – Praj Hi Purity Systems Ltd.
• First assignment on DGPS Survey completed successfully
• Renewal Audit of National Accreditation Board for Testing and Calibration Laboratories successfully completed as per standards ISO/IEC 17025:2017
• Second Surveillance Audit ISO 45001:2018 successfully completed
• Setup of new food testing and microbiology laboratory with NABL accreditation
• Participated in 12 Proficiency Testing Programs (PT) and conducted 4 Inter Laboratory Comparison (ILC) Programs and 3 external Laboratory Comparison (ILC) Programs. Achievement of 100 % accuracy in all PT and ILC Program
• Empanelment with
• MECON Limited for outsourcing of satellite image processing & GIS Map preparation /digitization for EIA EMP Studies & other environmental studies
• Maharashtra Maritime Board (MMB) for Empanelment of NABET Accredited Environmental Consultants for obtaining CRZ Clearance, Environmental Clearance Including Preparation of Environmental Impact Assessment (EIA) Report, Environment Management Plan (EMP) And Forest Clearance for Various Marine
• Government of Maharashtra Urban Development Mission Directorate Swachh Bharat Mission (U) Empanelment for Preparation of Detailed Project Report (DPR), Transaction Advisory Including Bid Process Management and Provision of Supervision & Monitoring Services for Implementation of Integrated Solid Waste Management Projects
• Mahatma Phule Renewable Energy and Infrastructure Technology Limited for Consultancy work for Environment and Climate Change Vertical.
• Empanelment as ASM renewed with IBA
• New empanelments with Union bank, Canara, NaBFID, Saraswat Bank, AU Bank
• New industry serviced include - Airlines, AAC blocks, Glass bottles, Bagasse based Dry Pulp Sheet.

Highlights and Milestone achieved by MITCONs Group Companies

MITCON Credentia Trusteeship Services Limited (formerly MITCON Trusteeship Services Limited)

• MITCON Credentia has on boarded more than 300 Companies & 600 transactions.
• Working with 15% of Indias Unicorn
• Started trusteeship operations in GIFT City for Funds
• Working with top five Alternative Investment platforms
• Working with 50+ NBFCs
• Robust ERP System in place and digital system
• Team size grown to 40+ across all locations

Shrikhande Consultants Limited (formerly Shrikhande Consultants Private Limited)

• Expanding into new geographies such as Bangladesh for DPR Projects, AE/IE/PMC Projects in Roads & Bridges Sectors.
• We are empaneled with more than 100 Public Sector entities, National & State Road Development Corporations, Regional Development Authorities, Municipal Corporations, Urban Local Bodies etc.

Sr. No.	Project Name	Client	Project Cost
1	Independent Engineer Consultancy services O&M for Rajeev- Gandhi Sea link for next 3 years.	MSRDC	? 450 crores
2	Design Consultancy for Construction of 5 No Bridges on Ulwe River Course & Gadhi river for Proposed Navi Mumbai International Airport (NMIA)	CIDCO	? 350 crores
3	Project Management Services for Quality Monitoring Agency (QMA) for City Roads in Mumbai	MCGM	? 1050 crores
4.	Consultancy Services as Authority Engineer for Supervision of Road Project at Jammu & Kashmir	NHIDCL	? 821 crores
5.	Consultancy Services as Authority Engineer for Supervision of Road Project at Meghalaya	NHIDCL	? 155.54 crores
6.	Appointment of Special Third Party Independent Techno- Financial Auditors in Punjab	Punjab Infrastructure Development Board	? 900 Crores
7.	Selection & Empanelment of Project Management Consultancy (PMC) firm for Preparation of Administrative Approval Proposals and Overall Project Management of the New and Existing Structures and Minor Irrigation Projects	Soil & Water Conservation Department, Government of Maharashtra	? 500 crores
8.	Design & Project Management Consultancy Services for Residential & Commercial High Rise Towers K-2, K-3, K-5 for Metro-Line-3 in Mumbai	Mumbai Metro Rail Corporation	? 600 crores
9.	Redevelopment of Residential Co-Op Housing society at Andheri Mumbai	Chandrashekhar Co-Op Housing Society Ltd.	? 100 crores

Discussion on Financial Performance with respect to operational performance

Financial Year 2023 Year Over Year Highlights – Consolidated

• Revenue from Operations of INR 85.75 Crore, decrease by [21.45] %;
• Consultancy & Training Revenue of INR 58.15 Crore, increase by [26.67] %;
• Project Service Revenue at INR 11.08 Crore, decrease by [77.05] %
• Wind/ Solar Power Generation Revenue INR 14.43 Crore, increase [17.00] %
• EBITDA of INR 17.97 Crore, increase [3.26] %;
• Profit/(Loss) for the year INR 4.39 Crore, increase [193.37] %

Opportunities, Threats, Risks and Concerns:

MITCONs business model faces complexities and in response to that, it has established a robust enterprise risk and compliance management framework and process to ensure achievement of its strategic objectives. This process is enabled by an internal Risk Management Committee and compliance with it enables a more holistic approach towards informed decision making. The journey to the digital future requires not just an understanding of new technologies and new ways of working, but a deep appreciation of existing technology landscapes, business processes and practices. Our strategy is to be a navigator for our clients as they ideate, plan and execute their journey to a digital future. We embraced a four-pronged strategy to strengthen our relevance with clients and drive accelerated value creation:

• Scale Agile Digital
• Energize the core.
• Reskill our people
• Expand localization.

Our Strengths

• With almost four decades of experience offering Concept to Commissioning solutions for various businesses, we believe we are uniquely positioned to help them in realizing a sustainable society and improving peoples Quality of Life (QoL).
• We have built industry-specific domain, expertise, and capabilities in methodologies which give us the ability to articulate and demonstrate long-term value to our clients, with whom we have deep, enduring and expansive relationships.
• We have perfected sophisticated service delivery and quality control processes, standards and frameworks, which have resulted in a track record of performance excellence and client satisfaction.
• Nation/ International accreditations/associations proves that our standards of quality are among highest in the Nation. These accreditations not only involve our own internal protocols for establishing quality works but it set new milestones for commitment of best quality and reliability and sustainability.
• We have the ability to attract and retain high-quality management and professionals.
• We have invested extensively in infrastructure and systems to enable learning and education across the enterprise at scale. These give us the ability to keep pace with ever-changing technology and how they apply to customer requirements.
• We have the financial strength to be able to invest in personnel and infrastructure to support the evolving demands of customers.
• We maintain high ethical and corporate governance standards to ensure honest and professional business practices and protect the reputation of the Company and its customers.

Our Risks

Risks related to markets in which we and our clients operate

• Our clients may operate in sectors which are adversely impacted by climate change which could consequently impact our business.
• Financial stability of our clients may be affected owing to several factors such as demand and supply challenges, currency fluctuations, regulatory sanctions, geo-political conflicts and other macroeconomic conditions which may adversely impact our ability to recover fees for the services rendered to them.
• Intense competition in the market for engineering consultancy services could affect our win rates and pricing, which could reduce our market share and decrease our revenues and our profits.

Risks related to the investments we make for our growth

• Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and in the industries on which we focus.
• We may engage in acquisitions, strategic investments, strategic partnerships or alliances or other ventures that may or may not be successful.

Risks related to our cost structure

• Our expenses are people centric and fixed in nature, which could cause fluctuations to our profitability.
• Any inability to manage our growth could disrupt our business, reduce our profitability and adversely impact our ability to implement our growth strategy.

Risks related to our employee workforce

• Our success depends largely upon our highly skilled professionals and our ability to hire, attract, motivate, retain and train these personnel.
• Our success depends in large part upon our management team and key personnel and our ability to attract and retain them.

Risks related to our contractual obligations

• Some of our failure to complete fixed-price and fixed-timeframe contracts, or transaction-based pricing contracts, within budget and on time, may negatively affect our profitability.
• Some of our client contracts can typically be terminated without cause, which could negatively impact our revenues and profitability.
• Some of our client contracts are often conditional upon our performance, which, if unsatisfactory, could result in lower revenues than previously anticipated.
• Our work with governmental agencies may expose us to additional risks.

Risks related to our operations

• Our reputation could be at risk and we may be liable to our clients or to regulators for damages caused by inadvertent disclosure of confidential information and sensitive data.
• Our reputation could be at risk and we may be liable to our clients for damages caused by cyber security incidents.
• We may be the subject of litigation which, if adversely determined, could harm our business and operating results.
• Our insurance coverage may not be adequate to protect us against all potential losses to which we may be subject, which could adversely affect our business.
• The markets in which we operate are subject to the risk of earthquakes, floods, tsunamis, storms, pandemics and other natural and manmade disasters.
• The safety of our employees, assets and infrastructure may be affected by untoward incidents beyond our control, impacting business continuity or reputation.
• Climate change risks are increasingly manifesting in our business as strategic risks, physical risks and transitional (market and compliance) risks, which if not managed adequately, can affect our operations and profitability.

Risks related to legislation and regulatory compliance

• New and changing regulatory compliance, corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.
• Changes in the policies of the government of India or political instability may adversely affect economic conditions in India generally, which could impact our business and prospects.

Outlook

As impact of pandemic, supply chain disruptions and volatile geopolitics continues to wane, we look ahead for an exciting journey. We shall continue to focus on products/services that are socially relevant and useful. We intend to play meaningful role in -

1. decarbonisation of various industrial segments such as steel, cement, industrials and building construction.
2. "photosynthesis or bio economy" through our biofuels and green chemistry division.

During next financial year, we intend to commission a BESS project and pilot green hydrogen facility. Further, we will continue to build on our initiatives in waste water, municipal solid waste, bio-gas segments.

For hard to abate sectors, we will continue to invest in development of nature based solutions (agroforestry, mangroves ecosystem, bio-char etc) and BECCUS.

Our skill division would aggressively explore opportunities emerging from large capacity building demand across green jobs spectrum (renewable energy, energy storage, electric mobility, hydrogen).

We will continue our disciplined acquisition strategy to expand engineering consulting service offering into new markets, gain competitive advantage and acquire new skillsets.

Further to our SBTi commitment, during the year we will continue to take ambitious commitments towards Net Zero and Biodiversity. Through our services, we will work with our clients to create larger impact towards climate goals.

We shall continue building future-proof organisation with "people centric" philosophy and shall undertake various efforts to provide our team a fulfilling workspace. We will continue to emphasize professional development, internal promotions, and succession planning to ensure leadership continuity and a strong legacy.

We are committed to enhance our client experience through our role as meaningful partner in their journey towards decarbonisation and sustainability.

Internal Control Systems and their adequacy:

The internal control system is designed to ensure that all the financial and other records are reliable for preparing financial statements and for maintaining accountability of the assets. The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly.

The CEO and CFO certification provided in the CEO and CFO Certification section of the Integrated Annual Report discusses the adequacy of our internal control systems and procedures.

Material Development in Human Resources / Industrial Relations front, including number of people employed:

Our culture and reputation as a leader in consultancy and engineering services enable us to attract and retain some of the best talent.

Human resources management

At MITCON, talent transformation is an important focus area. It begins with sensing employee needs and responding with a value proposition that delivers meaning, purpose and value for them. It builds synergy between how we look to differentiate ourselves as a Company and deliver on the expectations of our employees.

We have a three-pronged strategy to deliver value to our employees:

• Inspire our people with meaningful work and passionate teams, enabling them to find purpose and make an indelible impact.
• Ensure that our people are continuously learning and progressing in their careers, and shaping our collective future.
• Create opportunities for every employee to navigate further, powered by our culture and partnered by other MITCONITES with shared aspirations.

Our employee engagement framework is based on the 5Cs – Connect, Collaborate, Celebrate, Care and Culture. Its main objective is to ensure effective engagement, well-being and sustained motivation levels among employees in the hybrid model of work.

Internal Complaints Committee

At MITCON, our goal has been to create an open and safe workplace where each and every employee feels empowered to contribute to the best of their abilities, irrespective of gender, sexual preferences or any other classification that has no bearing on the employees work output.

MITCON has constituted an Internal Committee (IC) to consider and resolve all sexual harassment complaints reported. The constitution of the IC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the committee includes external members with relevant experience. Senior woman employee is the presiding officer. Half of the total members of the IC are women. The details of complaints pertaining to sexual harassment that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability Report of this Integrated Annual Report.

Details of significant changes (25% or more) in key financial ratios along with detailed explanation for such change as compared to the previous financial year:

Ratio	As at 31 Mar 2022	As at 31 Mar 2023	Change %	Remarks
Debtors Turnover	4.96	2.61	47%	Rigorous efforts to recover dues
Inventory Turnover	0.04	.03	25%	Depends on the project assignments
Interest Coverage Ratio	3.67	4.93	34%	Small increase due to availing loan
Current Ratio	2.01	0.76	62%	It depends on the project revenue and its liabilities
Debt Equity Ratio	0.076	0.10	32%	Small increase due to availing loan
Operating Profit Margin (%)	8.06	16.93	110%	Better operational efficiency and growth in core business
Net Profit Margin (%)	2.75	12	336%	Better operational efficiency and growth in core business

Details of any Change in Return on Net worth as compared to the immediately previous financial year along with a detailed explanation thereof. - Return on net worth for the year is 5.21% (previous year 2.65%). There is improvement in operational efficiency and growth in core business activity.