MSTC Limited (MSTCLTD) Earnings Call Transcript & Summary

Thank you. I, Ajay Kumar Rai, Company Secretary, on behalf of MSTC Limited and Board of Directors would like to welcome all the shareholders to the 59th Annual General Meeting of the company. And with your permission, I would like to start the meeting. Good morning, ladies and gentlemen. We welcome you to the 59th Annual General Meeting of the company held through video conferencing and other audio-video means. The proceeding of the AGM shall be deemed to be conducted at the regional office of the company, which shall be the deemed venue of the AGM. I would like to draw your kind attention to certain key points for participating in this annual general meeting. The facility to join this AGM through VC is being provided to the members on first-come first-serve basis. All members who are attending this meeting are by default placed on mute mode to avoid background disturbance and to ensure smooth and seamless conduct of the meeting. Once the question and answer session will start, [indiscernible] the members attending the meeting as speaker will be announced one by one by the company secretary. The speaker, whose name is announced, will be unmuted by the host. Only those shareholders whose name is announced will be allowed to speak. The shareholders are requested to switch on their camera and audio before they start speaking. The speaker, while speaking, would use earphone and ensure that WiFi is not connected with any other device and there is no disturbance from the background. In case, due to network issue, a speaker shareholder is not able to join the meeting, the next shareholder will be requested to speak. The shareholder who could not able to join the question-and-answer session on their turn will be allowed to speak only after all the speaker shareholders have completed their turn. I would like to request all the speaker shareholders not to repeat the question already raised by earlier shareholder and limit their speech to maximum 3 minutes. Further, shareholders are requested to ask only pertinent questions, and that too related annual report and items mentioned in notice of 59th Annual General Meeting of the company. During the meeting if shareholders face any technical issue, they may contact the numbers mentioned in the notice of the AGM. Since the meeting is held through VC mode, pursuant to applicable circular and guidelines issued by the Ministry of Corporate Affairs, physical attendance of the shareholder is dispensed off. Accordingly, there is no requirement for appointment of proxy by the members as well as submission of attendance slip. Necessary documents registered in compliance with the provisions of Company Act 2013, which are required to be kept open are available for inspection and shall remain open and accessible during the continuation of the meeting to any person having a right to attend the meeting. Members seeking to inspect the document may visit NSDL site for the same, or may request for the same at the e-mail provided in the notice of AGM. The notice for conveying the 59th Annual General Meeting with annual report for 2023-'24 containing Directors' report along with its annexures, audited stand-alone and consolidated financial statements of account of the company for the year ended 31st March 2024, together with the Director's Report, has been sent to the shareholders through mail to all those shareholders whose e-mail ID is available with the company and depository participants. The company has taken all the requisite steps to enable the shareholders to participate and vote on the items to be considered in this AGM. Company has received representation from the President of India holding 4,55,80,800 number of shares, which contribute to around 64.75% of the total voting power. Now I request the Chairman sir to continue the proceeding of the meeting.

Thank you. Good morning, ladies and gentlemen. I Manobendra Ghoshal, Chairman and Managing Director of your company, on behalf of the Board of Directors of MSTC Limited, welcome you all to this 59th Annual General Meeting of your company. I would like to extend my sincere thanks to all of you for taking the time to be with us today. In compliance of the various directions issued by the Ministry of Corporate Affairs and SEBI, we are organizing this annual general meeting through video conferencing/other audio-visual means mode. I hereby declare the meeting open since the requisite quorum is present. For the information of members, I would like to state that the proceeding of this AGM is being video recorded. I would now like to call all the directors who are present in this meeting to introduce themselves to the shareholders. I request all the Directors to call their names, place from which they are attending the meeting, the fact that everything is visible and audible to them, and no one other than them is attending the meeting.

Good morning. I'm Mrs. Bhanu Kumar, Director (Commercial) of MSTC. I'm attending this AGM from the company's headquarters in Kolkata. I have seen the agenda and the audio-visual means is perfect.

Myself, Subrata Sarkar, Director Finance, attending the meeting from MSTC Limited headquarters at Kolkata. And the audio-visual is very clear, and I have received the requisite papers.

Adya Prasad Pandey, Independent Director, [Foreign Language].

Dr. Vasant Patil, Independent Director, attending the 59th Annual General Meeting of MSTC from my residence, Nandurbar, Maharashtra.

Good morning, everyone. I'm Ashwini Kumar, Government Nominee Director on the Board of MSTC. I'm attending the AGM from my office in New Delhi over VC. I got the annual report and papers in mail. Thank you.

Good morning. Myself, Ajay Rai, Company Secretary, attending the meeting. I would also like to state here that Dr. Patil is also holding the Chairmanship of Audit Committee Meeting. Shri Pandey ji is holding as the Chairman of Nomination Remuneration Committee and CSR Committee. And Ashwini Kumar ji is also holding the Chairmanship of Risk Management Committee. So they are also attending the meeting as Chairman of the respective committees.

The representatives of statutory auditors and secretarial auditors are also attending the 59th AGM through video conferencing. Dear shareholders. It gives me immense pleasure to present to you the annual report and financial statement of your company for the year ended 31st March 2024. I'm proud to state that amidst uncertain economic and demand environment, your company continued to grow and evolve the business and has delivered yet another year of good performance. During the year, with rapid digital transformation, India has established itself as a hub for innovation and technology services, boosting its economy and positioning it as a key player in the future of digital economy. We are hopeful that the growth and advancement will continue to help your company to improve its position in the coming years. The annual report for '23-'24 contained in the 59th AGM notice, Director's report, the audited statement of accounts of the company for the year ended 31st March 2024, has been circulated to you. With your kind permission, I take them as read. Now with your position, I would like to highlight some important developments of the company. The Indian economy concluded the past fiscal year on a robust note, driven by strong business and consumer sentiments, sustained public investment, easing inflation, and a favorable external environment. However, extended geopolitical tensions and persistent high real interest rates post some risks to the growth trajectory. B2B e-commerce emerged as a pivotal driver of economic growth, catalyzing trade activities amongst businesses within the country and across borders. The sector experienced robust expansion fueled by increasing Internet penetration, widespread adoption of smartphones, and the government's focus on digital infrastructure development. Financial year '23-'24 has been a steady year for MSTC. Business volumes have remained largely similar to the previous year in the major sectors. Revenue was also flatlined, with revenue from scrap being adversely affected due to fall in both volumes coming off for disposal as well as average market prices having gone down over the year. During the financial year, your company has added 2 more RVSFs, that is registered vehicle scrapping facilities at Guwahati and Bengaluru through its JV company MMRPL, Mahindra MSTC Recycling Private Limited, promoting steel recycling towards circular economy. It launched ELV auction portal for disposal of end-of-life vehicles for central and state governments in compliance with MORTH's notified motor vehicles registration and functions of vehicle scrapping facility rules 2021. Those services have now been extended for individual ELV owners also. It developed the bidding portal for auction of easing critical mineral blocks. Six such blocks of critical minerals have been auctioned successfully in FY '23-'24. It paid interim dividend of INR 10.50 per share. In addition to that, the Board has also recommended payment to final dividend of INR 5 per share, which will be paid to the shareholders after shareholders' approval in this AGM. MSTC plays a very important role as a service provider in e-commerce and as a market leader in this sector. Our strength lies in our ability to convert any business activity conducted through brick-and-mortar method or in any other method to online activity. It has the distinction of serving the majority of central PSUs, state government departments, and a large number of private organizations for providing transparent, fair and seamless e-commerce services to its clients. MSTC has always been availing first-mover advantage in its business verticals. Its subsidiary company, Ferro Scrap Nigam Limited, which is 100% subsidiary, during the year, the profit after tax of FSNL was INR 64.92 crores, rising by 69%. The joint venture, Mahindra MSTC Recycling Private Limited, as you are aware, our company forayed into the recycling sector through its JV company, MMRPL. At present, MMRPL has presence at 40 locations throughout India through 33 collection centers and 7 dismantling centers. Looking at consolidated financials. It has been a reasonably good year for the group with FSNL's performance standing out with the group revenue levels as well as PBT showing an increase of about 4% year-on-year on a consolidated basis. During the financial year, your company has spent around INR 3.78 crores on CSR activities related to health sector in various parts of the country. As you know, your company is a major stand-alone e-commerce company in the country. The area includes selling agency business, e-sales of raw material, minerals and other commodities, e-procurement, et cetera. Customized e-commerce solutions have emerged as major innovative business models for MSTC. Major operational activities undertaken by the company are as follows: 20 coal mine blocks have been successfully allotted through auction for commercial mining in FY '23-'24. 92 major mineral blocks have been successfully allotted through auctions for various states in FY '23-'24. 10,815 numbers of NPAs from various banks have been sold through auctions for the sale value of INR 10,178 crores. The future outlook. MSTC intends to tap the market for selling mined minerals through e-auctions once the successful bidding of the blocks are operationally active. MSTC has developed required expertise for providing e-retail software solutions to the government and private organizations, particularly MSMEs. This sector holds great opportunity and potential for MSTC in the future. MSTC is exploring possibilities for entering into more areas of recycling as a step towards circular economy. I firmly believe that digital transformation is an integral part and will continue to play a key role in the development of the organization in the near future. MSTC has to be ready to seize the benefits and to ensure that we remain well-placed to take the opportunity with both hands. Our team and their passion for excellence give us an unparalleled competitive advantage. MSTC is committed to create value for the customers and ensure that MSTC stays ahead in the market. In terms of opportunities, MSTC is exploring e-auction of sand mining blocks in other states in line with the Uttar Pradesh model. The successful portals for EXIM products for IOCL and ONGC have paved the way for development of such portals 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 wastes, et cetera. Efforts towards R&D. We have framed start-up policies for onboarding start-up companies for R&D as well as utilizing emerging technologies and opportunities. Threats. The GeM portal, reducing opportunity and exposure. With the government's directive to use the GeM portal for purchases, business and e-procurement of common goods and services may take a hit. The scope of work in e-procurement gets downsized as a major percentage of any company's business is spent on procurement of goods and services. Trading business. As a policy, MSTC has decided to taper down this business due to the inherent risks involved. Cyberattacks. Risks of cyberattacks are forever a threat on account of the fast-evolving nature of the threat. In addition to impact on business operations, our security breach could result in reputational damage, penalties and legal and financial liabilities. Business models. Technologies are changing the customer approach, creating new classes of customers and thus creating a challenge for the organization to keep themselves updated and continuously develop a model to suit customer needs. Investor Services. The company's shares have been dematerialized in both the depositories, that is NSDL and CDSL. 31 shareholders out of 73,700 approximately are holding shares in the physical board. I would like to request the remaining shareholders to get their shares dematerialized, so that the bonus shares lying in the Unclaimed Bonus Suspense Account can be transferred to the DEMAT account of the respective shareholders. Further, this will also enable the shareholders to receive the dividend on time. Corporate governance. Your company always tries to attain high standards of corporate governance practices. The company is complying with government guidelines on corporate governance, framed by the Department of Public Enterprises for CPSEs and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 in letter and spirit. Your company is continuously working for the optimal benefit of its shareholders and has thus molded its corporate conduct to fulfill these responsibilities. The company has established systems and procedures to ensure that its Board of Directors is well informed about the policies of the company to enable them to discharge their responsibilities and to enhance the overall value for all stakeholders. Your company is making best efforts to adapt and comply with the changing statutes and continue to comply with the corporate governance guidelines and norms to the extent within its control. MSTC has been awarded first price by Narakas, Kolkata, for best official language implementation in corporate office category. And also consolation prize in magazine publishing. Overall, for the first time, MSTC Limited set a record of receiving 5 Narakas awards cumulatively. Human resources. Your company has always considered its human resources as the most important resource and has been conducting various employee benefit programs. MSTC fosters an environment of continuous learning and innovation and continues to invest in upskilling its office resources by providing training and learning opportunities to them. The industry relations remain cordial and participative all along. We have offices in various cities in India, so that we can reach out to our principals and customers easily and generate more business. Finally, I would like to place on record my gratitude to the Honorable Union Minister for Steel; Honorable State Minister for Steel; Secretary, Steel; Additional Secretary and F&A, Steel; Additional Secretary, Steel; and other officials of the Ministry of Steel; Ministries of Power, Defense, Coal, Mining, Civil Aviation, Petroleum and Natural Gas, and other central government ministries; all state governments, various central and state public sector undertakings; private companies; bankers and our principals and others for their valuable assistance and guidance [Audio Gap].

[Audio Gap] that is 50% on equity shares for the financial year 2023-24. Number third, to appoint a Director in place of Smt. Bhanu Kumar, who retires by rotation, and being eligible, offers herself for re-appointment. Item #4. To authorize Board of Directors of the company to fix remuneration of the Statutory Auditors of the company appointed by the CAG for the Financial Year 2024-25. Number 5. To appoint Shri Manobendra Ghoshal as Chairman and Managing Director of the company. Number 6. To appoint Shri Vinod Kumar Tripathi as Government Nominee Director. The Chairman and Managing Director and the other Directors present in the meeting will be happy to answer any questions or furnish any clarification required by any member present related to the resolutions set out in the notice dated July 23, 2024.

Members are being requested to ask questions relating to agenda specified in notice and the annual report of the company. We've already received the list of shareholders willing to ask questions, and their name will be called [indiscernible]. Members are requested to follow the protocol elaborated at the beginning of the meeting. We are going to reveal now the list of the respective shareholders. The first shareholder is Shri Subhash Kar.

Good morning, everyone, and greeting of the day to our respected Chairman sir and all the Board members. My name is Subhash Kar, joining from Kolkata. Chairman sir, your initial speech was a very detailed one, excellent one. Clearly explained our company's present and future prospects. Sir, I would like to congratulate you and the entire management for good performance of financial year 2023-24. Displayed in our annual report, it's really wonderful, informative, with facts and figures are all norms of corporate governance. I strongly support all the regulation by remote e-voting. Sir, I really appreciate the management team in terms of consistent dividend policy. Our company's CSR policy was good. And once again thanks to the management team for achieving various awards. Sir, I only have one request. Sir, I hope you will consider rewarding speaker shareholders, something, too, sir, dry fruits, please, a token of love, sir, okay? Sir, I convey my sincere thanks to well-experienced Company Secretary, Mr. Ajay Kumar Rai, and the entire team, very good investor service and registering my name as a speaker. Sir, some of my questions. What are the company's key objectives and priorities for the next 2 to 3 years. Next, what is the business generated from the e-commerce section, and any technology upgradation for better output at our plant distribution network? Sir, AI technology, what we are going to adopt, give some light on this? Sir, our company have listed on any dedicated ESG platform, either domestic or international? And what is our rating score, if listed? Nothing to add more. I wish you and entire team very good and great success and prosperities in the coming future. Thank you, sir. Namaskar.

Thank you, Mr. Kar. Now I request Mr. Sujan Modak to...

Respected Chairman, other Board of Directors, I'm Sujan Modak. I'm attending this meeting from my residence in Kolkata. Sir, very good result. Our company has given very good result and really very good dividends, sir. So for that, I really congratulate our management and all workers, officers of our company, sir. Sir, I have a few questions. Sir, on the renewable energies front, what is our thought process, if you can please tell us? And AI technology absorption, now all over the world the same thing is going on. So what is our thought process on AI technology absorption, if you can please tell us, sir? Page 211, 2-1-1, I can see there's a bad debt written off, INR 10,269 lakhs. It's a huge amount, I believe so. I don't know what you really understand that, the amount of it. So if you can please tell us what exactly and why it was written-off? For our knowledge purpose, sir. And also in the same page, there's miscellaneous expenses, INR 852 lakhs, that's also quite a big amount, I believe. So if you can please tell us about this, sir. Sir, for FY '25, what is our revenue growth you project, means your assumption? I don't know that -- exact figures cannot be done, but for the investors community, that's a very important thing. So this revenue growth, how much you project, sir? And sir, our, this question-and-answer session, what is happening, so is it possible for our company to put it on our website or in the shareholders' e-mail address? Because all the shareholders cannot join it, sir. But for their knowledge and for their education purpose, I think it will help our company in the long run, sir. And sir, before I finish, I'd like to say, our Company Secretary, Mr. Ajay Kumar Rai, is a well-experienced person, but we don't receive any call from him at least before the meeting, before the AGM, like whether we received that link or not? Normally, every company, they do it, sir. That helps the speaker shareholders a lot, quite a lot, sir. So if Mr. Ajay Kumar Rai can do that. Sir, Mr. Rai, if you can please listen to me, please, next time, if you can do it, it will be good. And Mr. Ajay, sir, if possible, big sir, very busy, sir. So he can call us once at least in your office, we can meet you at least. That will be really good for us. We'll feel better, sir. Nothing to add more. Over to you for further proceedings. And before that, I'd like to again say that, my previous speaker, Subhash Kar, what he has told about doing something to the investors, especially the persons who are attending the meeting, that would be very nice. Thank you. Over to you for further proceedings.

Thank you, Mr. Modak. Now we can move to the next shareholder, that is Shri Bimal Krishna Sarkar.

Very good morning, sir. Bimal Krishna Sarkar [Foreign Language] Question number one, sir, miscellaneous expenses increased by [ 409.87% ]. Sir, last year [Foreign Language]. Sir, number 2, bad debt write-off [Foreign Language] INR 10,269.91 lakhs, last year INR 7,666.33 lakhs. [Foreign Language]. Sir, foreign traveling expenses [Foreign Language]. During the year, 17 CSR projects, including [Foreign Language].

Thank you, Mr. Sarkar. Now we request Mr. Dilip Kumar Das.

Good morning, Mr. Chairman, other eminent Board of Directors, officials, and my online fellow shareholders who are watching this 59th Annual General Meeting through video conferencing meeting. Giant success. Myself, Dilip Kumar Das, shareholder participating in this meeting from my residence [Audio Gap]. Sir, I want our Company Secretary, Mr. Ajay Kumar Rai [Technical Difficulty] to express my views and also thanks to entire team of MSTC for investor service by sending annual report [indiscernible] well in advance, which [Technical Difficulty]. In opening speech, our Chairman is very active and elaborately explained all the areas of MSTC's financial performance. Our market capital increased 7 times in 5 years [Technical Difficulty] INR 64.57 crores, it is over 3 times. Dividend also good, INR 0.50 [Technical Difficulty]. Sir, I am very happy with this exemplary performance. Our company is [Technical Difficulty] and I hope [indiscernible] superb management team and support [Technical Difficulty] and hope your leadership will be in the sky. Coming back to annual report [Technical Difficulty]. Over to you for further proceedings. Namaskar to all.

Thank you, Mr. Das. Now I request Mr. Santosh Kumar Saraf for joining us and raise the questions.

[Foreign Language].

[Foreign Language].

Myself, Amit Kumar Banerjee. Thank you for getting me connected and opportunity to speak. Such a beautiful meeting today organized by your company, MSTC Limited. It is our 59th Annual General Meeting through video conferencing. As regards the performance is concerned, yes, it is very nice. Good growth. Total revenue achieved with a tune of around INR 519 crores. It is an improved result. In comparison with the last year, about INR 498 crores as visible in the balance sheet under review. Profit after tax about INR 172 crores. EPS, INR 24.42. Yes, we being shareholders are very happy. The dividend is also there 155%. Yes, another thing, good CSR activities spend about INR 377.60 lakhs for the welfare measures. Sir, what is the key reason for lower profitability in spite of higher turnover, and steps taken to make sustainable growth of revenue. Kindly share your views. Finance costs increased. Borrowing in short term is also there. Steps taken to reduce debt and interest cost, kindly focus on the issue. Other expenses appears to be on higher side, sir. Kindly keep control to reduce peripheral expenses like traveling, car hire charges, miscellaneous, maybe done through video conferencing and others. About legal expenses, it's increasing, INR 215.98 lakhs. Sir, what measures -- last year it was also about INR 300 lakhs -- INR 397 lakhs maybe. So give reasons for such high expenses. Consider one plant visit, if it is possible, sir, so that we could see how the development and other infrastructures out there for the attending members, sir. I thank our company's Secretary also, Mr. Ajay Kumar Rai, well experienced, good investor services he is giving with his secretarial team. I also thank to all team members for such a wonderful video conferencing meeting today. Myself, Amit Kumar Banerjee. Over to you for further proceedings.

Thank you, Mr. Banerjee. I request the next shareholder, Shri Santosh Chopra, to raise the question. [Foreign Language] I think there is some technical issue from Chopra -- Mr. Santhosh Chopra's side. So can we move to the next shareholder, Mr. Jaydip Bakshi? So we'll request you to please log in and raise the question.

Yes. Very good morning, Chairman and Board of Directors. Myself, Jaydip Bakshi, connecting from the city of Kolkata. Sir, the initial speech was very much informative, and I'm myself proud to be a part of this leading e-commerce related service company. Sir, what are the steps we are taking to be a global leader in e-commerce? And what are the plans to increase India's share in the global commerce border trade business? And also the flagship projects like this recycling and scrap auctions and any other new other areas of opportunities are we thinking of. Sir, what are the benefits we are taking from the small- and medium-sized enterprises? And sir, vehicle scrapping facility we have in Guwahati and Bangalore, what is the end use? And can we plan to extend it to other places also? That's all from my side, and also thanks to my company secretary, Ajayji, for giving me an opportunity and for conducting this video conference in a smooth manner. I have casted my resolutions for all the resolutions. Thank you, sir, for giving me an opportunity.

Thank you, Mr. Bakshi. Now, we could request the next speaker, shareholder Shri Prakash Gunjan Buva.

Good morning, to all. My question, sir, as follows. What are the new platforms developed by the company recently? Question number one. Question number 2, that is, what revenue growth is expected in the next 5 years? Question number 3 is, what is the current status of MMRPL? How many vehicles are scrapped per month currently? How many plants does the company currently have for scrapping vehicles and capacity of each plant, also elaborating on future upcoming plants, in which states? Question number 4, also through some light on FSNL's strategic disinvestment status? Question number 5, what steps have been taken by our company in the digital economy to provide solutions, explain in brief. And question number 6 is, give some brief idea about startup company's business, how it will benefit MSTC, what revenue is expected from it.

Thank you, Mr. Buva. Now we can move to Shri Saurabh Ginodia. Mr. Saurabh Ginodia is not available. So we can move to the next shareholder, Shri Ashit Kumar Pathak.

Good morning, respected Chairman, MD, Board of Directors, Company Secretary, fellow members joining at 59th AGM of MSTC Limited. My name is Ashit Kumar Pathak, joining from Dum Dum, Kolkata. My esteemed gratitude to our Company Secretary, Mr. Ajay Kumar Rai, for sending me the hard copy of the Annual Report very well in advance and allow me to speak. Sir, your initial speech is very optimistic to my company's performances and future strategies and roadmap. Sir, financial performance, I noticed stand-alone basis, volume increased, but total income also increased, but profit after tax reduced to INR 17,191 lakhs against INR 23,923 lakhs. My view is that, we are -- mostly our percentage of business in e-commerce. I noticed e-commerce business slightly reduced. My view is that are we getting lower margin in e-commerce or think better margin in other business like recycling and trading business? Share your thoughts about this. Sir, circular economy is the -- I noticed here that we are focusing it mostly, so expected our business from this, share your thoughts about this. I noticed in mentioned that GeM portal reducing opportunities in exposure and trading business tapered down as policy matter and also cyber attacks you mentioned, so share your thoughts how we can mitigate these challenges with strong innovation and initiatives. Next, share your thoughts, our strategy is the changing business model to walk along new technology, where the customer approach is changing, and we have to develop our business model, so share your thoughts how we are going to develop our business model. Sir, share your thoughts about our expected revenue in vehicle scrapping facility and critical minerals and future prospects in this business. Are you thinking in -- about green energy and renewable energy and biofuels? Have you any business projection about these? Share your thoughts. I have -- just sharing my views, water is -- at present is a very, very precise situation, because in New York Stock Exchange, water is also trading as a commodity. So what about our thoughts about water conservations in future roadmap and strategies? And also waste management matters, share your thoughts about this. Sir, expected our total business by initiative, that is boarded start-ups and specified software companies and unique EXIM portals for all marketing companies, e-retail software solutions and MSME sectors. You mentioned that is very uprising. Share your thoughts about top line and bottom line doing this business. And also what we think our -- because our 100% subsidiary, Ferro Scrap Nigam is nicely achieved and near about INR 46,773 lakhs business achieved and profit after tax near about INR 6,492 lakhs achieved near -- against INR 3,833 lakhs. But what we are thinking about joint venture MMRPL? Because last financial year lost near about INR 1,374 lakhs against INR 531 lakhs previous year. And also, we had investment in MMRPL, also INR 4,581 lakhs. And further, we have infused INR 500 lakh in form of equity. So what we are thinking about this joint venture, not in up-to-date position, still now share your thoughts about this. My previous speaker also mentioned near -- about finance costs, finance costs also increased consolidated INR 41.20 lakhs against INR 914 lakhs and miscellaneous expenditure near about INR 840 -- INR 852.54 lakhs against INR 427.98 lakhs and bad debt written off. Mr. Bimal Kumar Sarkar also mentioned about this near about INR 10,269.91 lakhs, share these -- and our cost optimizations model, share your thoughts. That is very, very important because financial performance operating margin near about reduced to 90.07% against 96.57%, share your thoughts about this. And finally, I'd like to highlight how we compete with ONGC and global capacity center, where they are very encouraging exporters, and any other parameters. Share your thoughts, how we compete with ONGC. Because this is launched by Government of India, April 2022 and acts as an intermediatory between consumers and sellers, their business in these relations. So share your thoughts how we compete with ONGC. Nothing to say more, nicely -- our share distribution policy and also every member is getting 15.50% as a dividend is a good dividend paying company and a debt-free company. And total, there is a strong management team and only require investment in research and development and also maintain strong cyber security because 19th July, there is a very -- malware happening in Microsoft. So this is very -- most important. And research and development is mainly important, most for business perspectives because we are in e-commerce business strategies. Thanking you, sir.

Now we can request Shri [ Sebastian Jain ] to log in and raise his question. Mr. [ Jain ] is not here. So we can move to the next shareholder, Shri Krishnan P.S. Mr. Krishnan?

I just want to confirm you're able to hear me.

Yes, you're audible.

All right. Good day to the MSTC Board and management team. First, I would like to complement the Board and management team for the progress made by our organization in the e-commerce business, where we have successfully transitioned from a trading entity into a new age platform entity. I do have a bunch of questions, which I've shared much in advance and have kind of broken it down into 3 segments. The first segments would be around the e-commerce merchandise value in business. So I'd like to know what gross merchandise value is MSTC targeting for our e-commerce business over the next 3 years. Additionally, how does the company plan to achieve an exponential or a very nonlinear growth in the e-commerce segment during this period? And what steps or triggers have we taken or will be taken to drive a very exponential and a nonlinear growth in the e-commerce business? From a market size perspective, I'd also like to understand about the value of procurement and auctions conducted both in the central government and state governments as well as the related agencies. I will really appreciate if you can provide me a breakdown if possible now or maybe offline, a breakdown of the total value of procurement and auctions conducted by state government agencies and departments, central government public sector undertakings, central and state government departments, agencies and PSUs, and nationalized banks. And currently, what percentage of their procurement and auction activities are conducted through electronic boards? I mean the reason I'm asking this question is to try and understand the market potential and the market opportunity that MSTC has got because I do believe that predominantly, we are transitioning ourselves into more open e-commerce platform company rather than a typical trading organization. The second part of my query relates to revenues from customers. There's been a 15% decline in revenues in Q1 FY '25, which I understand is entirely attributable to Coal India Limited for the revenue drop. If so, does this imply that Coal India's routine business accounts for approximately 12% to 15% of MSTC's overall revenue? Or is it much higher? I really -- I'd like to get a clarification on that. I'd also like to know about the impact of CIL shifting their actions. With our key customer, Coal India Limited, moving its coal auction and linkage auction was its own portal, which has affected our revenues, what alternate revenue streams are MSTC aggressively pursuing to compensate for the loss? Furthermore, if other customers similarly decide to shift their e-procurement and e-auction activities in-house, how does MSTC plan to mitigate this risk and protect its existing customer base while continuing to grow its business? The third part of the query also relates to how does MSTC intend to continuously reinvent and innovative offerings to ensure that our customers remain loyal to our e-commerce services rather than migrating to in-house solutions and to our competitors. The last part of my query is on trade receivables. Do you anticipate any significant provisions for unpaid trade receivables in the near future, in the next 1 or 2 years? That's it from my end. I will really appreciate if you could respond to all of my queries. Thank you, and good luck.

Thank you, Mr. Krishnan. Now we can move to Mr. Atanu Saha.

I, Atanu Shah, is a shareholder of MSTC Limited. My respective Chairman and Board of Directors, our Government Nominee Director and all our shareholders, independent directors, our nonexecutive/executive directors, our auditors, scrutinizer registered and our committee, our remuneration, our stakeholder relationship, CSR, Audit Committee, and also Risk Management Committee and other committee's all members present in this virtual meeting and also our respective shareholders present in this 59th Annual General Meeting, it's -- today, it's 18th September 2024. As far as the agenda is concerned, it is ordinary, 1, 2, 3, 4. It is ordinary -- 4 ordinary, which is balance sheet, which is dividend, which is an appointment of directors, and also, it's also remuneration of auditor -- statutory auditor. And another special is it's our Manobendra Ghoshalji, who is Chairman and MD, has a reappointment and appointment of Government Nominee Director, V.K. Tripathiji. I already casted my vote. First of all, I did it. Sir, as far as our question and answer, it is our -- really our previous shareholder already raised number of queries. My just previous shareholder who informed the 3-way, it's really very great for us to hear such -- hear a number of queries on this platform, sir. Sir, it's -- my question is that sort of a CapEx plan till 2027, what would be our CapEx plan overall, 2027, sir? And, sir, matter of CARE Ratings, which is outlook, it's stable. Sir, I wish to know that matter of the ESG Rating because our company always maintaining a social and good governance related job, which is rotating economic situation. And the matter of sir, nobody -- it's -- point, the issue that the matter of, sir, it's sales. Its sales is really low, sir, really low. And sir, my question is what is ours in terms of competition? What's our competition we are facing, sir, mainly our peer company -- with our peer company and peer area? And sales low, sir. Sir, why and how we have utilized the A1 and related with R&D division and helping us to move more and more, generate revenue, sir. We wish a good year ahead with good results and good -- dividend is also our -- paying our company is really very good and also good health to our every employer. Already the employer award, someone on the shareholders raised their queries for good -- the paternal facility is also important for them who are. Anyhow, so before that, I leave, I wish to read Dr. H.P Kanoriaji because it might be I am the last one. Just 3 stanzas, sir. It is a universal prayer. Thou art our master, Thou art our soul’s real friend, guide us in our daily activities and lead us. Fearless, we are marching ahead to make Bharat. O God! never turn away from us, the children. We surrender our will at the altar of the will. We love thee and love -- we aspire for work, knowledge and devotion. Work, work, for the world. Love, love, love and bring. Sir, it's also good for us that our company is providing its beautiful dividend. Anyhow, I wish a good year ahead with good result and good health to every employer. Thank you, sir. I, Atanu Saha, now I am forwarding to our moderator. He is beautifully organizing this program. Thank you, sir. Have a good day. And also a get-together is very, very important, and all shareholders -- because this is no planned visit. There is no planned visit at all because it's completely working with our system, our A1, all Internet systems, so at least a get-together is for everybody. And please send to me -- I'm requesting our Company Secretary and our Board, please send me a hard copy to my address. Thank you very much. I, Atanu Saha, now forwarding to our moderator. Thank you, sir.

Thank you, Mr. Saha. We can now go back to Shri Santhosh Kumar Chopra. So if he is present here, he can raise his questions.

Am I audible, sir?

Yes, sir, you're audible.

Okay. Thank you, sir. There was some technical problem, so I could not -- thank you, Mr. Ajay, for giving me the chance again. Sir, I am a senior citizen from Delhi NCR, Kaushambi, Ghaziabad and have invested my family funds in companies like yours. I thank company Secretary, Shri Ajay Kumarji, and his entire team for giving me the opportunity by registering me as a speaker and sending link. I also congratulate him for giving speaker numbers for all our turns. Would -- I would have appreciated also if a call I would have received for technical clearance, if any. So I request Shri Ajay Kumarji to in future, you should give -- he should arrange a technical call from his technical team for speaker audios or unmute problem, et cetera. Sir, I support all the resolutions. I congratulate the company for excellent results. Congratulations for various awards also. Please continue VC meeting also as it is good for senior citizens like us from Ghaziabad. As most of my related queries have already been covered by the Chairman sir and previous speakers in their speeches, statements, I'll limit my queries to a few. Any impact of Union Budget on the operations of the company? What is CapEx in next 2 to 3 years? What is whistleblower policy of the company? Whether your CSR activities also include providing natural calamity sufferers also? Last but not the least, I wish management, all executives, entire workforce and my co-shareholder speakers happy festivities season ahead and pray to god for all prosperity of the company. Thank you very much, sir. [Foreign language]

Now we request Chairman, sir, to reply on the queries raised by the shareholders.

Good afternoon to all shareholders, stakeholders, our esteemed stakeholders in our company. All of you have raised very, very valid and very pertinent questions. And I'll try to go across in sets because there have been some common questions from all of you. So most of you have talked about what are the key objectives and priorities of our company, right? Also about the future plans and platforms that we intend to develop for taking the business forward. We have, over the last year, focused on developing different platforms for entities like PDCL, KPKB for the Chhattisgarh state forest portal; for the steel industry, steel import monitoring system; a portal for coal gasification, right; various integrations, including one with the Government of Kerala's Treasury with our portals. So all of these essentially are activities in the e-commerce sphere, which is where has -- which is what has been the main thrust of the company's activities over the last few years. As some of you mentioned, trading and recycling, of course, those are 2 other major activities for the company. As a matter of policy, we have come down on the trading activities and have been continuously increasing our e-commerce activities. Similarly, recycling is an area where we have gone into through a joint venture with the Mahindra's that is MMRPL. So that is essentially a venture which is for recycling of end-of-life vehicles. We have 7 recycling entities -- recycling plants and 33 different locations for -- which are collection centers. Now this is an area where a little concern has been raised about the venture not being in the green. So that is a start-up phase, that is a phase in the beginning. Now MORTH has issued guidelines, which are in the process of being adopted by different states. And as and when these guidelines get adopted in a phase manner, so the rising of vehicles also increases, and that would create a better utilization and better arising of vehicles, which would be available for recycling. We expect to see an uptick in the next 2 or 3 years due to various policy initiatives, including that of the EPR policy, which is also being considered by the government. Now there was a mention of what is the AI technology that we would be including in our platforms. So all such new technology such as AI, data mining, using data for giving value-added services to our clients are a part of e-commerce platforms. So upstream and downstream value-added services is what we would be increasing based on newer technologies. As far as some financial parameters, I would like to ask DF to briefly comment on those.

Good afternoon to everybody. I go by serial term. First, you have -- our esteemed shareholders have raised a concern about the writing of the bad debt. Here, I would like to apprise the shareholders that it has got no impact on the profitability because, the same amount, it is just a book entry because already we have provided for all the bad and doubtful debts available. And currently envisage, no further provisions as of now. So this is a book entry where same amount is appearing as a provision, no longer requires return back, so having no impact on the profitability of the company regarding the written off the bad debt at financial year '23-'24. I repeat no impact on the profitability for the financial year '23-'24 due to this. This is a book entry. Number two, regarding the loan. So the loan figures are all sub judice as appearing in the books of accounts with proper notes, like one from Standard Chartered and one from Indian Overseas Bank. And accordingly, the figures have not changed. It is same as our previous figure. Number three, regarding the finance cost. So for finance cost is concerned, it is nearly INR 41 lakhs. It is interest paid to our customer. So it is a very, very meager amount as compared to our EBITDA/PBDIT of INR 292 crores, and it is only INR 0.41 crores. And so far the legal expenses are concerned, so we have reduced it -- we have reduced the figure from INR 297.69 crores for the last financial year to INR 215.93 crores that is INR 2.97 crores to INR 2.15 crores. And these expenses pertain to various litigation the company is entangled with. And it is a part of the business environment. When you conduct a business, there might be some kind of litigation and which is the major litigations and all these things. Figures are already appearing in the balance sheet, is a contingent part. So that is happening over there. And in case of foreign travel, it is a very meager amount. It was a travel for business travel and for a business seminar. So that is all good. And so for miscellaneous expense is concerned, like major part of the group miscellaneous expense comprises of our subsidiaries' expenses. So far ours are concerned, it is around INR 1 crore. And it basically comprises of -- normally of contractual employees that were employed during the year to maintain the functions. So, so far, I think -- and again, I repeat, as of now, we do not see like any kind of further provisioning in the trade receivables in the current year so far, as of now, we envisage. And so far, regarding the profitability is concerned, I would like to clarify that our PBT on a stand-alone basis has gone down from INR 313 crores to INR 284 crores, but the PAT has shown a major change in spite of that, INR 239 crores to INR 171.92 crores. The major reason is like we have gone for a lower tax regime this year of 25.168% at the current rate of 34.944%. For that, we have to make a one-time adjustment in the deferred tax asset, so that is to the team of around INR 37 crores. That is the one-time adjustment so far PAT is concerned. And so far, your question regarding that [indiscernible] and et cetera is concerned, so we are so far a little bit of employee expenses -- increase in employee expenses. And added to that some loss of revenue in the operation part has made that we have made lesser level of operation and lesser profit in the -- this year. And so far the CapEx plans are concerned, so it -- basically, MSTC is an asset-light company, so we do -- are planning to have a kind of upgradation, continuous, CMD sir, and always it is an endeavor for the company to go for technological upgradation. So our main CapEx will be focused on that. Apart from that, we are trying to acquire some fixed assets, fixed properties for our good office purposes so that we can have a better business environment to attract customers and give them better services. That will be the major outlook so far CapEx is concerned so far. And now I hand over it to CMD sir.

Now coming back to the growth assumptions that -- growth assumptions and the roadmap for the next 2, 3 years in terms of what kind of revenue growth. So we would be looking to maintain the CAGR over the next -- over the last 4 to 5 years at approximately the same levels. As far as the roadmap is concerned, we would be leveraging the expertise that we already have in the e-commerce domain. And as I also mentioned, looking at adding upstream and downstream services so that we can give better value to our customers. Our CapEx plan, as Mr. Sarkar, our DF [Foreign Language] mentioned, we are essentially an asset-light company. And so, therefore, there would be no major CapEx other than some assets in terms of locations as well as maintaining our -- basically servers and our hardware. Looking at -- in fact, this mention of ESG rating also came up by a couple of our shareholders. So essentially, we have not done a formal assessment benchmarking of the ESG rating of the company. But having an assessment, it would be in the range of 85 to 90. But, however, this is a very good suggestion. We would be looking at getting a formal ESG rating -- benchmarking done in the future. As far as becoming the global -- one other thing that we would mention as we have -- we are in the process of -- we have acquired office space in Delhi, which would basically be looking at business in the -- which would be for consolidation of our business in the northern region. So that is an area where we would have a certain amount of CapEx -- significant CapEx expenditure. Now as far as the question of being a global leader is concerned, we have basically been the pioneers of taking e-commerce, particularly auctions from the physical to the digital space in the country over the last 15 years. And we would be looking at suitable opportunities as and when they come up for proliferating e-commerce offerings abroad as well. As far as the mention about the gross merchandise value that MSTC would be targeting at, now let me make this clear that our company's revenue is not directly proportionate to the gross merchandise value. As such, the focus is on maintaining the service revenue in terms of the CAGR that has been there over the past few years and targeting a growth in the same. Now there was also a question of the value of procurement or auctions and the breakdown of the business that is available in this country. Now procurement values or auction values by government departments, CPSCs or state government entities is specific and maintained by that sector and by that entity. It is also completely dynamic on multiple factors, such as government policy allocations. So that would be a very large amorphous kind of data, which would be available at multiple -- from multiple sources, not just... In terms of the impact of -- how we intend to continuously reinvent and innovate our offerings, what I would like to tell you is that our continuous endeavor has been to make the user interface simpler for both the sellers and the buyers. So this would be essentially the fact that would be helping us to retain and grow our seller base. And through this, since we already have a very large buyer base and a buyer base which gets a large area of services, so the seller also, therefore, gets the best value for goods and services when they transact through our portals, so that has been our USP and that is something that we have continuously been trying to build upon. I will request our Director of Commercial to also...

Yes. There was one specific question regarding the loss of business from Coal India. Coal India, in fact, it was asked whether the 15% the downward trend in the Q1 of this year. This is an area that probably we will be able to address in the next AGM because this is an ongoing process. But one thing that I can tell you is that the businesses are very dynamic in nature. We always lose some business, we always win some businesses, so there are a lot of businesses that are lined up and it will be a little too early for us to speak about those businesses. It will obviously be translating to revenue. And, obviously, when we see those balance sheets and profit and loss statements, we'll be able to critically tell you as to how the -- what we lost and what we gained. Now, as far as the -- how we are going to retain our customers, as our CMD had said that we will be looking up at upstreaming and downstreaming the services, one major thing that we are looking at is most of our clients, especially the large clients have their own databases. So the user interfaces are now made so automatic, and the integration with those host servers are being made for APIs that the automation and human intervention is vastly reduced. Secondly, there's no loss of data. Thirdly, the service or the user experience is much better. The service delivery is much quicker. The decision-making as is at the client's end is much better. So these value-added services definitely would lead to retaining that customer. One example that we were talking about is the integration with the Kerala's treasury department. So through this integration, we envisage that almost 40,000 smaller offices of the government of Kerala will be able to access our services in a very seamless fashion. That may be just a drop in the ocean, but because of the sheer volume, this will scale up to good revenues in the future. Similarly, there was a question regarding the small and medium enterprises. For them also, we are planning to build such platforms so that they can onboard very easily and transact even very small volume of businesses. So this is going to be our focus area in this year. And obviously, the revenues will be kicking in for this. Thank you.

There were 2 other things that I thought -- let me briefly mention. There was a lot of interest in what we are doing in green and sustainability initiatives, water conservation and so on and so forth. So let me also -- our business, MSTC's business is basically sector-agnostic. So since there has been a lot of investment, a lot of interest and a lot of work being done in green initiatives and sustainability initiatives by local bodies, by government, so there, we do see an opportunity of getting into the sector in terms of digitizing the processes that any of these companies or any of these bodies would be using to sustain -- for moving forward these initiatives. The other point that I thought there was -- there were a couple of questions about FSNL. So FSNL is 100% owned subsidiary of MSTC. And there has been a lot of interest in the disinvestment process. Now that is being conducted by the Government of India, the -- by DIPAM. As and when there is any further update about it, we will bring it to the notice of the shareholders.

Thank you, sir. We hope that we are able to reply all the queries raised by the shareholders. The proceedings of the AGM is recorded and will be posted on the website as well as on the website of the NSDL, and we will also try to post the questions raised by the shareholders and the reply on our website of the company. For now, we would like to thank all the shareholders who have participated in our Annual General Meeting of the company. And with that, with a vote of thanks, we'd like to conclude this Annual General Meeting of the company. And we'd like to inform that the combined result of the remote e-voting and e-voting of the AGM will be declared in accordance with the provisions of the Companies Act, 2013, and will be uploaded on the company website as well as on the NSDL and stock exchange website. With that, we will now declare that the meeting is concluded. The results will be declared within 48 hours from the conclusion of the meeting. Thank you very much. Thanks.

Thank you.