Notes:
a) Disposal of Leasehold Land represents amortisation of Prepaid Lease Payment.
b) Companies Residential Building & Office Flats at Mumbai and Residential flats at Kolkata are under attachment by an order of DRT, Mumbai.
c) The cost of captalisation of Corporate Office Building of Company on the date of completion is as approved by Board of Directors; project closure and settlement with the PMC has been done during FY 2022-23.
d) TheTitle Deed of the immovable property are held in the name of the Company.
e) All assets, wherever applicable have been duly registered with the Registrar of Companies forthe charges.
f) At the time of implementation and adoption of IndAS w.e.f 1st April, 2015 in terms of IndAS 101, the Net Block of Assets was considered as Gross Block treating Accumulated Depreciation on that date as "NIL". Depreciation has been charged since in terms of Companies Act, 2013. Hence, the Accumulated Depreciation represents cummulative figures since 1st April, 2015 only. Due to this, there are differences in the figure of Gross Block and Accumulated Depreciation between the Fixed Assets schedule as above and Fixed Assets Register. However the Net Block figures are in complete agreement with Fixed assets Register.
g) For restatement of addition and depreciation in respect of FY 2021-22. Please referto Note-35 under lndAS-8.
h) Freehold Buildingotherthan RCCStructure represents Steel Structure.
a) During F.Y. 2022-23 MSTC Limited have invested ? 140.00 Lakhs (Previous Year? 600.00 Lakhs) towards unquoted equity contribution in Mahindra MSTC Recycling Private Limited, comprising of 14 Lakhs shares of Face value of ? 10 each ranking pari pasu with the existing investment in similarshares.
b) The shareholders of MSTC Limited in an Extra-Ordinary General Meeting dated 22nd December 2021 have decided to sell the entire stake in Ferro Scrap Nigam Limited (FSNL). Accordingly the process forsale has a I ready started.
Due date of Trade Receivables is considered from the date of Bill.
8.2: The Current Borrowings include ? 14,361.97 Lakhs (Previous period ? 14,361.97 Lakhs) towards payment made by Standard Chartered Bank (SCB), after purchasing of export bills of MSTC raised on foreign buyers against the export of Gold Jewelries to the buyers during 2008-09, under a Receivable Purchase Agreement. On non-receipt of the proceeds from the foreign buyers against the bills, SCB submitted claims with the Insurance Company, who, however, wrongfully repudiated the claim of SCB. Thereafter, SCB converted the receivables purchased from MSTC under the Receivables Purchase Agreement into loans/ debts as if owing by MSTC, claimed the amount from MSTC with interest and filed a case, being the Original Application in the Debt Recovery Tribunal (DRT), Mumbai in the year 2012, which MSTC has denied and disputed. The validity of the claim of SCB against an Interim Order passed by the DRT, Mumbai on 16th September, 2017 has been challenged by MSTC byfilinga Misc. Appeal before the Debt Recovery Appellate Tribunal (DRAT), Mumbai. The said Miscellaneous Appeal was turned down by DRAT on ground of delay in filling. Subsequently, the said appeal was restored by Hon'ble Bombay High Court byway of condonation of delay. SCB had challenged the decision of Bombay High Court through special Leave petition (SLP) in Hon'ble Supreme Court of India. The said SLP was dismissed. Accordingly, appeal stands restored with DRAT, which is currently pending. MSTC has already deposited ? 9,000.00 Lakhs with DRAT as pre-deposit towards hearing of appeal. DRAT has directed status quo in the recovery proceedings as on date. Other proceedings challenging the claim of SCB are also pending before various forums including in the Civil Court at Alipore, Kolkata initiated by MSTC both against SCB and the Insurance Company. SCB had also filed a Summary Suit in late 2012 in the Hon’ble Bombay High Court against ICICI Lombard claiming the same amount under the Policy from ICICI Lombard on account of the repudiation of the claim of SCB by ICICI Lombard.The claim of SCB is contingent upon the outcome of the legal cases. Pending final disposal of all such court cases where the matters are currently pending, MSTC has disclosed the amount simultaneously as Borrowings (vide Note No-18) and as Trade Receivables.
MSTC has initiated all steps including legal action to realise the dues from the above customer. The related cases are pending before adjudicating authorities at various levels.
8.5: Trade Receivables include ? 18,692.99 Lakhs (Previous Year ? 24,826.59 Lakhs), against business done in facilitator mode (net of provision).
8.6: Trade Receivables include ? 4,842.18 Lakhs (Previous Year ? 6,058.35 Lakhs), against E-Commerce business (net of provision).
13(a)(ll): Rights, preferences and restrictions attached to equity shares.
The Company has only one class of ordinary shares ('Equity Shares') having a face value of ? 10 each. Each holder of ordinary shares ('Equity Shareholders') is entitled to one vote per share and are entitled to dividend and to participate in surplus, if any, in the event of winding up.
13(a)(iii): 88,00,000 bonus shares have been issued during F.Y 2016-17 in the ratio of 1:1 13(a)(iv): 1,76,00,000 bonus shares have been issued during F.Y 2017-18 in the ratio of 1:1 13(a)(v) : 3,52,00,000 bonus shares have been issued during F.Y 2018-19 in the ratio of 1:1
a) #Loan from Indian Overseas Bank (IOB) amounting to ? 138.23 Lakhs: (lying since 19.9.2011). This amount represents legal fees paid by the bank in defending their claims to which the Company has lodged its protest with the Bank. MSTChas filed a case in Hon'ble High Court of Calcutta against IOB for ? 3,656.00 Lakhs (which includes ? 2,798.00 Lakhs towards debit of LC value & ? 858.00 Lakhs as debit towards legal expenses).
b) The Current Borrowings include ? 14,361.97 Lakhs (Previous period ? 14,361.97 Lakhs) towards payment made by Standard Chartered Bank (SCB), after purchasing of export bills of MSTC raised on foreign buyers against the export of Gold Jewelries to the buyers during 2008-09, under a Receivable Purchase Agreement. On non-receipt of the proceeds from the foreign buyers against the bills, SCB submitted claims with the Insurance Company, who, however, wrongfully repudiated the claim of SCB. Thereafter, SCB converted the receivables purchased from MSTC under the Receivables Purchase Agreement into loans/debts as if owing by MSTC, claimed the amount from MSTC with interest and filed a case, being the Original Application in the Debt Recovery Tribunal (DRT), Mumbai in the year 2012, which MSTC has denied and disputed. The validity of the claim of SCB against an Interim Order passed by the DRT, Mumbai on 16th September, 2017 has been challenged by MSTC by filing a Misc. Appeal before the Debt Recovery Appellate Tribunal (DRAT), Mumbai. The said Miscellaneous Appeal was turned down by DRAT on ground of delay in filling. Subsequently, the said appeal was restored by Hon'ble Bombay High Court byway of condonation of delay. SCB had challenged the decision of Bombay High Court through special Leave petition (SLP) in Hon'ble Supreme Court of India. The said SLP was dismissed. Accordingly, appeal stands restored with DRAT, which is currently pending. MSTC has already deposited ? 9,000.00 Lakhs with DRAT as pre- deposit towards hearing of appeal. DRAT has directed status quo in the recovery proceedings as on date. Other proceedings challenging the claim of SCB are also pending before various forums including in the Civil Court at Alipore, Kolkata initiated by MSTC both against SCB and the Insurance Company. SCB had also filed a Summary Suit in late 2012 in the Hon’ble Bombay High Court against ICICI Lombard claiming the same amount underthe Policy from ICICI Lombard on account of the repudiation of the claim of SCB by ICICI Lombard.
The claim of SCB is contingent upon the outcome of the legal cases. Pendingfinal disposal of all such court cases where the matters are currently pending, MSTC has disclosed the amount simultaneously as Unsecured Borrowings and as Trade Receivables (vide Note No. - 8.2).
(a) Due date is from the date of billingand/orfrom the date of accounting, asthe case may be. There is no disputed dues.
(b) * Includes? 316.38 Lakhs (Previous Year? 297.27 Lakhs) towards provision for pension benefit of employees and? 940.00
Lakhs (Previous Year? 1,436.00 Lakhs) towards wage revision of the employees duefrom 1st January, 2017.
(c) Both as at 31st March, 2023 and as at 31st March 2022 , there is no interest and overdue payment of more than 45 days outstanding to Micro, Small and Medium Enterprises (MSME).
(d) The wage agreement has been reached for wages for non-executive employees, due for revision w.e.f. 1st January, 2017. Consequential adjustments provision for?496.00 lakhs byway of reversal onthisaccounthasbeen made in the Books of Accounts.
(e) For restatement of Liabilities in respect of Financial Year 2021-22, please refer to Note-35 under I ndAS- 8.
(a) During the year, an amount of ? 1,137.90 Lakhs (Previous Year ? 995.25 Lakhs) was collected towards E-auction Registration. Out of total collection of current year, an amount of ? 910.32 Lakhs (Previous Year? 829.38 Lakhs) has been kept in liabilities to be distributed in subsequent four years as per accounting policy, since related registration is valid for life long. Accumulated undistributed balance standing as on 31st March, 2023 is ? 1,709.84 Lakhs (Previous Year ? 1,275.55 Lakhs). Balances for which registration is valid uptooneyear is accounted for as income duringthe current period.
(b) Other Operating Revenues also include Interestfrom customers ? 1,900.43 Lakhs (Previous Year? 3,040.38 Lakhs).
The tax rate used forthe year 2022-23 and 2021-22 in the reconciliations above is the corporate tax rate of 34.944% payable by corporate entities in India on taxable profits under the Indian tax law. For Deferred Tax calculation of financial year 2022-23, income tax rate of34.944%.
The company has a MAT credit of? 972.95 Lakhs (Previous Year-?3,090.97 Lakhs) for which company is entitled to credit in next assessment years against tax payable on income for those years. The Company feels that it will earn sufficient profit in coming years. Accordingly, Deferred Tax Asset has been recognised for MAT credit entitlement. However no Deffered Tax Asset has been recognised on the provision for Doubtful Debts of NIL (Prevyear?3,555.25 Lakhs) as a conservative approach.
Duringtheyear, an amount of Nil (Previous Year? 10.47 Lakhs) has been deposited under Direct Tax VivadSeVishwas Act, 2020. The company did not adopt new Income Tax Rate specified under section 115BAA and continued to apply normal Income Tax Rate.
Note: The project closure of corporate office Building at Kolkata has been approved by the Board of Directors of MSTC in their 316th meeting held on 10th August, 2022, with an approval for additional cost of ?167.23 Lakhs. Accordingly, the settlement has been done with the PMC Agency. The same wasalready put to use duringtheF.Y2021-22 following completion of the projectw.e.f. 20th July, 2021 with cost? 5,297.00 Lakhs duly approved by the Board of Directors. The depreciation attributable to this additional cost for F.Y 2021-22 is? 3.70 Lakhs. In order to give that effect, the Gross Block, Net Block, Liability towards PMC payment, Other Equity, Depreciation, Profitand Total Comprehensive Income has been restated as at 31st March, 2022 andfortheyearended 31st March, 2022.
36. Disclosures on Financial Instruments
This section gives an overview of the significance of financial instruments for the Company and provides additional information on Balance Sheet items that contain financial instruments. The details of significant accounting policies, includingthe criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in notes to the Standalone Financial Statements.
(1) Categories of Financial Instruments
The following table presents carrying amount and fair value of each category of financial assets and liabilities as at the year end. The Fair value is equivalent to the Carrying value.
(2) Capital Management
The Company manages its capital to ensure that the Company is able to continue as going concern while maximising the return to shareholders through optimisation of the debt and equity balance. The Company is not subject to any externally imposed capital requirements.
(3) Financial Risk Management Objectives
The Company's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the fianancial risks relating to the operations of the Company. These risks include market risks (like- currency risk, interest rate risk and other price risk), credit risk and liquidity risk. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into transactions involving trade of financial instruments, including derivative financial instruments, for speculative purposes.
(a) Market Risk
The Company's activities exposes it, primarily to the financial risks of changes in foreign currency exchange rates. On a case to case basis, the Company enters into Forward foreign exchange contracts to hedge the exchange rate risk, as and when necessary.
(i) Interest Rate Risk Management
The Company converts maximum of its loan to MCLR based, with the rate being firm for a contract period usually for a year, as and when necessary.
(ii) Foreign Currency Risk Management
The foreign currency exposure of the Company is due to import liabilities, if any. Transactions are on back to back basis with customers. The gain and loss if any is passed on to the customer. Sometimes forward cover is taken to hedge the related foreign currency exposure in terms of discussion with the customer. Wherever foreign exchange fluctuations are to be borne by the customers as per agreement with them, foreign exchange gain/ loss are not recognized in the books of the Company.
(b) Credit Risk Management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company only transacts with entities that are rated by agencies where available and if not available, the company uses other publicly available financial information and its own past records to rate its major customer. The Company's exposure and the credit ratings of its counterparties are monitored and the aggregated value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the Senior management committee. Furthermore, in case of Marketing Segment, the business is done with back up of Bank Guarantee.
(c) Liquidity Risk Management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, if required, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liablities.
The table below provides details regarding the contractual undiscounted cash obligations of financial liabilities includingestimated interest paymentsforthe period 31st March 2023, and as at 31st March 2022.
38. Employee Benefits
Defined Contribution Plans
1. Provident Fund
An amount @12% of Basic Pay and Dearness Allowance is contributed to the Provident Fund Trust by the Company.
2. Pension
In terms of Ministry of Steel Directives, Pension Scheme for the employees of MSTC has been formulated, under Defined Contribution Plan. The Company contributes annually to LIC of India through a Trust. LIC will provide the pension to the employees from the corpus created on account of employees.
Defined Benefits Plans
1. Gratuity:
The Gratuity is payable on service severance in respect of eligible employees.
(a) Executives:
The Gratuity is calculated and paid as perthe Payment of Gratuity Act, 1972.
(b) Non Executives:
The Gratuity is payable as perthe Payment of Gratuity Act, 1972 except for:
(i) The Gratuity is calculated at the rate of one month's wages last drawn by the employee for every completed years of service in excess of 30 years
(ii) In case of employees whojoined before 1st July 2014, the Gratuity is payable without any ceiling.
2. Post Retirement Medical Benefit:
The Post Retirement Medical Benefit is a medical benefit to the superannuated employees and their spouse. The members are covered through Group Mediclaim Insurance of the Insurance Company. This is available to superannuated employees at any hospital underthe Group Mediclaim Insurance Policy. In addition to the expenses incurred in domiciliary treatment is also reimbursed as per prescribed scheme. The benefits are funded through a separate trust formed for this purpose. The Company provides the corpus for this. Deficit, if any, is being compensated by the Company.
Note -1 Current Ratio has improved due to better liquidity on account of higher profit and cash realisation.
Note-2 MSTC do not have any long-term debt, hence, not applicable.
Note-3 MSTC do not have any long-term debt, hence, not applicable.
Note - 4 Although the Profit (PAT) has increased but the ratio has decreased on account of increase in Total Equity. Note - 5 MSTC do not have any inventory, hence, not applicable.
Note-6 Trade Receivable Turnover Ratio increased due to reduction in Trade Receivable.
Note-7 Trade Payable Turnover Ratio decreased dueto reduction in purchase of goods and services.
Note - 8 Net Capital Turnover Ratio decreased due to reduction in sale of goods and services.
Note - 9 Net Profit Ratio has increased on account of higher profit.
Note-10 The ratio has increased dueto increase in profit.
Note -11 Although the Profit (PAT) has increased but the ratio has decreased on account of increase in Total Equity.
(c) There is no related party transaction involved in CSR expenditure.
(d) Above figures are disclosed separately in note no 28 (z).
41. Balances of Trade Receivables, Trade Payables and Advances includes balances subject to confirmation / reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.
42. The shareholders of MSTC Limited in Extra-Ordinary General Meeting dated 22nd December, 2021 have decided to sold the entire stake in Ferro Scrap Nigam Limited (FSNL). Accordingly the process for sale has already started.
43. The company did not have any unrecorded transactions in the Books of Accounts which have been surrendered or disclosed as income during theyear in the tax assessments underthe Income Tax Act, 1961.
44. The company has not traded or involved in Crypto or Virtual currency duringtheyear.
45. The Board of Directors of the Company adopted the Financial Statements in SIS'* Board Meeting held on 23"1 May, 2023.
46. The Board of Directors of the Company in its 319th Meeting held on 23"1 May, 2023 has proposed a final dividend of '3.20 per share in respect of year ending 31st March, 2023, @ 32% on equity share capital which is ? 7,040.00 Lakhs as on date. The payment of Dividend is subject to approval of shareholders at Annual General Meeting. If approved it will result in a cash outflow of? 2,252.80 Lakhs.
47. The figures for the corresponding previous years have been regrouped / reclassified wherever necessary to make them comparable.
In terms of our report of even date.
|