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42ok¡ okf"kZd izfrosnu 2014-1542nd ANNUAL REPORT 2014-15

esdkWu fyfeVsM] jk¡ph - 834002MECON LIMITED, RANCHI - 834002

CORPORATE VISIONTo strive to be a leading engineering, design and consultancy organisation with global presence.

CORPORATE MISSIONTo function as an internationally recognized centre of excellence for providing reliable and quality engineering services in the field of:

a) Technical consultancy – design and engineering with focus on metal sector.

b) Design and supply of plant, equipment and systems with focus on metal sector.

c) Implementation of raw industrial ventures from concept to commissioning.

d) Up-gradation and expansion of existing plants and infrastructure facilities.

Board of Directors

Shri A.K. TyagiChairman-cum-Managing Director

Shri Vinod Kr. Thakral, IASDirector

(upto 12.03.2015)

Smt. Bharathi S. Sihag, IASDirector

(w.e.f. 16.03.2015)

Shri Syedain Abbasi, IASDirector

Shri M.N. SharifDirector (Technology)

(upto 31.10.2014)

Shri S. S. TorkaDirector (Engineering)

(upto 31.10.2014)

Shri S. ChattopadhyayDirector (Project)

Shri Deepak DuttaDirector (Commercial)

Shri S. R. SenguptaDirector (Technology)

(w.e.f. 01.11.2014)

Shri A. P. SinghDirector (Engineering)

(w.e.f. 01.11.2014)

esdkWu eq[;ky;] jk¡phMECON Head Office, Ranchi

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42nd ANNUAL REPORT 2014-15

A house of engineering excellence ...aiming beyond

CONTENTSParticulars Page No.

Board of Directors 6

Chairman’s Speech 7-11

Director’s Report 12-42

Disclosure of particulars of contracts/arrangements with related parties 43

Extract of Annual Return in Form MGT - 9 44-50

Details on CSR & Sustainability activities during 2014-15 51-72

Particulars with respect to Technology Absorption 73-74

Management Discussion & Analysis Report 75-83

Report on Corporate Governance 84-90

Independent Auditor’s Report for the Financial Year 2014-15 91-98

Comments of the Comptroller & Auditor General of India 99

Balance Sheet as at 31.03.2015 100

Statement of Profit & Loss for the year ended 31.03.2015 101

Cash Flow Statement for the year ended 31.03.2015 (Indirect Method) 102-103

Notes including Significant Accounting Policy, Segment Reporting & Form AOC-1 104-142


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BOARD OF DIRECTORS

Chairman–cum–Managing DirectorShri A.K. Tyagi

DirectorsShri M.N. Sharif, Director (Technology) (upto 31.10.2014)

Shri Subir Chattopadhyay, Director (Project)

Shri S.S. Torka, Director (Engineering) (upto 31.10.2014)

Shri Deepak Dutta, Director (Commercial)

Shri S.R. Sengupta, Director (Technology) (w.e.f. 01.11.2014)

Shri A.P. Singh, Director (Engineering) (w.e.f. 01.11.2014)

Shri Syedain Abbasi, IAS, Director

Shri Vinod Kumar Thakral, IAS, Director (upto 12.03.2015)

Smt. Bharathi S. Sihag, IAS, Director (w.e.f. 16.03.2015)

Company SecretaryShri Ravi Bambha

Deputy General Manager I/c (Finance)Shri R.H. Juneja

AuditorsM/s V.K. Jindal & Co.Chartered Accountants,3rd Floor, Shree Gopal Complex,Court Road,Ranchi- 834001 (Jharkhand)

BankersState Bank of IndiaUnion Bank of IndiaIndian Overseas BankCanara BankUnited Bank of IndiaBank of IndiaIDBI BankAndhra BankIndusInd BankICICI BankAxis BankHDFC BankYES BankBank of Baroda

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CHAIRMAN’S SPEECH AT THE FORTY-SECOND ANNUAl GENERAl MEETING

Gentlemen,

I am glad to welcome you to the Forty-second Annual General Meeting of your Company. The Directors’ Report and the Audited Accounts for the year ending 31st March, 2015 along with Statutory Auditor’s Report and comments of Comptroller and Auditor General of India thereon, which are already with you and with your permission, I take these as read.

I take this opportunity to update you on your Company’s performance in the past year and share our strategy for the future.

PHySICAl PERFORMANCE

This year MECON completes 56 illustrious years of contributing to the socio-economic growth of the country. Along with securing plethora of jobs in the diversified fields of Metals, Power, Oil & Gas and Infrastructure, we have successfully completed many challenging projects which are a testimony to your Company’s technical expertise in diversified fields.

On the business front during the fiscal year your Company secured new business of ` 593.40 crores

which includes ` 438.16 crores from Metals Sector and your Company’s intense focus on augmenting its non-metal sector business has met with considerable success with ` 155.24 worth of business from other sectors.

The fiscal year 2014-15 has been marked with a number of achievements. Salient among these are :

IN THE METAlS SECTOR

It gives me great pleasure to inform you that Hon’ble PM dedicated to the nation the Expansion and Modernisation of RSP where MECON rendered complete Design, Engineering and Design Supervision services

Your Company secured the project of providing EPCM Services for construction of 2 Mtpa Pellet Plant at Nagarnar for NMDC limited.

India’s largest Blast Furnace (Kalyani), BOF Convertor and lime Dolomite Calcination Plant at IISCO Steel Plant of SAIl and Benzol Recovery & Distillation Project of Vishakhapatnam Steel Plant, RINl were successfully commissioned.

The 7m tall Coke Oven Battery#6 of Rourkela Steel Plant, SAIl was successfully commissioned.

Hot trials of Continuous Casting Machine and Bar-Mill of IISCO Steel Plant of SAIl were completed and successfully commissioned.

Sinter Machine and New Coke Oven Battery#11 of Bhilai Steel Plant, SAIl have both been successfully commissioned.

In Mining field, the sheer number of prestigious mining assignments being handled by your


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Company for NMDC, SAIl, OMC, UCIl and other valued clients in the country is a testimony to MECON’s technological and engineering expertise in mining and beneficiation of various minerals/ores. It is also a matter of pride that your Company is the only organization in the country to have given consultancy services for as many as 14 different types of minerals. Your Company also had the following achievements this fiscal year in this area:

Secured several projects – some of them are

Beneficiation and pellet plant project for Gua iron ore mines of SAIl

Engineering and consultancy services for beneficiation plant and slurry pipeline for NMDC at Chattisgarh.

Consultancy for Beneficiation and pellet plant for Odisha Mining Corporation limited at Gandhamardan apart from several other orders related to the development and scaling up of the production of their Iron Ore and Manganese mines

NMDC’s crushing and conveying system for Deposit 11B at Kirandul was commissioned successfully. The system augments the mining capacity by 7 Mtpa.

As substantiation of the technical expertise in the mining field, your Company received an award for “Mine Planning and Design”, presented by Indian Bureau of Mines during the “22nd Mine Environment and Mineral Conservation Week”.

In the Oil & Gas Sector, City Gas Distribution Projects are presently the most challenging business. Your Company has recently been awarded a spate of CGD projects on nomination basis which is a reflection of the trust reposed in us by our valued clients. The significant achievements here have been:

Securing the CNG and City Gas Distribution Project in Bengaluru City for GAIl Gas. The project is of very high strategic importance for GAIl Gas and has a very tight time schedule.

Securing an overseas assignment for providing Detailed Engineering and Consultancy Services for Installation of 10 Km long Onshore Gas Trunk Pipeline of Bin Omer Oil Field Yamamah Formation in Iraq, for Offshore Construction Specialists Pte limited, Singapore.

Your Company successfully commissioned the 93 Km Multiproduct pipeline and Receiving Station and Terminal of Awa-Salawas Pipeline of Hindustan Petroleum Corporation ltd. where the scope constituted mainly Design, Engineering, Construction & Project Management.

In the Power segment, the major developments have been

Securing assignment for providing Consultancy services for Kodayar Hydro Power House-I (1x60 MW) for TANGEDCO, Chennai

Securing assignment for rendering Detailed Engineering & Consultancy services for one Turbo Blower for Visakhapatnam Steel Plant, RINl. The project is under execution.

Both units of the 2x500 MW Power Plant of NTPl, for which your Company provided Detailed Engineering, Consultancy and Project Management Services, were successfully synchronized with the Grid and commercial operation of one unit declared.

In Infrastructure sector the major developments have been

Securing assignment from Oil and Natural Gas Corporation limited, Uran for providing Techno Commercial and Environmental Feasibility Study for setting up a Desalination Plant at ONGC, Uran Plant. The project is under execution.

Successful completion of Phase-I of Modernization of Central Ordnance

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Depot, Agra for Minsistry of Defence. Your Company provided Engineering and Project Management Consultancy Services (EPMC) for the project.

FINANCIAl PERFORMANCE

The turnover for the year under review was ` 38,991.60 lakhs vis-à-vis ` 34,129.06 lakhs in the previous financial year with Profit before tax at ` 3,300.72 lakhs vis-à-vis ` 6,869.30 lakhs for the previous year. The Reserve and Surplus of the Company has increased to ` 37,992.14 lakhs for the year against ` 37,413.62 lakhs for the previous financial year. However, the net worth of the Company has witnessed a marginal decline to ` 40,887.44 lakhs for the year against ` 41,679.92 lakhs for the previous financial year.

like the past financial year, your Company has declared dividend at the rate of 20% to the equity shareholders, amounting to ` 802.77 lakhs and also dividend @ 5% on Preference Share Capital amounting to ` 106.32 lakhs.

ENvIRONMENT MANAGEMENT & SAFE INDuSTRIAl PRACTICES

Your Company understands its responsibility towards the environment and society, and so also focuses on other tangibles like value addition in terms of improved efficiency and environmental protection etc. At a time of challenges due to possible climate change, your company has endeavored to adapt and rethink the energy efficiency, safety, resource conservation, zero discharge and waste control measures for its existing as well as upcoming future projects. To achieve this, your Company gives particular attention to efficient use of materials, energy and environmental management during the project implementation phase and has put forward significant engineering efforts to achieve zero discharge from production plants being engineered by them.

With a view to improving the steel industry safety design and implementation norms, particularly for

gas hazard zones, your Company has taken certain initiatives which include hazard remediation installations on HAZAN & HAZOP study for such specific area.

CORPORATE SOCIAl RESPONSIBIlITy

Your Company’s Social and Sustainability initiatives are driven by the conviction that organizations play a significant role in contributing to build a better society. Evolving from your Company’s abiding vision to pursue sustainable and inclusive growth, the CSR strategies are primarily focused on education, healthcare, women empowerment, community development and upgrade of infrastructural facilities in the selected villages of Jharkhand.

Hon’ble Prime Minister’s clarion call for Swachh Bharat and Swachh Vidyalaya resonates with your Company’s CSR vision and we were able to successfully complete the allotted target of 53 toilets in MHRD schools under Swachh Vidyalaya Abhiyan within the stipulated deadline. Under Swachh Bharat and sustainability initiatives your Company undertook the task of installing “Air Cooling System in Shree Jagannath Temple, Puri” and completed the same within a challenging time span of 10 days.

HR

In the light of our company’s objective to focus and sustain a competent and highly responsive workforce with adequate domain expertise, we have made rapid strides in key HR processes such as Performance Management, Career Advancement through multiple role exposures and Knowledge Management frame work.

Projects being the centre of our delivery mechanism, workshops and trainings were arranged on Tendering and Procurement of Projects, Contract Management and Project Management techniques. Along with technical capabilities augmentation, training in soft skills is being given equal importance to bring about an overall development of our future leaders to enable them to unleash potential for necessary business impact.


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A blend of young and experienced personnel are associated in CSR and other social forums thereby developing corporate citizens.

We continue to focus on our people and their development, as it is they who will lead the company through this challenging environment and ensure that sustained value creation is achieved.

ISO

During the year, the Quality Management System of your Company was reassessed through TUV Surveillance Audit for continual conformance to ISO 9001:2008 which confirmed that the Quality Management System of your Company continues to conform to the international standard ISO 9001.

STRATEGy FOR GROwTH

As a first step, we engaged a Management Consultant for diagnostic study and to suggest measures for improvement. Based on their report and further deliberations in-house, a roadmap of implementing certain recommendations were outlined. The same is being implemented in a planned manner.

FuTuRE PROSPECTS

The ambitious National Mission of achieving 300MT crude steel capacity by 2025-26 as a measure to increase the share of manufacturing in the country’s GDP from 16% to 25% is envisaged and the SPV concept has been introduced by the Ministry of Steel for the speedy implementation of large capacity green field steel projects, especially in the iron rich states of Jharkhand, Odisha, Chattisgarh and Karnataka. In this direction your Company was entrusted with preparation of several studies in the area of mining, infrastructure and use of minerals.

Your Company as consultant to NMDC has been instrumental in developing the concept of SPV framework for the steel industry. There has been rapid progress in implementation of this concept with the State governments of Chattisgarh and Jharkhand signing MoUs in the august presence of

the Hon’ble Prime Minister of India, Shri Narendra Modi, with the nodal agencies for setting up Ultra Mega Steel Plants in their respective States. MECON has to play an active role in support of this endeavour of Ministry of Steel.

The SPV concept has spurred activities in related areas of Infrastructure and Railway Freight Corridors. The Infrastructure Report prepared by your Company for infrastructure requirement for ore evacuation and transportation and need for dedicated steel freight corridor has been taken note of by Ministry of Steel.

Renewed thrust will be given to procure both consultancy and EPC projects in the Metals sector from our valued clients in public as well as private sectors. The main thrust of the Company shall be upon metals along with Coke Ovens, Mining and Beneficiation for consultancy and EPC assignments.

Your Company is making concerted efforts in transfer of new mining technologies for absorption and indigenization in industries in the country.

Your Company believes that it is adoption of new technologies that will ultimately boost sustainable growth in the company and that employees must engage in enhancement and reinforcement of technological skills and competencies. In order to build a stronger foundation for the future, we have undertaken some strategically critical initiatives, which have the potential to transform the core of the organization for the better. These include among others:

Signing of MOUs with strategic partners

Setting up a state of art GIS laboratory

New HR mechanisms introduced for improved assessment of the technical competence of employees.

And last but not the least, like the past years, your Company has once again been awarded excellent rating in compliance with the Corporate Governance for the financial year 2013-2014 and based on the physical and financial performance,

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an MOU Very Good rating by Government of India is anticipated for the year 2014-15.

ACkNOwlEDGEMENT

To conclude, I acknowledge that all these achievements have been possible only due to persistent and dedicated efforts made by the employees of the Company. On behalf of the shareholders and management of the Company, I thank the Company’s trusted clients, vendors and other partners and stakeholders in business for enabling it to perform up to the expectations of the customers.

I gratefully acknowledge the support extended to us by Government of India, Ministry of Steel and thank them for the confidence and trust bestowed upon the Company and the opportunities given for growth. Your continued support, trust and encouragement are what give us energy, confidence and motivation to strive for betterment. I sincerely assure you that the Company will grow in the years ahead.

Thank you & Jai Hind.


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DIRECTORS’ REPORT FOR THE FINANCIAl YEAR 2014-2015The Members,

Your Directors have the pleasure in presenting 42nd Annual Report on the operations of the Company and the Statements of Accounts for the Financial Year ended on 31st March, 2015.

The Report of the Statutory Auditors and the Comments on the Accounts of the Company by the Comptroller and Auditor General of India are annexed to this Report.

1.0 PERFORMANCE HIGHlIGHTS

Your company’s business is derived fundamentally from the sectoral investments across its line of busi-ness. Challenging market scenario notwithstanding, your company’s strong fundamentals, skill sets and unflinching commitment to succeed, has paid-off in terms of meeting the top line target for the current year and will continue to improve upon both the top and the bottom lines in the times to come.

Your company’s efforts on widening the global reach have started yielding results in executing overseas assignments in countries like USA, Indonesia, Nigeria & Iraq.

Your Company has successfully pursued both product and market diversification to eliminate market risk on company performance. Major prestigious projects of national importance completed / under progress during the year include:

Metals Sector

4.2 Mtpa Expansion Plan of SAIl/ Rourkela Steel Plant, Rourkela - Engineering & Consultancy services including Designer’s Supervision during Erection, Testing and Hot trial have been provided by MECON and following are the major achievements:

4060 m3 State of Art Blast Furnace #5 along with its upstream facilities has been put into operation now. The BF#5 was commissioned on 17.10.2014. The BF is provided with 14 MW TRT and Waste Gas pre-heaters as energy recovery measure.

360 m2 Sinter Plant-III has been commissioned on 15.04.2014. The plant has started producing sinter.

Two major electrical packages namely All distributed HT sub-stations located near the main technological packages and Augmentation of existing MSDSs & installation of new MSDS-IV, MSDS-V & MSDS-VI commissioned on 07.10.2014 and 19.12.2014 respectively.

150t BOF in SMS-II has been success-fully commissioned during June’ 2014.

7 m tall Coke Oven Battery No. 6 of SAIl/Rourkela Steel Plant, Rourkela has been successfully commissioned. After commissioning of the project, post commissioning services have been completed in October' 2014. MECON has executed the project on EPC basis.

2.5 Mtpa Expansion Plan of SAIl/IISCO Steel Plant, Burnpur - Detailed Engineering & Consultancy services including Project

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carried out successfully on 08.09.2014 and of Convertor # 2 on 20.11.2014 with hot metal from old Blast Furnace of SAIl / ISP. Integrated hot trial of Convertor with hot metal from newly commissioned Blast Furnace was successfully carried out on 13.12.2014.

Second 1x6 Strand Billet casters has been successfully commissioned on 17th October’ 2014. The caster has been commissioned with liquid steel from existing steel melt shop. It is a state-of-the-art high speed billet caster with provision of charging hot (first time in SAIl family).

First Bar was rolled successfully from 750,000 tpa capacity Bar Mill on 1st

March’ 2015. The Bar Mill is equipped with state of the art facilities including India’s first Endless Welding Rolling (EWR) facility.

Management Consultancy services have been provided by your Company and following are the major achievements :

A new state-of-the-art Blast Furnace No. 5 “KAlYANI” having 4161 m3 useful volume, biggest in SAIl family as well as largest in India, was installed. The Blast Furnace was commissioned on 01.12.2014.

TurboBlower 2 & 3 were successfully commissioned in May’ 2014 and 18th

November’ 2014 respectively in Power and Blowing Station to cater air blast requirement of new Blast Furnace.

Commissioning activity of 2 x 204 m2

Sinter Plant is in progress.

Production from newly built BOF shop has been started since September’ 2014. Hot trial of Convertor # 3 was


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Cold trial of 0.6 Mtpa Universal Section Mill is in progress.

MECON has performed successfully safety checks & audit for readiness of BF gas network prior to its charging at SAIl/ IISCO Steel Plant, Burnpur which led to trouble free & safe commissioning of the system.

For the first time in SAIl plants, HAZOP study has been conducted by MECON at IISCO Steel Plant, Burnpur for BF complex & BOF shop alongwith BF gas & oxygen pipelines.

7.0 Mtpa Expansion Plan of SAIl/Bhilai Steel Plant - Consultancy and Engineering services have been provided by your Company and following are the major achievements:

Installation of 4060 m3 (useful volume) Blast Furnace No. 8 is under execution.

2nd Sinter Machine (360m2) for 2nd Strand in Sinter Plant No.3 was commissioned on 28.11.2014.

New Coke Oven Battery No. 11 complex consisting 67 nos. of 7m tall ovens, CDCP and By-product plant have been successfully commissioned in October, 2014.

Cold Repair of Coke Oven Battery No. 9 of SAIl/Bhilai Steel Plant, Bhilai is being executed by your Company on EPC basis. Battery is likely to be commissioned by 2015.

2.2 Mtpa Expansion Plan of SAIl/Durgapur Steel Plant- Detailed Engineering & Consultancy services provided by your Company:

1x4 Strand Bloom cum Round Caster of SMS Shop has been successfully commissioned in February’ 2015.

Cold Trials activity of 1.0 Mtpa Medium Structural Mill is in progress.

Design, Engineering, Construction Supervision and Heating up/

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Commissioning services for the 4.45 m Coke Oven Battery has been rendered for rebuilding of Coke Oven Battery No. 2 of SAIl/Durgapur Steel Plant, Durgapur. Post Commissioning services for the project have been completed in December' 2014.

Rendering Detailed Engineering & Consultancy services for the installation of 1.2 Mtpa CRM complex of SAIl/Bokaro Steel Plant meant for the production of high grade automotive products.

PAC for Coupled Pickling line and Tandem Cold Mill, Bell Annealing Furnace, Skin Pass Mill, Coil packaging line and other major ancillary packages have been already issued by BSl while HDGl, ECl and Tension leveling line are in advance stage of execution.

Rebuilding of Coke Oven Battery No.7 of SAIl/Bokaro Steel Plant, Bokaro. The project is under execution.

3.0 Mtpa Integrated Steel Plant of NMDC limited at Nagarnar – Detailed Engineering & Consultancy services including Project Management Consultancy services provided by your Company. The project is under execution.

NMDC limited has entrusted your Company for providing Consultancy services for Engineering, Contract Procurement, Project Management and Construction Management (EPCM) for setting up 2 Mtpa Pellet Plant at Nagarnar, Beneficiation plant at Bacheli, Slurry Pipeline from Bacheli to Nagarnar, Feed water pipeline from Sukma to Bacheli, Return water pipeline from Nagarnar to Bacheli and Associated facilities. The job is under progress.


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NMDC’s crushing and conveying system for Deposit 11B at Kirandul has been completed and was inaugurated by Shri Narendra Kothari, CMD, NMDC on 29th March’ 2015. The system augments the mining capacity by 7 Mtpa.

MECON has rendered Design, Engineering, Supply, Erection and Commissioning of the 0.6 MT High Speed Wire Rod Mill-2 of RINl/visakhapatnam Steel Plant, Visakhapatnam. The mill has been commissioned in 2014. The mill is presently under production.

Your Company has been entrusted by RINl/visakhapatnam Steel Plant, Visakhapatnam for RlA study of oxygen PRS 1&2. The job covers report based on physical study of PRS 1&2 alongwith study of condition of pipelines & associated facilities.

Providing Consultancy & PMC services for the Coke Oven Battery No. 5 Complex consisting of CDCP, Byproduct plant, Coal and Coke handling facilities, Power distribution etc. for RINl/visakhapatnam Steel Plant, Visakhapatnam.

Providing Consultancy and PMC services for Pushing emission control system and Coal handling facilities for installation of Phase-II facilities for Coke Oven Battery No. 4 of RINl / visakhapatnam Steel

Plant. Pushing emission control system has been successfully commissioned in April’ 2014.

Benzol Recovery & Distillation Plant (Phase-II) of RINl / visakhapatnam Steel Plant, Visakhapatnam has been successfully commissioned in December’ 2014 with the production of Crude Benzol. The project was executed on EPC basis.

RINl/visakhapatnam Steel Plant has entrusted your Company with the assignment for carrying out Consultancy services for all works leading to mining of Bhilwara Iron ore mining leases, Rajasthan. Feasibility Report for the iron ore deposited has been completed. 1st mining plan is also submitted for the project. IBM inspection has been completed recently. TOR and forest clearance of the project has been cleared from the respective statutory bodies.

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Engineering & Consultancy services for 10 Mtpa expansion of Gua Iron Ore Mines of SAIl/Raw Material Division, Gua. The expansion of Gua Iron Ore Mines includes installation of 4 Mtpa Pellet Plant. The contract has been finalized.

1x8 Strand high speed Billet Caster in SMS shop of Jindal Steel & Power ltd., Angul has been successfully commissioned on 4th December, 2014. Your Company is rendering Detailed Engineering & Consultancy services for the brown field expansion of JSPl, Angul.

The Blast Furnace No.1 of Jindal Steel & Power ltd., Raigarh is up-graded from 446 m3 to 686 m3 and blown in on 15.07.2014. Your Company has rendered Consultancy & Engineering services for the project including vetting of technology.

JSw Steel limited, entrusted the job for providing assistance in planning capital repair work for Blast Furnace No.1 without dismantling BF top. The existing 1250 m3 BF is being re-built to 2307 m3 with all the state-of-the-art facilities. The project is under execution.

JSw Steel limited, Dolvi Works has entrusted Design, Engineering & Consultancy services for their Blast Furnace upgradation & capacity enhancement project. The existing BF of 2,581 m3 capacity shall be upgraded to 4,323 m3 (inner volume). The project is under execution.

Your Company has carried out the job of additional Design and Engineering services for the Beneficiation Plant-2 of JSw Steel limited at Toranagallu.

JSw Steel limited, Toranagallu entrusted the job for providing Consultancy Services for Production Augmentation projects in SMS#1, SMS#2 & lCP. The project is under execution.

usha Martin ltd., Gamaharia Works has entrusted Engineering & Consultancy services for installing Waste Heat Recovery system (WHRS) in Hot Blast Stove of BF No. 1. The project is under execution.

Bharat Petroleum Corporation limited, Chennai has placed the work order for carrying out Design & Consultancy for IREP at Irimpanam, Kochi and the job has been successfully completed.

The Hutti Gold Mines ltd. (HGMl), Hutti, Raichur has entrusted the job for providing Consultancy Services for 100TPH Ball Mill Project. The project is under execution.

SBI have appointed your Company as lender’s Independent Engineer (lIE) to monitor the progress of project of Jindal Steel & Power limited, Angul and to certify the project completion activities


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on quarterly basis. Final Report has been submitted.

Your Company has been entrusted by South Eastern Coalfields limited, Dankuni Coal Complex for Design, Detailed Engineering & Consultancy services for installation of 12,000 cu.m. capacity water seal type gas holder.

Bharat Coking Coal limited (BCCl) has entrusted your Company the job of vetting of mining plan of Kapuria underground coal project. The mining plan was technically reviewed considering the MoC guidelines and relevant statutes. The job was successfully completed.

M/s HCl assigned your Company the job of estimating the base price in respect of excavation & loading of 45 lakh bank cubic meters of rock for their Malanjkhand copper mines in the state of MP. The same was prepared by your Company and was approved by the board of HCl.

Odisha Mining Corporation (OMC) a wholly State-Owned Corporation of Govt. of Odisha has entrusted your Company to carry out Consultancy services for preparation of TEFR for Beneficiation & Pellet Plant and Study of Evacuation methodology of ClO and finished product from proposed plant at Gandhamardan-B Ml. The project is in advance stage. The

project conceptualization study has been completed.

uranium Corporation of India limited (uCIl) has entrusted your Company for providing:

Design & Engineering services for Magnetite By Product Recovery Plant at Turamdih.

Design and Engineering services for Improvement in Ore Hoisting and Crushing System at Turamdih.

Power Sector

Your Company is providing Detailed Engineering & Consultancy services including Project Management services to NlC Tamilnadu Power limited (NTPl) for installation of coal based 2x500 MW Power Plant at Tuticorin. Unit-I was synchronized with grid on oil firing on 18.02.2015 and same was subsequently synchronized with grid on coal firing at full load (500MW) on 10.03.2015.

Consultancy services for preparation of R&M / RM&U, DPR and Tender document for Kodayar Hydro Power House-I (1x60 MW) has been entrusted by TANGEDCO, Chennai. The project is under execution.

RINl/visakhapatnam Steel Plant entrusted your Company with the assignment

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for rendering Detailed Engineering & Consultancy services for one no. Turbo Blower-5 (TB # 5) along with associated auxiliaries. The Project is under execution.

Oil & Gas SectorYour Company has been steadily progressing in the diversified field of Oil & Gas and has been providing Project Management & Consultancy Services to various PSUs, Joint Venture companies as well as Private Sector clients in the area of Natural Gas Pipeline networks, CNG & City Gas Projects, Storage Terminals for petroleum products and commercialization of Coal Bed Methane. The major assignments completed / under progress during the year are:

A 10’’x 93 Km Multiproduct pipeline and Receiving Station and Terminal of Awa-Salawas Pipeline of Hindustan Petroleum Corporation ltd. has been successfully tested and commissioned in the month of January 2015. The scope constituted mainly Design, Engineering, Construction & Project Management of multi product pipeline of 93 Km, including Receiving station, Terminal and augmentation of existing Salawas Terminal to handle the pipeline storage capacity in compliance of MB lal Committee recommendations.

Detailed Feasibility Report along with Natural Gas Demand Assessment and Reconnaissance Route Survey for an approximately 1175 km long Natural Gas Pipeline of Ennore-Nagapattinam Gas Pipeline with branch Pipelines to Madurai, Tuticorin and Bengaluru has been prepared and submitted to GAIl.

Hindustan Petroleum Corporation limited, Visakhapatnam has entrusted the work of EPMC Services for up-gradation of SCADA, APPS and TElECOM Systems of Visakh - Vijayawada - Secunderabad Pipeline (Cross Country Pipeline). The project is under execution.

Infrastructure Sector

Oil and Natural Gas Corporation limited, Uran has awarded the job to your Company for providing Techno Commercial and Environmental Feasibility Study for setting up a Desalination Plant at ONGC, Uran Plant, Uran (approx. capacity 20 MlD). The project is under execution.

Engineering and Project Management Consultancy Services (EPMC) for Modernization of Central Ordnance Depot, Agra, Phase-I has been completed for Ministry of Defence. EPMC services comprises mainly Construction of Warehouse, Non-warehouse, Security Wall, Escort lines & MEP services like RCC Building, Road Network etc.

Engineering and Project Management Consultancy services (EPMC) for Modernization of Central Ordnance Depot, Jabalpur, Phase- I has been completed for Ministry of Defence. EPMC services comprises mainly Construction of Warehouse, Non-warehouse, Security Wall, Escort lines & MEP services like RCC Building, Road Network etc.

Overseas

Asian Color Coated Ispat ltd. have entrusted your Company to carry out Health Study, Asset Valuation, preparation of Techno-Economic Viability (TEV) Report / Bankable Feasibility Report and preparation of Tender Specifications with cost estimate for appointing Refurbishing Contractor as well as for New Facilities envisaged under augmentation programme for the plant. Asset Valuation for Mingo Steel Works, OHIO, USA, was completed on October’ 2014 and Draft Report submitted to the client in November, 2014.

Engineering Consultancy services for Blast Furnace Complex of P.T. krakatau


20


Steel, Indonesia for a 1.2 Mtpa Hot Metal Plant was entrusted to your Company. Your Company has provided services for review of Basic & Detailed Engineering for which experts from different disciplines were deputed to Indonesia. The Project Engineering schedule was 15 months and the same was successfully completed.

P.T. krakatau Steel, Indonesia has given further assignment of Consultancy & Engineering for Gas distribution system for their Integrated Steel Plant and appointed as Technical Consultant for Assessment of BF Complex Project Schedule. The work is in progress.

P.T. krakatau Steel, Indonesia have retained your Company as Technical Consultant / Engineering service for Coke-Oven & BF surplus gas utilisation in their iron & steel making plant. The project involves interplant Coke - Oven gas & BF gas piping alongwith gas mixing stations for various consumers.

PT virema Parshu Steel, Indonesia have assigned your Company to prepare a

Bankable Techno-economic Feasibility Report for setting up Metal coating complex of 150,000 t/yr at Subang, West Java. This complex would be 2nd largest facility in Galvalume and Color coating industry in Indonesia. The job has been completed.

Offshore Construction Specialist, Singapore has awarded the job to your Company for providing Basic Design, Detailed Engineering, Bill of Quantities, Preparation of supply and construction specifications for installation of 10 Km long, 20” x 0.375” onshore gas trunk pipe line from field station to central station of Bin Omer Oil field yamamah formation in Iraq. The work is in progress.

Consultancy services for Setting-up of a CNG Plant at Ogun State, Nigeria for Contec Global, Nigeria.

Due Diligence & Review of completed works pertaining to Exploration and Resource Evaluation in Nigeria for African Natural Resources and Mines ltd., Nigeria.

21



Preparation of Report for Preliminary Testing of Iron Ore Samples of KotonKarfi lease for African Natural Resources and Mines ltd., Nigeria.

Your Company is serving a large number of clients in the Public and Private Sectors. Some of the major clients in Public Sector include SAIl, NMDC, NINl, RINl / VSP, KIOCl, HCl, NMl, RINMOIl, SAIlMOIl, MIDHANI, VPT, HPCl, BPCl, OMDC, MRPl, TVNl, FCRI, IPICOl, NAlCO, BPSCl, NlC, NSPCl, NPCIl, WBSEB, WBPDCl, WBSEDCl, BESCOM, OHPC, PFC, CMWSSB, UCIl, GAIl, IOCl, HPGCl, ONGC, CPCB, KPCl, KPT, GGl, IGl, BGl, TNGCl, DVC, MSTC, NTPC, NHPC, NMPT, IDCOl, IREl, BARC, SBI besides Ministry of Power, Govt. of India, the State Electricity Boards in Jharkhand, West Bengal, Madhya Pradesh, Chhattisgarh, Rajasthan, Tamil Nadu, Uttaranchal, Uttar Pradesh. Jindal Group, Bhushan Group, STEMCOR, ESSEl, KIC METAlIKS, AXIS BANK, UMl, UlTRATECH, SURYADEV, MONNET, BMM, UGSl, MEl, BRPl, SESA GOA, ADHUNIK, HINDAlCO, TMl, ESSAR, BIl, MNGl, Il&FS, TOPWORTH, ADANI, MSPl, IIl, SlR, etc. are some of the major clients in the private sector.

In addition to above, some of the major clients to whom your company has been rendering services during this year include OPTCl, UPPCl, Nalanda University, UPRVUNl, TANGEDCO, PFC, APGCl, OMC, OMDCl, JVVNl, JSW, etc. The Company is also providing services to Defence Sector.

Business procurement in the area of Engineering Consultancy & PMC services was ` 206.86 Crores in previous year and ` 579.31 Crores during this financial year. In Supply / Turnkey projects it was `134.36 Crores in previous year and ` 14.09 Crores during this year. Your company has decided to effectively utilize the costly man-hours for high value jobs and outsource the low return areas.


22


2.0 BuSINESS DIvERSIFICATION

In view of the cyclic demand / investments in the Steel Sector over the past several years, your Company has diversified into several sectors of the economy especially Oil & Gas, Power and Infrastructure. This has been achieved by formation of distinct Strategic Business Units in the Company.

The Company has gained substantial experience and recognition in some of these sectors and would like to build a strong portfolio of services to meet the growing demand of Clients. This would also help the Company in adjusting to the sectoral market fluctuations by aligning itself towards the sectors having higher opportunities in future.

During this fiscal year, Consultancy business procurement from the Metal Sector has been significant. In Engineering and Consultancy, the Company’s order booking is 73.20% (previous year 42.93%) in metal sector and 26.80% (previous year 57.07%) in the non-metal sectors.

3.0 MANAGEMENT INITIATIvES

While the resurgent market scenario offers business prospects in each sector of your company’s operation, it is fully aware of the challenges like stiff competition, quality output delivered on time, superior technology and cost effective solutions demanded by the emerging market. This calls for revisiting the existing business practices and to come out with appropriate measures to address the transitional market dynamics. Your company therefore appointed M/s Deloitte Touche Tohmatsu ltd, India to study the existing business process and suggest measures for improvements.

The report has since been submitted by M/s Deloitte and a number of actions have been initiated forthwith.

Additionally, to respond to the expectations of the client which slowly but steadily is shifting towards availing the entire gamut of services under one umbrella, your Company has taken various initiatives that include scouting for strategic partners to synergize the experience, expertise and resources of both, to become successful in a highly competitive business environment. MOUs/Working partnerships, both for long term and project specific associations have been entered into with different companies having relevant experiences.

To continue as a profitable organization with a greater market share and innovation, your company has taken initiatives such as refocus on clients with their project specific requirements, venturing into newer areas of business with strategic partners and in-house augmentation of workforce for soft

6.06%

13.96%6.78%

SBU wise Business Procured (Consultancy)

Metal Power Oil & Gas Infastructure

73.20%

140012001000

800600400200

02010-11 2011-12

Year

Business Procured (Consultancy)

Metal Non-Metal

in `

Cro

res

2012-13 2013-14 2014-15

700600500400300200100

0

Business Procured (Supply)

In `

Cro

res

Year

2010-11 2011-12 2012-13 2013-14 2014-15

Metal Non-Metal

23



skill development and keep them motivated to meet challenges emerging from changed business scenario.

Your company has also decided to strengthen its Marketing team, from its existing pool of Middle level Officers with required bent of mind and for which selection process has been initiated.

Your company is also eyeing at International market for business potential and is participating in overseas projects / tenders particularly in Indonesia and Bangladesh. Your company’s team had participated in the recently concluded 18th Iron & Steel Conference in Dubai in Dec’2014. Some business potentials have been identified in the Middle East Region, for which follow up action is being taken to convert them in to business. Your company has also decided to open overseas offices in addition to its existing office in Nigeria. The location of the office shall be finalized, based on the order that your Company secures out of the present and future endeavors.

4.0 MOu wITH MINISTRy OF STEEl ON PERFORMANCE

like in the previous years, your Company has signed an MOU with Ministry of Steel for the Financial Year 2014-2015. The Company achieved “Fair” rating in the year 2013-14 and is likely to achieve “Very Good” rating in 2014-15.

5.0 ISO 9001:2008 CERTIFICATION

Your Company is the first consultancy organization in the country to be certified for ISO 9001 Quality Management System in the year 1994. The certificate has been awarded by M/s TUV NORD CERT Gmbh. The scope of Company’s certification include Consultancy, Design & Engineering, Procurement of Plant & Equipment, Inspection, Construction & Project Management Services and Erection of Turnkey Projects. The re-certification audit by TUV has been completed in November, 2014 and Company’s QMS has been recertified for ISO 9001: 2008 for further period of three years

with validity till 29.01.2018. Vigilance function of the Company has also received ISO 9001: 2008 Certification valid upto 26.11.2015.

6.0 INDIAN ASSIGNMENTS

Your company has procured following major work orders during 2014-15:

Metals Sector Consultancy services for Expansion

of Mines including installation of Beneficiation & Pelletisation in various Mines of SAIl/Raw Materials Division, Kolkata.

Engineering, Procuremet and Construction Management (EPCM) for construction of 2 Mtpa Pellet Plant at Nagarnar, Beneficiation Plant at Bacheli, Slurry Pipeline from Bacheli to Nagarnar, Return Water Pipeline from Nagarnar to Bacheli and Associated Facilities for NMDC limited, Hyderabad.

Additional Services for providing Project Management & Consultancy services for Expansion Project for 2.5 MT Stream of SAIl/IISCO Steel Plant, Burnpur.

Supply, Erection & Commissioning for installation of Radar based Oven Identification System (OIS) & Machine Interlocking System in Coke Oven Battery #6 for SAIl/Rourkela Steel Plant, Rourkela.

Consultancy services for Production Augmentation Projects in SMS # 1, SMS # 2 & lCP for JSw Steel ltd., Toranagallu.

Extension of Contract for providing Detailed Engineering & Consultancy services for Integrated Iron & Steel Plant Complex at Duburi for Neelachal Ispat Nigam ltd., Duburi.

Post Commissioning services in Coke Oven Battery #6 of SAIl/Rourkela Steel Plant, Rourkela.


24


Control of Heating of Coke Oven Battery No. 1 & 2 of SAIl/Bokaro Steel Plant, Bokaro.

Detailed Engineering & Consultancy services for North Side Hot Metal Entry at SMS # 2 for JSw Steel ltd., Toranagallu.

Consultancy services for 100 Tph Ball Mill Project for The Hutti Gold Mines Company ltd., Raichur

Detailed Engineering & Consultancy services for installation of New Gas Holder, Wet Type Capacity 12,000 m3 for Dankuni Coal Complex.

Preparation of report for Creation of Steel "Special Purpose Vehicle" (SPV) in the States of Jharkhand, Odisha, Chhattisgarh and Karnataka for NMDC limited, Hyderabad.

Detailed Engineering & Consultancy services for review of Basic & Detailed Engineering and assistance for setting-up of proposed Pilot Plant for Gharda Scientific Research Foundation.

Consultancy services for additional Design & Engineering services for additional job for Beneficiation Plant-2 Project for JSw Steel ltd., Toranagallu.

Power Sector

Preparation of Detailed Project Report and Project Management Consultancy services for Deen Dayal Upadhyay Gram Jyoti Yojana and Integrated Power Development Scheme in DISCOM "SOUTHCO" for Odisha Power Transmission Corporation ltd., Bhubaneswar.

Consultancy Services for installation of one number Turbo Blower-5 alongwith associ-ated Auxiliaries for RINl/visakhapatnam Steel Plant, Visakhapatnam.

Additional services for preparation of Detailed Project Report for Rural

Electrification Work in Three Districts under Medininagar Cluster for Jharkhand State Electricity Board, Ranchi (JBVNl).

Project Monitoring and Supervision of Quality of Works under RGGVY Projects of Betul, Bhind, Datia, Harda, Morena, Raisen and Vidisha Districts under 12th Plan for MP Madhya kshetra vidyut vitran Company ltd., Bhopal.

Additional services for preparation of Detailed Project Report for Rural Electrification Work in Five Districts under Ranchi Cluster for Jharkhand State Electricity Board, Ranchi (JBVNl)

Preparation of Feasibility Report for Development & Modernisation of the Distribution System of Ghaziabad Municipal Area through Public Private Partnership for uP Power Corporation ltd., lucknow.

Preparation of Feasibility Report for Development & Modernisation of the Distribution System of Meerut Municipal Area through Public Private Partnership for uP Power Corporation ltd., lucknow.

Preparation of Feasibility Report for Development & Modernisation of the Distribution System of Varanasi Municipal Area through Public Private Partnership for uP Power Corporation ltd., lucknow.

Consultancy services for RlA & Uprating study of Kodyar Power House-I in Tirunelveli Generation Circle for TANGEDCO, Chennai.

Preparation of Road Map for 24 x 7 Power Supply for various States & UTs of India (Package-1) for Power Finance Corporation ltd., New Delhi.

Preparation of Feasibility Report for Development of Distribution System in Jaipur under PPP Model for Jaipur vidyut vitran Nigam ltd., Jaipur.

25



Oil & Gas Sector

Engineering & Project Management Consultancy services for Replacement of Gujarat Region and Cauvery Basin Region Pipeline (Approx. 460 KM) for GAIl (India) ltd., New Delhi.

Engineering & Project Management Consultancy services for assistance in Pipeline Integrity Matters across the Country including Agartala and Conversion of Non-piggable to Piggable in NCR region for GAIl (India) ltd.

Project Management & Consultancy services for Kakinada-Visakhapatnam Natural Gas Pipeline of Kakinada-Srikakulam Natural Gas Pipeline Project for Andhra Pradesh Gas Distribution Corporation ltd.

Engineering & Project Management Consultancy services for Development of CNG & CGD Network at Sonepat, Dewas, Merrut & Kota for a period of Two Years for GAIl Gas ltd.

Additional services for providing Project Management & Consultancy Services for BNPl Project and Spur DBNPl Project of GAIl.

Engineering & Project Management Consultancy services for CNG Network at Baroda for GAIl Gas, Vadodara.

Consultancy services for implementation of Flow Rate of 1200 lPM per loading Arm at 22 locations for Hindustan Petroleum Corporation limited, Mumbai

Project Management & Consultancy services for preparation of P&ID, Piping GADs & Pilot Plans for various Terminals & Stations in KG Basin for GAIl (India) ltd.

Engineering & Project Management Consultancy services for Development of CGD Network in Bengaluru for GAIl Gas ltd., Noida.

Additional Services for providing Engineering & Project Management Consultancy services for Taj Trapezium Zone (TTZ) CGD Project for GAIl Gas ltd.

Project Management & Consultancy services for installation of Corrosion Monitoring System (Corrosion Coupons and Corrosion Probes) under RPNHQ Vadodara for GAIl (India) ltd., Vadodara.

Engineering & Project Management Consultancy services for Implementation of MB lal Committee Recommendations in Naptha Storage at GAIl, vaghodia.

Engineering & Project Management Consultancy services for upgradation of SCADA APPS and Telecom Systems of Visakh - Vijayawada - Secunderabad Pipeline for Hindustan Petroleum Corporation limited, Visakhapatnam.

Project Management & Consultancy services for Hydro-Testing of Pipelines under RPNHQ Vadodara for GAIl (India) ltd., Vadodara.

Engineering & Project Management Consultancy services for Setting-up of CNG Station at Neemranaalongwith two nos. of DBS for RSPCl-GAIl Gas.

Design Consultancy Works for Civil/ Mechanical/ Electrical for IREP for Bharat Petroleum Corporation ltd., Chennai

Engineering and Project Management Consultancy services for Procurement, Installation and Commissioning Works for Ultrasonic Metering Skids at Undera Sites under RPNHQ for GAIl, Vadodara.

Infrastructure Sector / Other Engineering

Project Management & Consultancy services for Phase-I Development of University Campus at Rajgir for Nalanda university, Bihar.

Detailed Engineering & Project Management Consultancy services for


26


Additional Wagon Tippler at Paricha Thermal Power Project Stage-II for uP Rajya vidyut utpadan Nigam ltd., lucknow.

Independent Engineer services for upgradation of existing Iron Ore Handling Facility of Outer Harbour to achieve Rated Capacity of 8000 Tph on DBFOT Basis for visakhapatnam Port Trust, Visakhapatnam.

Consultancy services for Revamping and Augmentation of existing BOD Plant of Neelachal Ispat Nigam ltd., Duburi.

Preparation of Detailed Feasibility Report for Modernisation of 4 CODs for Directorate General of weapons and Equipment, Ministry of Defence.

Preparation of EIA/EMP Report & Mining Plan for Bagiaburu, Bhadrasahi & Belkundi Mines of Orissa Minerals Development Company ltd., Orissa.

Consultancy services for Phase-II Structures of Integrated Plant (INRP), Tarapur for Bhabha Atomic Research Centre - Nuclear Recycle Board, Mumbai.

Preparation of Feasibility Report for setting-up a Desalination Plant at ONGC, Uran Plant for Oil and Natural Gas Corporation ltd., Uran.

Preparation of EIA/EMP Report for Environmental Clearance for Battery#9, Pellet Plant & Sinter Plant-II and Environmental Clearance related to Expansion cum Modernization from 4 Mtpa to 7 Mtpa of SAIl/Bokaro Steel Plant, Bokaro.

Preparation of Report for Environmental Clearance for upgradation of existing Ship Recycling Yard at Alang-Sosiya, Gujarat for Gujarat Maritime Board, Gandhinagar.

Preparation of Techno-Economic Feasibility Report for Setting-up of

Beneficiation Plant, Pellet Plant & Study of Evacuation Methodology of ClO and Finished Product from the proposed Plant at Gandhamardan-B Ml for Odisha Mining Corpn. ltd., Bhubaneswar.

7.0 FOREIGN ASSIGNMENTS

Overseas assignment bagged by your company is highlighted below:

Health Study, Asset Valuation, preparation of Techno-economic Viability (TEV) Report / Bankable Feasibility Report and preparation of Tender Specifications with cost estimate for appointing Refurbishing Contractor as well as for New Facilities for Mingo Steel works, OHIO, uSA.

Design, Engineering & Deputation for Technical Consultant for Assessment of Blast Furnace Schedule for PT krakatau Steel, Indonesia.

Detailed Engineering & Consultancy services and Supervision services for Coke Oven Gas & BF Gas Utilisation for PT krakatau Steel, Indonesia.

Preparation of Techno - Economic Feasibility Report for Coating Complex for PT virema Parshu Steel, Indonesia.

Basic Design, Detailed Engineering, Bill of Quantities, preparation of Supply & Construction Specifications for installation of 10 Km long, 20" x 0.375" Onshore Gas Trunk Pipeline from Field Station to Central Station of Bin Omer Oil Field yamamah Formation in Iraq for Offshore Construction Specialists Pte ltd., Singapore.

Due Diligence & Review of completed works pertaining to Exploration and Resource Evaluation in Nigeria for African Natural Resources and Mines ltd., Nigeria.

Consultancy services for Setting-up of a CNG Plant at Ogun State, Nigeria for Contec Global, Nigeria.

27



Preparation of Report for Preliminary Testing of Iron Ore Samples of KotonKarfi lease for African Natural Resources and Mines ltd.,Nigeria.

8.0 FINANCIAl RESulTS

The extract of Annual Return for the period under review, as required under Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is annexed as Appendix- I.

The financial highlight for the period under review is as under:

(` In lakhs)

2014-15 2013-14

8.1 Material changes and commitment, if any, affecting the financial position which has occurred between the end of financial year to which the financial statements relate and the date of the report.

Nil Nil

8.2 The amount, if any which is proposes to carry to any reserve.

Opening Balance

Add. During the year

Utilized during the year

Closing Balance

37,413.62

932.95

(-) 354.53 ________

37,992.14

33,627.25

3,811.01

(-) 24.64 ________

37,413.62

8.3 Particulars of loans, guarantees or investments under Section 186 of the Companies Act,2013.

519.52 # 519.52 #

8.4 Particulars of contracts or arrangements with related party referred under section 188(1) in Form AOC-2. (Enclosed as Annexure- A)

Nil -

# Represents the investment (Gross) made by the Company.

9.0 DIvIDEND

This year your Directors have recommended payment of 5% Dividend on Preference Shares for ` 106.32 lakhs and 20% Dividend on paid up Equity Share Capital for ` 802.77 lakhs.

9.1 CuMulATIvE DIvIDEND & TAX PAID

Your company which had paid up capital of ` 5,273.84 lakhs (previous year ` 6,533.84 lakhs) including Bonus Shares worth ` 40.31 lakhs, has paid cumulative dividend including tax (Equity & Preference) of ` 5,742.43 lakhs till 2013-14 and has made a provision of ` 127.97 lakhs towards Dividend on Preference Shares and ` 966.19 lakhs towards Dividend on Equity Shares including dividend distribution tax thereon in 2014-15. The cumulative income tax to the exchequer amounting to ` 35,222.96 lakhs has been paid / provided till 2014-15.

10.0 EARNING PER EMPlOyEE

Operating Turnover per employee per year is as follows:

2011-12 2012-13

Year

OPERATING TURNOVER PER EMPLOYEE

In `

Lak

sh

2013-14 2014-15

30

20

10

0

643.83511.65

341.29 389.92

0

100

2011-12 2012-13 2013-14 2014-15

200

300

400

500

600

700

Year

Turnover

In

Cro

res

`


28


11.0 FuTuRE BuSINESS vISION

Economic growth has a two-way linkage with Industrial growth. The multiprong governmental approach for economic revival shall entail investment resurrection and steady industrial growth in the long run. Your Company has a unique opportunity of executing a number of prestigious assignments in the Steel Sector, which is a traditional core competence area of the Company. In order to capitalize on this opportunity, technologically oriented turnkey project execution is the need of the day for your company. Your clients expect the Company to contribute immensely in the national steel building capacity in the next 10 years. Your company has already diversified its product and clientele to minimize market vagaries and is fully geared up to harness the prospective opportunities in areas other than Metals. Your company is under way for structural changes to derive the best benefits through reorganization of the Marketing Division with special focus on EPC projects for procurement of new orders and realignment of the execution groups for more efficient deliveries. Mining & Mineral and Infrastructure sectors, which are experiencing resurgence in alignment with the Governmental initiatives are springing up business opportunities for your company. Your company is participating in the process of rebuilding through innovation and latest technology assimilation by transferring and sharing experience and expertise of market leaders. Your company is fully prepared to meet market expectations and challenges and is poised to play an enhanced role in socio-economic transition of the country.

12.0 RESEARCH & DEvElOPMENT

Commitments to R&D are essential in the present Indian scenario. Make in India focus is going to be one of the key areas on which our laboratories and research institution are going to work by identifying the problems of the country and solve these problems with technology. For Make in India, R&D plays an important role in augmenting the capabilities of the company through innovations in

idea, design etc. which can be a source of potential values, when it comes to gaining competitive advantages. MECON encourages to protect the innovation by filing IPR. Innovation results in high quality jobs, successful business, better goods and services and more efficient process.

An IPR is granted for an invention which is a new product / process, that meets condition of novelty, non-obvious and industrial use. Innovative step is the features of the invention that involves technical advances as compared to existing knowledge and that makes the invention not obvious to a person skilled in the art. Industrial use means that the invention is capable of being made or used in an industry.

R&D of MECON mostly undertakes Applied Research and Experimental Development in the core area of business such as Iron and Steel as well as focused areas of national importance such as Defence, Environment etc. In recent years, your company is engaged in R&D works sponsored by MECON itself and other external funding agencies such as DRDO, DST, Ministry of Environment, Ministry of Steel, Private Sectors also.

Projects Completed

IR Camera based ladle Condition Monitoring System

The ladle breakout is a dangerous event which involves a potential risk of personal injuries and loss of life. The ladle breakout also involves equipment damage and loss of production. Research in the line of early detection of refractory wear out in ladle lining is being persuaded all over the world as a programme of preventive maintenance. The present practice in steel plant is mainly through the observation of hot spot with naked eyes, which fails to take preventive action long before a critical situation occurs. The most convenient method of estimating the refractory life of ladle

29



lining is from temperature distribution monitoring of container shell with the help of infrared camera. The project “Infrared Camera Based ladle Condition Monitoring System” was sanctioned by Ministry of Steel, Govt. of India from Steel Development Fund (SDF). In this project three infrared cameras are used to grab the thermo-graphic images of the ladle surface area for automatic detection of hot spot. The system was commissioned and trial run was successfully carried out at SMS-II of RSP, SAIl, Rourkela with indigenously designed and developed software MEClAD. The figure shows the screen shot of MEClAD, Graphical user interface. One technical paper “Infrared Camera Based ladle Condition Monitoring System” was presented in 4th International Conference on Automation and Information Technology in Iron and Steel Making (AITISM’14), held on 5th to 7th Feb., 2014, at Ispat Bhawan, Research and Development Center for Iron and Steel (RDCIS), Ranchi.

The figure shows the thermographic image obtained during technology demonstration highlights the development of hotspot in the slag zone and bottom part of the ladle after 53 heats indicating potential risk of breakout. The ladle was immediately taken out of circulation after physical verification. Application for filing patent for the above mentioned development is in process.

Basic system design and calculation on Solid State Cooling Drinking water Tank for Armoured vehicles.

(MOU project with Ministry of Steel. Completed successfully with excellent MOU rating)

Developed basic system of Solid State Cooling Drinking water tank by considering all the boundary condition

given for Armored Vehicles and based on our mathematical simulation. The solid state cooling is based on Peltier Effect. When current passes through two dissimilar materials (two different junctions), it result in a temperature change where one end gets heated and other end gets cooled. If the current is reversed, the heat is moved in the opposite direction. In other words, what was the hot face will be the cold face and vice-versa. The development of this basic design and simulation is the foundation for proceeding towards prototype as well as for final manufacturing of such cooling system for any armoured vehicles including Indian battle tank. This will also provide Physiological relief to the soldier. Under this project two papers published in national journal and one in international journal .

Online Non - contact Dimension Measurement in Steel Industry

(MOU project with Ministry of Steel. Completed successfully with excellent MOU rating).

In steel industry measurement of dimensions on finished products in every section like hot rolling mills, sms, coke oven and blast furnace side are difficult due to hazardous environment. By using computer vision technology with special purpose optics for obtaining required gauging accuracy one can solve the problem of non-contact dimension measurement. The objective of the present study is to setup a non-contact gauging experiment using telecentric lens at MECON laboratory and develop the software in lab VIEW. The project was a part of MoU R&D project for the year 2014-15 and was completed successfully with excellent rating. One technical paper "On line non contact dimension measurement


30


in Steel Industry" was presented at National Symposium on Instrumentation (NSI-39) at Haridwar as performance indicator in MoU with Ministry of Steel. Under this project one paper is accepted for publication in National Journal.

Environmental Impact Assessment (EIA) on Ozone gas at RSP, Rourkela

The objective of this project is to monitor ozone gas in ambient air around RSP for setting up of 3 Mtpa HSM, 3.3 Mtpa beneficiation and 2 MT pellet plant within the premises of RSP, Rourkela.

Ground level ozone is one of the most widespread and dangerous air pollutants. Ozone is created by chemical reactions between oxides of nitrogen (NOx) and volatile organic compounds (VOC) in the presence of sunlight. Emissions from industrial facilities, electric utilities, motor vehicle exhaust, gasoline vapors and chemical solvents are some of the major sources of NOx and VOC. Breathing ozone, a primary component of smog, can trigger a variety of health problems including chest pain, coughing, throat irritation, and congestion. It can worsen bronchitis, emphysema, and asthma.

MECON R&D has successfully developed an indigenous UV spectroscopy based prototype capable of continuous online monitoring of the ozone present in the ambient air Using this indigenously developed ozone monitor, the ambient air quality monitoring around RSP was successfully carried out as per Terms of Reference (TOR) prescribed by MoEF, Govt. of India. Reports had been submitted to Environmental Engineering Section of MECON Ranchi, for onward communication.

On-going Projects

Conceptual Design & Simulation of Air warrior Body ventilation vests for Defence personnel.

The objective of this project is to develop conceptual design based on our simulations, on light weight, Air warrior body Ventilation Vests for Defence Personnel to be worn under Inceptor body armour. It is basically circulating cooled air underneath the vest to keep the soldier dry which, in a sense, will keep them cool even on hot environmental condition. System requires to extract around 50 Watts of metabolic heat from human body at an ambient of 500C, which will be operated by a portable blower & rechargeable battery. Air warrior body Ventilation Vests is a light weight, comfortable, breathable, tube/jet undergarment worn against the skin. It provides cooling to circulate a cool air to the torso of body to remove metabolic heat from personnel working in heat stress environments, which gives the thermal comfort and increase the mission duration.

Development of non-contact linear displacement sensor and optical limit switch by laser spotting at R&D Division of MECON, Ranchi

The objective of this project is to develop a proof of concept experimental setup utilizing laser sources and digital image processing technique for linear displacement sensor and optical limit switch application. As shown in the accompanying schematic diagram, the cross point of the laser sources (marked by positive A) is considered as the optical limit position. The software is proposed to be developed to continuously detect the laser spots onto the object surface and calculate the distance (d) between the two spots. As the object moves towards the limit position “A”, the spot distance “d” decreases and at “A” the spot distance is theoretically zero. The benefit of the system is that the displacement of an

31



object at a long distance can be sensed and the limit position “A” can also be changed by altering the laser positions and inclinations. The system has application potential in steel plants for automatic positioning of materials with the help of overhead cranes. The project is MoU R&D project for the year 2015-16.

Develop Procedure for Joining Next Generation High Temperature Material to be used for supercritical / ultra supercritical power plant by Friction Stir welding

To establish the Friction Stir Welding in high temperature material such as P91, P92 in supercritical & ultra-supercritical power plant that will enable thermal power plant to operate at higher pressure & temperature (beyond critical point of water). This in turn will provide higher plant efficiency, lower operating cost, reduced emission & higher reliability. This will also provide to generate adequate power with our limited resources and will minimize the gap between demand and generation.

localized induction heat treatment of steel blank for automotive application.

The main objective of this project is to develop lab scale tailored made blank with different combination of microstructure and mechanical properties suitable for auto component and to produce automotive components using localized Induction heat treatment technique; so that complex heat treated sections can be produced during this special process within a single blank. In this research, the main purpose of this work is to investigate the surface hardening process on a microstructure level. It is mostly used in our Automobile Industry. Project proposal and techno commercial offer has already

been submitted to R&D Centre of TATA Steel for their consideration.

Development of Infrared camera based Torpedo ladle Car (TlC) condition monitoring system

The ladle breakout is a dangerous event which involves a personnel injuries and loss of life. The ladle breakout also involves equipment damage and loss of production. The present practice of steel plant for detecting refractory wear out is mainly through the observation with naked eye. Research for early detection of ladle refractory wear out has been taking place all over the world. The objective of the project is to study the refractory wear out of the torpedo ladle car with the help of a group of infrared imaging devices and development of an early warning system for preventing torpedo ladle breakout. letter of Interest was received from RSP, SAIl, Rourkela. The project proposal has been submitted to Ministry of Steel for funding.

Commercialization of Thermoelectric Cooled helmet for industrial application

Commercialization on Thermoelectric Cooled helmet for industrial application is under active consideration at Bhilai Steel Plant, SAIl.

No. of patents under process

1. On-line led Opacity Monitor for a Duct, Chimney or Stack. Patent No. 1394/KOl/2006.

2. Solid State / Thermo-electrically Heated Oil / Diesel filter for Automobiles in Cold Regions. Patent Filing No. 1429/KOl/2007.

3. An improved Stove for Blast Furnace and a Method of Fabricating the same. Patent Filing No. 95/KOl/2009.

4. Infra Red Imagery Based Slag Detection System for Basic Oxygen Furnace (BOF)


32


Converter. Patent Filing No. 1247/KOl/2009.

5. Continuous NOX Monitoring System. Patent Filing No. 1248/KOl/2009.

6. Hybrid Thermoelectrically cooled / heated Back-packed Air Circulating Helmet System. Patent Filing No. 1111/KOl/2013.

No. of Patents “Applied For”

1. Thermoelectrically Direct Cooled/Heated Helmet for Various Industrial Applications

2. Non- Dispersive Infrared (NDIR) Multigas Monitor

3. Infrared Camera based ladle Condition Monitoring System

4. 1.2 Mt./Yr. Pellet Plant, Design and Development

Recognition of MECON R&D

Renewal of recognition of your Company's, R&D by DSIR, Govt. of India has been obtained for four year (i.e. 31.03.2016).

13.0 CONSERvATION OF ENERGy AND TECHNOlOGy ABSORPTION

13.1 Conservation of Energy

Steel production is energy intensive process. Iron and steel production consumes enormous quantities of energy, especially in developing countries where outdated, inefficient technologies are still in use to produce iron and steel. Energy constitutes a significant portion of the cost of steel production, from 20% to 40% in some countries. However, sophisticated energy management systems ensure efficient use and recovery of energy throughout the steelmaking process for reuse, wherever possible. Improvements in energy efficiency have led to reductions of about 50% energy required to produce a tonne of crude steel in most of the top steel producing countries since last two decades.

The steel industry is the single largest industrial energy consumer, accounting for about 4% of the world's energy consumption.

A number of established energy saving measures / technologies have been suggested by your Company to various steel plants either at design stage or at upgradation / modernization stage of project in India to save energy in different units of an integrated steel plants, resulting in saving in scarce, high priced coking coal, saving in import of coking coal and resultant reduction in production costs. The major energy saving measures / technologies in various area of steel production, suggested are summarized below.

A. Coke Making

Coal moisture control

Carbonization control

Coke Dry Quenching (COQ) technology to utilize the sensible heat of hot coke for power generation

Recovery of sensible heat of coke oven gas (COG)

Computerised Oven Heating Control (COHC) system

SCOPE-21 Project as new coke making technology which reduces energy consumption substantially

B. Sinter Making

Sinter cooler exhaust gas waste heat recovery

Sinter machine proper waste heat recovery

Sinter bed depth increase (optimization) and segregation of raw materials while charging

Adoption of variable speed drive for exhaust fan, cooler fan, etc.

33



Ignition furnace efficiency enhancement and combustion control

Use of hot air from cooler charging end to ignition furnace

High intensity mixing & nodulising of sinter raw mix.

C. Pelletising

Optimized induration with fuel efficient burners with integrated automation system.

Improved process fan design with VVVF drives for higher process efficiency.

D. Iron Making (through conventional Blast Furnace route)

Slag volume reduction

Heat recovery from waste gases of hot blast stoves

Cold blast main insulation

Improving blower efficiency

Injection of auxiliary fuels (i.e., pulverized non-coking coal) in Blast Furnace to reduce coke rate

Use of top pressure recovery turbines (TRT)

Extensive use of WVF drives for BF main charging conveyor, combustion air fan, etc.

Adoption of fully covered troughs and runners in cast house.

Recommending the use of Torpedo ladle Cars for hot metal transportation for medium to large capacity Blast Furnaces (> 1000 m3 volume)

Provision of high top pressure operation for Blast Furnaces of all size ranges (including MBFs)

Bell less top charging system

E Iron Making (through Coal based/ Gas based Direct Reduction route)

Recover/ of sensible heat for power I steam generation

Use of by-product (i.e. char) for power generation in AFBC based power plant

Adoption of variable speed drive for ID fan.

Adoption of increasingly large sized modules for optimum benefits

Use of turbo-expander for power generation using pressure energy of incoming reductant / fuel gas.

Use of process gas heater flue gases in preheating of combustion air and fuel gas

Use of centrifugal compressors

F. Steelmaking and continuous casting

Recovery of sensible heat of BOF gas

Adoption of combined blowing technique

Adoption of foamy slag practice to reduce power consumption in electric Arc furnace

Maximum addition of hot metal in charge mix of EAF

Adoption of hot DRI/HBI charging in EAF

Adoption of continuous casting route to replace energy inefficient ingot casting route

Adoption of thin slab casting technology along with tunnel furnace and finishing stand of hot strip mill which results in substantial saving in energy

Waste heat recovery system in submerged arc furnace in ferro alloys plant


34


G. Rolling

Hot direct rolling connecting directly Continuous Caster with Rolling Mill.

Hot charging of continuously cast products in order to utilize the sensible heat of continuously cast slabs/billets/blooms

Regenerative burners in reheating furnace as well as for continuous annealing line/galvanizing line

Endless rolling in Flat Rolling (Hot) Mills/Endless Welding & Rolling in Bar Mills

Near net-shape Casting and Rolling

Slit rolling for smaller dia rebars

Robo handling in railway wheel production plant and avoidance of intermediate reheating

H. Electrical

Use of compensating equipment (Capacitor Bank & SVC) on primary distribution system

Use of energy efficient motors, energy efficient lED luminaries in ongoing and future projects.

Use of solar energy for street lighting for on going projects

Use of energy saving variable frequency drives and lCI drives for high capacity motors

Use of regenerative drives for cranes and rolling mill application

Apart from the technologies mentioned above, there are some other energy saving technologies also in steelmaking, casting and rolling mills area. MECON has taken into consideration the energy saving technologies, mentioned above, during design of various steel plants, based on the technology

available and the prevailing practices. On adopting the above mentioned various measures of energy saving technologies, the specific energy consumption per tonne of crude steel can be reduced to 5.5 - 5.8 GCal/t from 7.0 GCal/t in Indian context.

13.2 Technology Absorption

The detailed information on technology absorption as per Section 134(3) read with Rule 8 of Companies (Accounts) Rules 2014 is enclosed at Annexure-I to this Report.

14.0 FOREIGN EXCHANGE EARNINGS AND OuTGO

Your Company has earned ` 304.46 lakhs Foreign Exchange during the year 2014-15. The expenditure in Foreign Exchange remitted / actually spent during the year is ` 199.91 lakhs as per details given below.

Particulars (` in lakhs)

• Professional & Consultation Fees. 15.34

• Other matters 184.57

Total 199.91

15.0 HuMAN RESOuRCE DEvElOPMENT

In a knowledge based company Services, Processes and Business Models can be copied, but the organizational competence i.e. the Human Capital is unique in nature.

In the intensified competitive markets, with the focus on quality and competence, it has been a challenging task to have the right alignment of man power to drive effectively towards excellence. So, to unleash People potential through learning and Developmental initiatives, HRD Section conducts regular technical and soft skills training along with knowledge sharing sessions to maintain a cadre of professionals, updated with the latest technological advances in several areas of business.

HRD section has achieved 2192.5 Man days against the MoU target of 1250 Man days for training in

35



2014-15. This achievement of MoU target is rated under the ‘Excellent’ category.

key activities undertaken by HRD in the year 2014-15 are mentioned below:

During the course of 2014-15, major Technical In-house Programs conducted for our executives include ‘Tendering & Procurement for Projects in PSUs’ inviting dignitaries from several reputed PSU clients of MECON, ‘Auto CAD-3D’ training to 5 batches of executives, Workshop on ‘Different Modules of Coke Oven Batteries for proposed SAIl Corporate Plan 2025’ inviting executives from several Steel Plants, ‘Energy Management’, Workshop on ‘Technology and Product Selection for Various Sizes of Steel Plants’, ‘Basics of Welding and Inspection’, ‘Contracts Management and related Vigilance aspects’, ‘Private Public Partnership & Infrastructure Finance’ and ‘GIS Software’.

Knowledge Sharing sessions have been conducted through domain experts of several sections on ‘Better interface between Civil/Structural and other Engineering & Technological Sections’, ‘ESP for Process Gas Waste Gas Cleaning’, ‘Modern Blast Furnace project execution’, ‘Recent trends in Mining & Beneficiation Technology’, ‘Roles & Activities of Met. Wing’, ‘Companies Act 2013’, ‘Competency Mapping system’, ‘Performance Management system’, ‘Role & Activities of Gl & T’, ‘Viability of Industrial Projects- by MAS’, ‘Roads & Topographical survey using satellite imagery, GIS & lIS and their relevance to MECON’, ‘Air Pollution Dispersion Modeling’, ‘Awareness on Gas Cleaning Plant’, ‘Tender & Contracts Management - Vigilance Aspects’, ‘Available Technologies for Coke Oven, Scope- 21’, ‘Sales & Service Tax’ and Experience sharing through young engineers.

Apart from the technical skills, in-house trainings on ‘Internal Quality Auditing as per QMS ISO 9001: 2008’, ‘Introduction to ISO QMS 9001:2015’, soft skills trainings on ‘Professionalism & Communication’ for 3 batches of executives, ‘Stress Management’, ‘How to be a good manager’ and ‘Assessment & Development Centre for prospective leaders’ has been conducted.

Our executives have been deputed to several reputed institutes for Technical and Skill related trainings in various business domains. Few prominent External trainings undergone by employees in 2014-15 are Gas Pricing: Implication for the Industry, Best Practices for Maintenance of Bulk Material Handling Systems, Steel Mill Rolls, Sustainable Development and Inclusive Growth of Mining Industry, Pipeline Integrity Management, Iron Ore Beneficiation & Pelletization Technologies, Mining Equipment Selection for Opencast & Underground Mines, Coal Market in India, Enhancing Institutional and Community Resilience to Disaster and Climate Change, Structures with steel design refurbishing retrofitting, Emerging Trends in Metals & Mineral Sector, Green Building Congress -2014, GRIHA, Green Rating for Integrated Habitat Assessment, Hybrid Power Generation Systems, Energy Efficiency Advancement Method for Industries: Trend and Innovation, Non-Destructive Evaluation (NDE 2014), Zero liquid Discharge: Technology and Environmental Policy, Indian Steel Industries: Opportunities and Challenges, PlC System, Detection and Mapping of Underground Utilities, Certified Welding Inspector course, Ultrasonic Testing level-II as per IS: 13805, Numerical Relay & Protection /Control Systems & Course on Radiographic Testing level-II.

Regarding redeployment and rationalized utilization of Non Executives, in-house


36


Computer Awareness training was conducted for two batches, subsequent to which 15 nos. of best performers were imparted in depth certified training on ‘MS Office and Internet usage’ by NIIT, Ranchi.

Special emphasis in 2014-15 was given to the training on “Certificate Course in Project Management and enhancing Commercial Acumen”, conducted subsequent to the activity for identifying Project and Marketing acumen of executives and in accordance to the guidelines in Template for HRM Performance Evaluation under MoU. Out of the total 30 participants, 24 were certified by Q Value Services, Project Management Institute, USA.

Apart from organizing the regular training programs, HRD has also facilitated many Technical Presentations by reputed private companies, Seminars and Expert talks by eminent personalities including the several events under celebration of Public Sector Week, World Environment Day, Vigilance Awareness Week and Productivity Week to enhance awareness and knowledge of the employees.

16.0 PERSONNEl & wElFARE

Employee strength of MECON at the end of the year i.e., as on 31.03.2015 was 1563 (including 5 Nos. MT(T)s under training as per Apprentices (Amendment) Act, 1973 & 1986) as against last year’s strength of 1673. Out of the total strength of 1563, 285 belong to SC and 165 belong to ST categories.

16.1 Sexual Harassment of women at workplace (Prevention, Protection and Redressal Act, 2013)

Number of Cases filed Number of cases disposed.

Nil Nil

17.0 INDuSTRIAl RElATIONS

The Company focused on employee relationship and all employee related matters were addressed leading to greater satisfaction of the employees. The work atmosphere remained healthy and harmonious and this helped the Company to achieve better productivity. The Company continued to have peaceful and cordial relations with the employees and most of the issues were settled through interactions and dialogue with the representatives of Non-Executive and Executive employees. liaison with other associated external agencies was also maintained cordially.

18.0 ACTIvITIES / STEPS TAkEN FOR THE wElFARE OF SC / STs IN THE COMPANy.

In addition to its corporate and business objectives, the Company is fully aware of its social responsibilities for development and welfare of members of Scheduled Caste/Scheduled Tribe Communities. The strength and number of SC/ST candidates presently employed in your Company are indicated below.

Cat./Group

Man-power as on 31st

Mar.,15

No of SC

No of ST

% age of SC

% age of ST

No of

PwD

% of

PwD

A 1368 250 89 18.3 6.5 6 0.4

B 72 17 25 23.6 34.7 1 1.4

C 62 3 24 4.8 38.7 2 3.2

D(excluding

Safai worker)

58 14 27 24.2 46.6 2 3.4

D(Safai

worker)

3 1 0 33.3 0 0 0

Total 1563 285 165 18.2 10.5 11 0.70

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The Company has adopted adequate measures for safeguarding their interests and welfare, such as promotion as per general trend, proper regard for human rights, equality and impartiality in all spheres of activities and providing abundant opportunities for self development through sports, cultural, educational and recreational facilities. Scheduled Caste / Scheduled Tribe employees and their families residing in Shyamali Township enjoy all the facilities available to others.

In order to implement the Government of India Directives and Post-based Rosters with regard to recruitment and promotion of SCs/STs, an SC/ST Cell has been formed with Deputy General Manager as liaison Officer. The SC/ST Cell maintains proper record regarding recruitment and promotion and statistics of SC/ST employees and furnishes reports to the Ministry of Steel on regular basis.

The Company has made consistent efforts to accommodate SC/ST candidates in all recruitments in MECON as well as in promotion to the next higher grade as per Government Directive.

19.0 CORPORATE SOCIAl RESPONSIBIl-ITy AND SuSTAINABIlITy (CSR&S) DEvElOPMENT

Information on CSR activities undertaken by the Company as required under Section 135 of the Companies Act, 2013 is enclosed vide Appendix-II.

20.0 OFFICIAl lANGuAGE POlICy (uSE OF RAJBHASHA)

your Company is effectively implementing the Official language Policy of Govt. of India in its official work and also making all out efforts to achieve the targets fixed in the Annual Programme issued by Rajbhasha Vibhag, Ministry of Home Affairs, Govt. of India. For this purpose, there is an Official language Implementation Committee under the Chairmanship of CMD. Hindi Training classes are being organized for Non Hindi speaking employees. Hindi workshops are being

organised for the employees having proficiency in Hindi. MECON is an important member of Town Official language Committee, Ranchi and actively participates in all the programme.

Your Company has been awarded with Excellent Prize & Certificate by the Mahanagar Samanyvay Samiti, Kolkata under the agies of Kendriya Sachiwalaya Hindi Parishad, New Delhi in the Rajbhasha conference, 2014 held in Kolkata on 25th July, 2014.

Director (Admn.) & Joint Director (Ol), Ministry of Steel, Govt. of India, New Delhi and Research Officer (Implementation) & Incharge, Regional Implementation Office (ER), Rajbhasha Vibhag, Govt. of India, inspected the progressive use of Hindi in Mumbai, Delhi, Bokaro, Ranchi, Durgapur, Burnpur & Kolkata Offices of the company.

"Hindi Pakhwara" was observed at Head Office as well as in all site offices of the company from 14.09.2014 to 28.09.2014. On this occasion all employees took a pledge to increase use of Hindi in their day to day official work. During the "Hindi Pakhwara" competitions of various nature were also organized at Head Office and other offices of the Company. These include Hindi Essay and Extempore Speech in Hindi. On the occasion of Hindi Pakhwara Samman Samaroh, CMD distributed prizes to the winners of various Hindi competitions. A special Hindi workshop and one Rajbhasha symposia on "Computer per Hindi me Unicode ka prayog karne kee vidhi" were organised during the Pakhwara. Beside, your Company also observed "Rashtrakavi Ram Dhari Singh 'Dinkar' Jayanti" during Hindi Pakhwara.

Secretary, Department of Official language, Ministry of Home Affairs, Govt. of India also visited our Head Office on 8th October, 2014 and held discussion with senior officials of our company with regard to Hindi Implementation. Director (Implementation) Regional Implementation Office (ER), Rajbhasha Vibhag, Govt. of India were also present during the visit of Secretary, Department of Official language.


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A Hindi House Magazine - "MECON BHARATI" is being published regularly. This magazine provides a platform for Employees for creative writing in Technical field in Hindi. News items in Hindi are being published in 'MECON SANSAR', the quarterly in-house journal of MECON.

21.0 vIGIlANCE ACTIvITIES

The Vigilance set up of the Company has been functioning independently under Chief Vigilance Officer (CVO) since its establishment. Presently, Smt. Supriya Jaiswal, ITS is the Chief Vigilance Officer who took over charge as Full Time CVO of MECON on 1.6.2012. During the subject period, CVO has been assisted by Dy.General Manager I/c (Vigilance) and Vigilance Department at Ranchi. Vigilance activities of Bokaro and Rourkela Offices are handled by Vigilance Department, MECON, Ranchi. At Regional/Site Offices, Vigilance Officers who are senior officials of your Company look after vigilance activities. VO posted at Bangalore Regional Office devotes his full time in handling vigilance activities and VOs at other Regional/Site Offices look after vigilance activities in addition to their normal official duties allotted to them.

Emphasis is laid on preventive vigilance, spreading awareness, surveillance and analysis of system & procedures in detail to ensure optimum utilization of resources, appropriate & timely decisions, corrective action against defaulters and transparency & accountability in the system.

Complaints are investigated promptly as and when received. Sensitive sections/areas in the organization have been identified and thrust is laid on conducting Surprise Inspections, Regular Inspections, Scrutiny of Files and Studies in these areas. MECON Vigilance draws up Yearly Action Plan regarding these activities and ensures that targets set in the action plan are achieved. Suitable suggestions are given for improvement in the system/eliminate discrepancies found, if any, during the above activities. A number of suggestions given by Vigilance Department for systemic improvement

and streamlining various procedures have been implemented and the process is continuing. Job rotation is an ongoing process in the Company based on job requirement with specific reference to officials working in the sensitive areas.

Online Vigilance Clearance System with computerized database of vigilance records of individual employees of the Compnay has been implemented from November 2012 for the purpose of vigilance clearance/status of employees in case of promotion, resignation, retirement etc.

Annual Property Returns (APRs) in respect of Immovable Property are submitted by employees in the beginning of every year for the preceding year in the format prescribed. Online system for submission of Annual Property Returns has been implemented from January 2012. APRs for the year 2014 have been submitted by the employees. The database of APRs of employees is maintained by Vigilance which are continuously scrutinized and checked to find out discrepancies, if any, and clarifications/confirmations are obtained from concerned employees in case of any discrepancy. As per the guidelines received from Ministry of Steel/DOPT, henceforth all employees of the Company are 'public servants' and required to submit declaration of assets and liabilities (as on 31st March) under the 'The lokpal and lokayuktas Act, 2013' in the prescribed format by 31st July of every year. However, for the year 2014, the last date for submission of the above said declaration (as on 1st August 2014) has been extended upto 15th October 2015.

Integrity Pact is functional in your Company since 2007. Presently, your Company enters into Integrity Pact with vendors/ suppliers/ contractors having transactions of Rs.1.0 crore (Rupees One Crore) or more. Till date, it has signed Integrity Pact (IP) with 80 suppliers/contractors. There is an Independent External Monitor (IEM) in position to oversee the process of procurement and transactions where Integrity Pacts are signed between your Company and counterparties. At present, Shri Bharat Prasad

39



[Ex-Director (Marketing), Heavy Engineering Corporation ltd., Ranchi] is the IEM. So far no representation/ complaints/ disputes have been received under IP.

Various programmes, seminars, workshops, talks, interactive sessions and quiz competitions are organized by Vigilance Department on vigilance aspects for employees on regular intervals.

Vigilance Awareness Week is also observed every year in the Company. The Vigilance Awareness Week–2014 has been observed from 27th October to 1st November 2014 at Head Office, Ranchi as well as at all Regional/ Site Offices, in which the employees participated with enthusiasm. This year the theme of observing Vigilance Awareness Week was 'Combating Corruption – Technology as an enabler'.

The Vigilance Awareness Week-2014 commenced with the Pledge Ceremony on 27th October, 2014 which was attended by CMD, Directors, senior officials and employees. Banners displaying observance of Vigilance Awareness Week-2014 were displayed at prime locations in the office premises and various programmes like training cum interactive sessions, talks, debate, etc. were held keeping in view the above theme. A Drawing cum Poster Competition was also organized on 31st October 2014 at Jawahar Vidya Mandir School, Shyamali for the students on the topic 'Corruption Free India’ which had an overwhelming response. Around 75 students participated in this competition and the extent of imagination and creativity of the students were found to be amazing. The Closing Ceremony was held on 1st November 2014 which was presided over by Shri A.K.Tyagi, CMD, MECON. Shri S.Chattopadhyay, Director (Projects), Shri D.Dutta, Director (Commercial), Shri S.R.Sengupta, Director (Technology) and Shri A.P.Singh, Director (Engineering) and other senior officials attended the Closing Ceremony alongwith employees. CVO, MECON welcomed the employees in the Closing Ceremony and gave a brief on the programmes held during the week followed by distribution of prizes to

the winners of the Debate Competition and Drawing Competition. Mementos were also presented to the speakers of various sessions. Similar programmes were also organized during the week at Regional/Site Offices at various locations.

lot of work has been done in the front of computerization and leveraging technology so as to curb the loopholes and bringing in desired transparency in various activities. Complaint Handling Policy has been uploaded on the Compnay's website with a provision of lodging complaint online which is accessible to common individuals. Whistle Blower Policy and Fraud Prevention Policy have also been uploaded on Company's website.

Handbook of CVC Circulars & Guidelines, Resolution on Public Interest Disclosures & Protection of Informer (PIDPI), Integrity Pact and RTI Manual have been uploaded in the Vigilance tab available on Company's Website. Contact Details of CVO and Senior Officials of Vigilance, Organizational Structure of Vigilance Department, Vigilance Quality Policy and ISO Certificate of Vigilance Department have also been uploaded. Relevant circulars and guidelines from CVC and statutory authorities, as and when issued, are put in the inhouse intranet 'meconinfo' for wider circulation among the employees. Vigilance articles are also published in the inhouse publications whenever possible. As regards Annual Performance Appraisal, final ratings given to the Executives for the year 2013-14 have been communicated to respective Executives through intranet.

Your Company is pleased to inform you that MECON Vigilance has its own Vigilance Quality Manual and follows a well-established Quality Management System ISO 9001:2008. A certificate to this effect has been obtained from TUV India which is valid upto 26.11.2015. The Yearly Surveillance Audit (2014) of Quality Management System (QMS) of Vigilance Department, of the Company has been conducted by TUV India on 13.10.2014 in which TUV India has expressed satisfaction over QMS being followed by Vigilance Department.


40


22.0 DEvElOPMENT AND IMPlEMENTA-TION OF RISk MANAGEMENT

your Company is committed to the continual identification, assessment / monitoring and management of risks associated with its overall business processes and operaions. Management is accountable to the Board of Directors for effective deployment of risk management strategies in all relevant areas of company operations. The Company’s risk management policies and procedures cover regulatory, legal, property, treasury and financial reporting. A clear organizational structure exists detailing lines of authority and control responsibilities. Each business unit is responsible and accountable for implementing procedures and exercise controls to manage risks within its business domain.

Company management has established within its management and reporting systems, a number of internal controls to mitigate the risks. These internal controls / processes are duly managed by the Company’s Board of Directors, management and other personnel, designated to provide reasonable assurance regarding the achievement of organization’s business objectives.

The Company has adopted Risk Management Philosophy in all spheres of its activities encompassing design, engineering, consultancy and contracting services through well laid and documented procedures.

An integral part of the annual strategic planning and budgeting process includes management evaluation of the key strategic, financial and operational risks facing the Company and identification of areas where action is required to minimize any exposure. Throughout the year, regular reviews are held at both the corporate and operational levels to identify and prepare action plans to address any new opportunities or risks that have arisen or likely to emerge since the previous

review. The management discusses all strategic and operational risks with members of the Audit Committee.

Risks associated with compliance and financial reporting are also shared with the Audit Committee. On quarterly basis, the management reviews of actual performance against the target budget and forecast are held with all supplementary data / documents.

The well established risk management and control systems thus described and adopted provide a reasonable assurance as to the realization of strategic objectives. Also, the framework is subject to constant monitoring and review to prevent / eliminate the instances of non-compliance with rules and regulations.

23.0 RIGHT TO INFORMATION

In line with the directives of the Government of India, your Company has implemented the Right to Information Act, 2005 from the date of its implementation. All relevant manuals pertaining to RTI Act, 2005 have been hoisted on the Company’s website www.meconlimited.co.in w.e.f. 19.09.2005 and are timely updated. A Public Information Officer (PIO) has been nominated by the Management at its Headquarters and various Asst. Public Information Officers (APIO) have been nominated at various Regional and Site offices of the Company. The queries coming to the Company from the public are being attended to by these nominated officials and replied back to the applicant by the Public Information Officer within the stipulated time period.

All the statutory returns are timely e-filed with the Ministry of Steel.

24.0 CHANGES IN BOARD OF DIRECTORS

Shri M.N. Sharif, Director (Technology) retired from the service of the Company on attaining the

41



age of superannuation on 31.10.2014.

Shri S.S. Torka, Director (Engineering) retired from the service of the Company on attaining the age of superannuation on 31.10.2014.

Shri S.R. Sengupta was appointed as Director (Technology) w.e.f 01.11.2014.

Shri A.P. Singh was appointed as Director (Engineering) w.e.f 01.11.2014.

Consequent upon transfer to Ministry of Information and Broadcasting, Govt. of India Shri V.K.Thakral, IAS, ceased to be the Director of the Company w.e.f. 12.03.2015.

Smt. Bharathi S. Sihag, IAS, AS&FA to the Govt. of India, Ministry of Steel was appointed as part time Government Director on the Board of the Company w.e.f. 16.03.2015.

25.0 MANAGEMENT DISCuSSION & ANAlySIS REPORT

The Management Discussion & Analysis Report covering the performance and outlook of the Company is enclosed vide Annexure-II.

26.0 CORPORATE GOvERNANCE

The company has complied with the requirements of Corporate Governance. The detail in this regard forming part of this report is enclosed vide Annexure-III.

27.0 AuDITORS

M/s. V.K. Jindal & Co, GG3, Shree Gopal Complex, 3rd Floor, Court Road Ranchi – 834001 (Jharkhand) were appointed as Statutory Auditors by the Comptroller & Auditor General of India to audit the accounts of the Company for the financial year 2014-2015. They have also been assigned to carry out the audit under Section 44AB of the Income Tax Act, 1961 for the year 2014-2015.

28.0 DIRECTOR’S RESPONSIBIlITy STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013 with respect to Director’s Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts for the financial year 2014-15 on a going concern basis; and

v) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

29.0 ACkNOwlEDGEMENT

Your Directors are pleased to place on record their appreciation for the contribution of all concerned towards the successful working of the Company during the year. The Directors also express their


42


sincere and grateful thanks to the Company’s trusted clients, suppliers, sub-contractors and other partners & stakeholders in business for enabling it to perform up-to the expectations of the customers.

Your Directors gratefully acknowledge the support, cooperation and guidance received from the Ministry of Steel, Government of India and various other Ministries, Govt. of Jharkhand and Departments of the Central and State Governments and Indian Embassies abroad.

Your Directors also place on record their

appreciation and also acknowledge the dedicated efforts of its employees at all levels for smooth functioning of the Company.

For and on behalf of the Board of Directors of MECON lIMITED

A.K.Tyagi Chairman-cum-Managing Director

Place: RanchiDate: 1st September, 2015

43



Annexure - A

FORM AOC- 2

(Pursuant to Clause (h) of sub section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

-----------------------------------------------------------------------------------------------------------------------------

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship NIl

(a) Nature of contracts/arrangements/transactions NA

(a) Duration of the contracts/arrangements/transactions NA

(a) Salient terms of the contracts/arrangements or transactions including the value, if any NA

(a) Justifications for entering into such contacts or arrangements or transactions NA

(a) Date(s) of approval of the Board NA

(a) Amount paid as advance, if any NA

(a) Date on which the special resolution was passed in the general meeting as required under first proviso to section 188 NA

2. Details of materials contacts or arrangements or transactions at arm’s length basis

(a) Name(s) of the related party and nature of relationship NIl

(a) Nature of contracts/arrangements/transactions NA

(a) Durations of the contracts/arrangements/transactions NA

(a) Salient terms of the contracts or arrangements or transactions including the value, if any NA

(a) Date(s) of approval of the Board, if any NA

(a) Amount paid as advance, if any NA

-sd/-

A.K. Tyagi, Chairman-cum-Managing Director


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Appendix - I

FORM NO. MGT 9EXTRACT OF ANNuAl RETuRNAs on financial year ended on 31.03.2015

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAIlS:

1 CIN U74140JH1973GOI001199

2 Registration Date 31.03.1973

3 Name of the Company MECON lIMITED

4 Category/Sub-category of the Company PRIVATE COMPANY

GOVERNMENT COMPANY

5 Address of the Registered office & contact details

VIVEKANANDA PATH P.O. DORANDA, RANCHI- 834 002 (JHARKHAND)

6 Whether listed company NO

7 Name, Address & contact details of the Registrar & Transfer Agent, if any.

NIl

II. PRINCIPAl BuSINESS ACTIvITIES OF THE COMPANy

(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

Sl. No.

Name and Description of main products / services NIC Code of the Product/service

% to total turnover of the company

1 CONSUlTANCY SERVICES 70.45%

2 CONSTRUCTION CONTRACTS 29.55%

III. PARTICulARS OF HOlDING, SuBSIDIARy AND ASSOCIATE COMPANIES

Sl No Name and address of the Company CIN/GlN

Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1 M/S METAllURGICAl & ENGINEERING CONSUlTANTS (NIGERIA) lTD.

Company No. 50468

JOINT VENTURE 50% 2(6) OF COMPANIES

ACT, 2013

45



Iv. SHARE HOlDING PATTERN

(Equity share capital breakup as percentage of total equity)

(i) Category-wise Share Holding

- NIl -

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change during

the year Demat Physical Total % of Total

Shares Demat Physical Total% of Total

Shares

A. Promoters

(1) Indian

a) Individual/ HUF 240 240 0.0006% 240 240 0.0006% 0.000%

b) Central Govt 40,138,120 40,138,120 99.9994% 40,138,120 40,138,120 99.9994% 0.000%

c) State Govt(s) - 0.000% - 0.000% 0.000%

d) Bodies Corp. - 0.000% - 0.000% 0.000%

e) Banks / FI - 0.000% - 0.000% 0.000%

f) Any other - 0.000% - 0.000% 0.000%

Sub Total (A) (1) - 40,138,360 40,138,360 100.000% - 40,138,360 40,138,360 100.000% 0.000%

(2) Foreign

a) NRI Individuals - 0.000% - 0.000% 0.000%

b) Other Individuals

- 0.000% - 0.000% 0.000%

c) Bodies Corp. - 0.000% - 0.000% 0.000%

d) Banks / FI 0.000% 0.000% 0.000%

e) Any other - 0.000% - 0.000% 0.000%

Sub Total (A) (2) - - - 0.000% - - - 0.000% 0.000%

TOTAl shareholding of promoter (A) = (A) (1) + (A) (2)

- 40,138,360 40,138,360 100.000% - 40,138,360 40,138,360 100.000% 0.000%

B. Public Shareholding

1. Institutions

a) Mutual Funds - 0.000% - 0.000% 0.000%

b) Banks / FI - 0.000% - 0.000% 0.000%

c) Central Govt - 0.000% - 0.000% 0.000%

d) State Govt(s) - 0.000% - 0.000% 0.000%

e) Venture Capital Funds

- 0.000% - 0.000% 0.000%

f) Insurance Companies

- 0.000% - 0.000% 0.000%

g) FIIs - 0.000% - 0.000% 0.000%

h) Foreign Venture : \Capital Funds

- 0.000% - 0.000% 0.000%

i) Others (specify) - 0.000% - 0.000% 0.000%

Sub-total (B)(1):- - - - 0.000% - - - 0.000% 0.000%


46


2. Non-Institutions

a) Bodies Corp.

i) Indian - 0.000% - 0.000% 0.000%

ii) Overseas - 0.000% - 0.000% 0.000%

b) Individuals

i) Individual shareholders holding nominal share capital upto Rs. 1 lakh

- 0.000% - 0.000% 0.000%

ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh

- 0.000% - 0.000% 0.000%

c) Others (specify)

Sub-total (B)(2):- - - - 0.000% - - - 0.000% 0.000%

Total Public (B) = (B) (1) + (B) (2) - - - 0.000% - - - 0.000% 0.000%

C. Shares held by Custodian for GDRs & ADRs

- 40,138,360 -

0.000% - 0.000% 0.000%

Grand Total (A+B+C) 40,138,360 100.000% 40,138,360 40,138,360 100.000% 0.000%

(ii) Shareholding of Promoters

SN Shareholder’s Name Shareholding at the beginning of the year

Shareholding at the end of the year % change in shareholding

during the year

0.000%

No. of Shares

% of total Shares of the

company

% of Shares

Pledged/ encum-bered to

total shares

No. of Shares

% of total Shares of the com-

pany

% of Shares Pledged / encum-

bered to total shares

1 PRESIDENT OF INDIA 40138120 99.9994% NIl 40138120 99.9994% NIl 0.000%

2 Shri Syedain Abbasi, IAS, Govt. Director 120 0.0003% NIl 120 0.0003% NIl 0.000%

3 Shri A.K. Tygai, CMD 120 0.0003% NIl 120 0.0003% NIl 0.000%

TOTAl 40,138,360 100.000% 40,138,360.00 100.000% 0.000%

47



(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

SN Particulars Shareholding at the beginning of the year Cumulative Shareholding during the year

No. of shares % of total shares No. of shares % of total shares

At the beginning of the year

- NO CHANGE -

Date wise Increase /Decrease in Promoters Share holding during the year specifying

At the end of the year

(iv) Shareholding Pattern of top ten Shareholders

(Other than Directors, Promoters and Holders of GDRs and ADRs):

SN For each of the Top 10 shareholders

Shareholding at the beginning of the year Cumulative Shareholding during the year

No. of shares % of total shares No. of shares % of total shares


- NIl -

Date wise Increase /Decrease in Promoters Share holding during the year specifying

At the end of the year (or on the date of separation, if separated during the year)

(v) Shareholding of Directors and key Managerial Personnel:

SN For each of the Directors and Key

Managerial Personnel (SHRI)

Shareholding at the beginning of the year Cumulative Shareholding during the year

No. of shares % of total Shares No. of shares % of total shares

1 S. ABBASI, GOvT. DIRECTOR


120 0.0003% 120 0.0003%

Date wise Increase /Decrease in Share holding during the year specifying the reasons for increase/ decrease

0.000% 0.000%

At the end of the year 120 0.0003% 120 0.0003%

2 A.k. TyAGI, CMD

At the beginning of the year 120 0.0003% 120 0.0003%

Date wise Increase /Decrease in Share holding during the year specifying the reasons for increase/ decrease

0.000% 0.000%

At the end of the year 120 0.0003% 120 0.0003%


48


v. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(Amt. Rs./lacs)

Particualrs Secured loans excluding deposits

unsecured loans Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount

- NIl-

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii)

Change in Indebtedness during the financial year

* Addition

* Reduction

Net Change

Indebtedness at the end of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii)

NOTE: 5% NON-CuMulATIvE REDEEMABlE PREFERENCE SHARES ISSuED TO THE GOvERNMENT OF INDIA

In `

OPENING AS ON 01.04.2014 25,200,000.00

lESS: REDEEMED DuRING THE yEAR 12,600,000.00

ADDITION DuRING THE yEAR -

ClOSING AS ON 31.03.2015 12,600,000.00

49



vI. REMuNERATION OF DIRECTORS AND kEy MANAGERIAl PERSONNEl

A. Remuneration to Managing Director, whole-time Directors and/or Manager:

SN. Particulars of Remuneration

Name of MD/wTD/Manager (*) Ex- whole time Directors

A.k. Tyagi S. Chattopahyay Deepak Dutta S.R. Sengupta A.P. Singh M.N. Sharif* S.S. Torka*

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

2754555.00 2514313.00 2323089.00 2462539.00 2271010.00 2688643.00 1529041.00

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

194352.00 177573.00 167812.00 84331.00 0.00 111685.00 106518.00

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

- - - - - - -

2 Stock Option - - - - - - -

3 Sweat Equity - - - - - - -

4 Commission

- as % of profit - - - - - - -

- others, specify - - - - - - -

5 Others, please specify - - - - - - -

Total (A) 2948907.00 2691886.00 2490901.00 2546870.00 2271010.00 2800328.00 1635559.00

Ceiling as per the Act

B. Remuneration to other Directors

SN. Particulars of Remuneration Name of Directors Total Amount

1 Independent Directors NIl

Fee for attending board committee meetings -

Commission -

Others, please specify -

Total (1) -

2 Other Non-Executive Directors Smt. B.S. Sihag, IAS and Shri S. Abbasi, IAS

Fee for attending board committee meetings -

Commission -

Others, please specify -

Total (2) -

Total (B)=(1+2) -

Total Managerial Remuneration -

Overall Ceiling as per the Act


50


C. Remuneration to key Managerial Personnel other than MD/Manager/wTD (*)

SN. Particulars of Remuneration key Managerial Personnel Total Amount

Name CEO Company Secretary CFO

Designation NA NA NA NA

1 Gross salary -

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

-

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 -

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

-

2 Stock Option -

3 Sweat Equity

4 Commission -

- as % of profit -

- others, specify -

5 Others, please specify -

Total NA NA NA NA

(*) Note: Since MECON limited is a Private limited Company, the provision relating to appointment of KMP is not applicable.

vII. PENAlTIES / PuNISHMENT/ COMPOuNDING OF OFFENCES:

TypeSection of the

Companies Act

Brief Description

Details of Penalty / Punishment/

Compounding fees imposed

Authority [RD / NClT/ COuRT]

Appeal made, if any (give

Details)

A. COMPANy

Penalty

Punishment NIl

Compounding

B. DIRECTORS

Penalty

Punishment NIl

Compounding

C. OTHER OFFICERS IN DEFAulT

Penalty

Punishment NIl

Compounding

51



Appendix - II

CORPORATE SOCIAl RESPONSIBIlITy (CSR) & SuSTAINABIlITy

1 a) Brief Outline of CSR & Sustainability Policy of MECON limited

The CSR & Sustainability policy of MECON (Based on the DPE guidelines and Companies Act’2013) was placed before the Board level Committee in their 5th meeting held on 10.12.2013. Subsequently, the Board in their 206th meeting approved it. It is available at MECON’s website: www.meconlimited.co.in.

MECON has the two-tier organizational structure within the organization to steer the CSR agenda. The Board level Committee comprising of an Independent Director & two full-time Directors alongwith a Nodal Officer (appointed by Board level Committee) & a team of officials (cross-section of employees) constitute the two-tier organization structure.

The annual budget for CSR and Sustainability is approved by Board of Directors.

The CSR plans are formulated and approved by Board level Committee (headed by Independent Director and two full-time Directors) and ratified by Board of Directors, as per Companies Act’ 2013 and DPE guidelines.

MECON shall spend in each financial year, at least 2.0% of the average net profits of the company made during the three immediately preceding financial years. Any unspent/unutilized fund of a particular year, is carried forward to the following year.

The overall responsibility of CSR plans lies with the Nodal Officer, CSR & Sustainability.

The Activities of CSR & Sustainability are as per Schedule-VII of The Companies Act,2013, with special attention to the development of weaker/marginalized/under privileged sections of the society including SC/ST/OBC/Minorities, women and children, old and aged, physically challenged etc.

All the CSR activities are implemented in project mode.

MECON being an organization with expertise in Engineering as well as Project Management, all the CSR projects are monitored by MECON.

The implementation and monitoring of CSR activities are overseen by the Board level Committee, which is headed by an Independent Director & two full-time Directors.

As per Board’s approved CSR & Sustainability policy, Impact Assessment for all completed CSR projects/ activities upto project cost of ` 50.0 lakhs are carried out by MECON. However, where project cost exceeds of ` 50.0 lakhs, the Impact Assessment is carried out by external agency.

MECON reports/discloses CSR activities to stakeholders through its official website: www.meconlimited.co.in and its Annual Report.

b) The details of CSR Projects approved by the Board of Directors are indicated at Annexure-I. The same is also available at MECON’s website: www.meconlimited.co.in

c) The main highlights of CSR Projects/ Activities undertaken by MECON during the year are as follows :


52


i) Swachh Vidyalaya – Swachh Bharat Abhiyan – Construction of New Toilets/ Repair of Dis-functional Toilets/ Installation of Pre-fabricated Bio-Toilets in MHRD Schools

ii) Rural Development Projects

iii) Preventive Healthcare and Drinking Water Projects

iv) Education, Employment enhancing Vocational Skills and livelihood Enhancement Projects

v) Projects for Old Age Homes, Orphanage, etc.

vi) Environmental Sustainability

vii) Other welfare activities/ Miscellaneous Programs

d) MECON’s CSR & Sustainability Policy is enclosed at Annexure-II. The same is also available at MECON’s website : www.meconlimited.co.in.

2. COMPOSITION OF THE CSR COMMITTEE

As per Department of Public Enterprises (DPE), Ministry of Heavy Industries & Public Enterprises, Board level Committee on Sustainable Development was constituted vide Memorandum of Circulation to the Board of Directors ref. no. 11/78/4(3)/117 dated 01.03.2012.

The Board level CSR & Sustainability Committee was reconstituted vide Item No. 203/3478 in the 203rd meeting of the Board of Directors of MECON on 19.09.2013.

The Board level CSR & Sustainability Committee was again reconstituted and approved vide Item No. 206/3542 in the 206th meeting of the Board of Directors held on 27.04.2014.

Thereafter, the Board level CSR & Sustainability Committee was again reconstituted vide Memorandum of Circulation to the Board of Directors ref. no. 11/78/4(3)/593 dated 03.11.2014.

The Board level CSR & Sustainability Committee consists of the following Directors :

i) Shri Syedain Abbasi, IAS Director – MECON & Joint Secretary, Govt. of India, Ministry of Steel

ii) Shri S.R.Sengupta Director (Technology) MECON limited

iii) Shri A.P. Singh Director (Engineering) MECON limited

The above details are also available in MECON’s website: www.meconlimited.co.in

3. a) Net Profit available for CSR for the last 3 financial years are as follows :

2011-12 : ` 20,126.24 lakhs

2012-13 : ` 15,046.72 lakhs

2013-14 : ` 6,842.54 lakhs

53



b) Average Net Profit for the last 3 financial years : ` 14,005.17 lakhs

4. Prescribed CSR expenditure (2%) of the : ` 280.10 lakhs amount for Financial Year 2014-15 is

5. Details of CSR fund spent during the financial year 2014-15, are indicated in Annexure-III. Manner in which the amount spent are as given below :

a) Total amount to be spent for the financial year 2014-15 :

i) Carry-over fund of previous years : ` 188.13 lakhs

ii) Allocation for financial year 2014-15 : ` 280.10 lakhs

______________

Total amount : ` 468.23 lakhs ______________

b) Total amount spent on CSR activities : ` 144.46 lakhs during financial year 2014-15

c) Amount unspent (to be carried to next : ` 323.77 lakhs

financial year, i.e., FY 2015-16)

6. Reasons for not spending the amount :

6.1 The majority of the CSR projects/activities are infrastructure development projects which takes time in conceiving the project, carrying out basic design & detailed engineering, tendering, drawing approval and then construction, etc.

Further, the mechanism of undertaking & executing CSR projects/activities in lWE (left Wing Extremism) affected villages/areas, through involvement of Gram Pradhan/ Gram Sabha for need assessment, making available the requisite land with NOC etc. is very time consuming.

In addition, the other responsible factors which affect the execution of project in lWE areas are :

i) Non-availability of good Contractors for working in such extremism affected remote villages of Jharkhand.

ii) Finalising Contractors to work in the lWE affected areas of Jharkhand is very difficult.

iii) Non-availability of skilled labour in extremism affected remote villages of Jharkhand.

iv) Threat perception for the workers, supervisors & contractors in the extremism affected remote villages of Jharkhand.

v) Transportation of building materials in extremism affected remote villages of Jharkhand. In addition, some sites are not connected with motorable roads.

vi) Carrying out construction activities in the lWE affected areas is a problem.

The above problems in lWE affected areas results in very slow progress of work and fulfillment of targets. This in turn affects the utilization of CSR funds.

6.2 In addition, the following projects as listed below could not be taken up due to the reasons as indicated :


54


i) Protection of Endangered Species of Plant and Trees (Sl.No. 4 (i) of list of New Projects for FY 2014-15) :

Request for permission was made to The Deputy Commissioner, Ranchi; CEO, Ranchi Municipal Corporation, Ranchi & The Chief Conservator of Forest in August ’14. But till today we have not received any Reply/Permission from the above offices in this regard.

ii) Training for livelyhood generation, Skill development etc. [Sl.No. 1 (iii) of the list of New Projects for FY 2014-15] :

For skill development training, M/s labournet was contacted and requested to furnish the copies of work orders received by M/s labournet & its NGO M/s Sambhav Foundation, from the similar skill development in villages from PSUs like - M/s HCl, Ghatshila; M/s GAIl, Union Bank, M/s Eastern Coal limited, Burdwan, etc. But till today, they have not submitted the same.

7.0 A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and policy of the company.

8.0 It is also affirmed that all the applicable clauses of Guidelines issued by DPE vide OM No.: 15(13)/2013-DPE(GM) dt: 21.10.2014 is being complied with.

Sd/- Sd-

A.P. SinghDirector (Engineering)

Syedain Abbasi, IASChairman (CSR Committee)

55



Annexure - I of Appendix - II 15.07.2014

Corporate Social Responsibility and Sustainability (Fy 2014-15) list of New Projects of CSR and Sustainability

SINo.

Projects Estimates in (Rs. lakhs)

Remarks

1 Promoting preventive Healthcare and Sanitation and making available Safe Drinking water

• Drinking Water Facilities in villages / rural areas (wells / tubewells etc.)

14.00

Sub-Total 14.00

2 Promoting Education, including Special Education and Employment Enhancing vocational Skills especially among Children, women, Elderly and the Differently Abled and livelihood Enhancement projects

• Training to the Blind Girls of Brajkishore Netraheen Balika Vidayalaya, Ranchi for Call Centre Operation

6.50

• Construction of 2nd Floor Hostel for Blind Girls at Brajkishore Netraheen Balika Vidyalaya , Ranchi.

20.00

• Construction of Classroom at Pramathanath Madhya Vidyalaya, Hinoo, Ranchi

8.00

Sub-Total 34.50

3 Promoting Gender Equality, Empowering women, Setting up Homes and Hostels for women and Orphans; Setting up Old Age Homes, Day Care Centre and such other facilities for Senior Citizens and Measures for reducing Inequalities faced by Socially and Economically Backward Groups

• Facilities at Old Age Homes 7.50

• Orphanage at Vill.-Sungi - Design & development of Dormitory, Kitchen, library etc.

10.00

Sub-Total 17.50

4 Ensuring Environmental Sustainability, Ecological Balance, Protection of Flora and Fauna, Conservation of Natural Resources and Maintaining Quality of Soil, Air and water

• Protection of Endangered Species of Plants & Trees 1.00

• Providing Solar Street Lights in Adopted villages/Other Villages/Institutions

- Already approved. MoU project for FY 2014-15

Sub-Total 1.00

6 Rural Development projects

• Training for Livelihood Generation, Skill Development etc. 10.00

• Construction of Water Supply System in adopted village (Vill.-Pancha)

10.00

• Construction of Toilet Block in adopted village (Vill.-Sungi) 40.00 MoU project for FY 2014-1 5


56


SINo.

Projects Estimates in (Rs. lakhs)

Remarks

• Construction of Akhra and construction of roof slab & finishing work of Community building in adopted village (Vill.-Pandu Toli)

3.10

• Projects in disaster affected areas of Uttarakhand 10.00

Sub-Total 73.10

7 Other Activities/Miscellaneous Programs

• Impact Assessment Report 5.00

• Tours & travels 6.00

• Training etc. 2.00

• Printed stationery, Banners, Signboards etc. 2.50

• Miscellaneous programmes 7.50

Sub-Total 23.00

TOTAl 163.10

57



Corporate Social Responsibility and Sustainability list of Regular/Carry-Over CSR and Sustainability Projects under Implementation

SI. No.

Projects Project Cost (in Rs.

lakhs)

Expenses done in Fy 11-12, 12-13 &

13-14 (in Rs. lakhs)

Expenses to be done in Fy

14-15(in Rs. lakhs)

Remarks

1 Promoting preventive Healthcare and Sanitation and making available Safe Drinking water

- Organising Health camps / Health Awareness Programs etc.

12.00

- Engagement of Doctors, Technicians, Driver etc, on Contract Basis for Health Camps

7.20

- Organising Specialised Health camps - Cataract, Family planning operation

2.00

- Providing Drinking Water facilities in villages/rural areas/institutions

13.690 6.400 7.290

Sub-Total 13.690 6.400 28.490

2 Promoting Education, including Special Education and Employment Enhancing vocational Skills especially among Children, women, Elderly and the Differently Abled and livelihood Enhancement projects

- Honorarium to Teachers of 13 Community Education Centres

3.12

- Study Materials, Stationery etc. for Community Education Centres

0.90

- Dress/Uniform, Sweater/Cardigan for Children of Community Education Centres

3.12 -

- Honorarium to Teachers of 7 Stitching Centres

1.68

- Honorarium to Teachers of 2 Stitching & Embroidery Centres

0.88

- Cloth, Stitchining Materials for Students of Stitching Centres for Training

0.70

- Annual Examination of 9 Stitching & Embroidery Centres

0.60

- Honorarium to Staff members of VTI, Ranchi

1.34

- Procurement of Electrical/Electronic items, Consumables etc. for VTI, Ranchi

0.50

- Advertisment for Admission in VTI 1.00

- Honorarium to Staff members of new VTI of UP

0.600 0.600


58


- Rent for the premises of new VTI of UP

3.150 3.150 From July'13 onwards

- Training in Candle Making, Chalk Making etc. to Differently-Abled Inmates of Cheshire Homes

0.600

- Construction of 26-Bed Hostel Building (1st floor) for Blind Boys in Ranchi

25.000 25.000

- Construction of Training-Cum-Dormitory for Blind Girls in Ranchi

24.700 20.995 3.705

Sub-Total 53.450 20.995 46.895

3 Ensuring Environmental Sustainability, Ecological balance, Protection of Flora and Fauna, Conservation of Natural Resources and Maintaining Quality of Soil, Air and water

- Providing Solar Street lights in adopted villages/other villages/Institutions

30.000 MoU project for FY 2014-15

4 Rural development projects

- Construction of Toilet Block in Village School of Adopted Village

42.072 18.596 23.476

- Construction of Toilet Complex (2 nos.) in Adopted Village

118.276 37.248 81.028

- Construction of Toilet Block in Orphanage of Adopted Village

35.374 7.956 27.418

- Construction of Class rooms in Rural areas of UP

15.214 10.112 5.102

- Construction/Upgradation of Village roads of UP

24.640 20.304 4. 336

- Construction of Class rooms for Tribal School in Rural areas of Jharkhand

20.000 16.400 3.600

Sub-Total 255.575 110.616 144.959

5 Other Activities/Miscellaneous Programs

Construction of Community Centre in UP

35.240 6.114 29.126

Exhibition-cum-Craft Mela 4.000

Engagement of Photographer, Messenger etc. as supporting staff

2.640

Sub-Total 35.240 6.114 35.766

TOTAl 357.955 144.125 286.110

59



Annexure - II of Appendix - II

POlICY ON CSR & SUSTAINABIlITY – MARCH, 2014

1. Objective

The objective of CSR & Sustainability policy is to lay down guidelines for proper functioning of CSR & Sustainability activities to attain sustainable development of the nearby society.

2 Background of CSR activities and CSR policy

MECON lIMITED, a Public Sector Undertaking under the Ministry of Steel has been intimately associated with the Country’s Iron and Steel Industry since more than five decades and has played a significant role in its growth and development.

MECON’s concern towards Corporate Social Responsibility (CSR) has been duly reflected in its engagement in rural/community development activities since 60’s. In order to fulfill the objectives of CSR, a dedicated group was formed way back in 1976 with a few handpicked individuals and the group was named as “Community Development Committee (CDC)”.

MECON Board accorded approval in principle, to the scheme prepared by the study group for rural & community development program, vide Item No. 30/391 of 30th Meeting of Board of Directors of MECON held on 03.06.1978 and subsequent amendment in the “Object” clause of Memorandum of Association of the Company.

Subsequently in the year 2010, “CSR Cell” was formed to coordinate the CSR activities of the organisation in association with other employees drawn from various sections as per requirement.

later on, MECON Board accorded approval to the CSR policy (Based on DPE Guidelines,2010), vide Item No. 192/3294 of 192nd Meeting of Board of Directors of MECON held on 22.12.2010.

3. Need for a New policy on CSR & Sustainability

A new guidelines on CSR and Sustainability for Central Public Sector Enterprises (CPSEs) was received from Ministry of Steel (MoS), Govt. of India vide their letter reference no. 4(57)/2012-Coord. Dtd. 21.05.2013 (Department of Public Enterprises, Govt. of India letter reference no. F.No. 15(7)/2012-DPE(GM)-Gl-104 dtd. 12.04.2013) which has introduced certain new provisions.

Moreover, Section 135 & Schedule–VII of the Companies Act, 2013, which is related to CSR activities has also been published in the Gazette of India (Ref. No. 27 dtd. 30.08.2013). It has been notified on 27.02.2014 by Ministry of Corporate Affairs, to be made effective from 01.04.2014.

In view of the above, the existing CSR policy of MECON limited needed a comprehensive revision and accordingly this new policy on CSR & Sustainability, encompassing the provision of DPE guidelines, April,2013 & the Companies Act’2013 (Notification dtd. 27.02.2014) is prepared.

4. CSR & Sustainability considerations while conducting Business

The Company shall carry its normal business in a manner that is beneficial to society & environment also in addition to propagation of business.


60


5. Commitment & Involvement of Management & Employees

The philosophy & spirit of CSR & Sustainability is to be spread across the organization through sensitisation & awareness programme for cross-section of employees. The programme would be arranged by HRD Section through external/internal faculties.

The HRD Section shall maintain records of evidence in the form of documents, reports, photographs etc. in respect of internalising socially responsible and sustainable policies in the organisation.

6. Areas of operation

The Company is in the field of Consultancy services and has no specific geographical area of commercial operation therefore it can take up CSR & Sustainability projects/activities at any location in India considering its business interests. However backward districts identified by Planning Commission for Backward Regions Grant Fund (BRGF) and included in DPE Guidelines,2013 (Annexure-II) shall be preferred area of operation.

Since the Head Office of MECON is situated in Ranchi, Jharkhand state shall get the priority for CSR & Sustainability projects/activities.

7. CSR & Sustainability Projects/Activities

The thrust of CSR & Sustainability shall be in the following areas, with special attention to the development of weaker/marginalized/under privileged sections of the society including SC/ST/OBC/Minorities, women and children, BPl families, old and aged, physically challenged etc.

a) Capacity Building (Infrastructure Development)

i) Infrastructure development (for schools/colleges/ orphanages/old age homes/community centres/hospitals/ health centres/akhras (meeting place for Gram Sabha/ Panchyat)/roads/culverts etc.) in rural areas/backward areas and for institutions of physically challenged boys/girls/persons.

ii) Sanitation and public health/toilets in rural areas/backward areas

iii) Drinking water facilities (wells, tube wells with hand pump/solar pump) in rural areas/backward areas

b) Empowerment of Communities, inclusive of Socio-Economic growth

i) Women empowerment/livelyhood generation centre (Stitching & Embroidery training centers for women)

ii) Skill development/vocational training (For Men & Women)

c) Environment Protection

i) Afforestation/Social Forestry

ii) Rain water harvesting system

d) Promotion of Green and Energy Efficient Technologies

i) Solar lighting system/non-conventional energy sources

ii) Energy conservation measures (Installation of lED lighting system)

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e) Development of Backward Regions as per Planning Commission’s list of BRGF

i) Village/rural based programmes (Promotion of local culture & sports, Training on lac cultivation, honey bee keeping, vermincomposte preparation, sericulture, cultivation, horticulture, floriculture etc.)

ii) Infrastructure development (such as schools/colleges/ hostels/community centres/ health centres/akhras (meeting place)/roads/culverts etc.) in adopted villages/other villages

iii) Sanitation and public health/toilets in adopted villages/other villages

iv) Drinking water/Irrigation facilities (well, tube wells with hand pump, deep borewells with pumping system) in adopted villages/other villages

f) Upliftment of the Marginalised and Underprivileged Sections of the Society

i) Education (Free literacy programme at various centers in slum/backward areas)

ii) Aiding Institutions of Differently Abled/Disabled/ Handicaped persons

g) Community Healthcare

i) General Health camps

ii) Specialised Health camps

iii) Specialised Medical treatment (Indoor treatment)

iv) Health Awareness camps (HIV/AIDS, General Health etc.)

h) Other activities

i) Promotion of Art & Culture

ii) Promotion of local Sports & Games

iii) Awareness Programs (In-house & External).

iv) Projects/activities as per United Nations 8 (Eight) Millennium Development Goals (MDGs) (Annexure-IV of DPE guidelines – April,2013).

With effect from 01.04.2014 the CSR activities shall be as per Schedule–VII (notified on 27.02.2014 by Ministry of Corporate Affairs) as part of the Companies Act, 2013. MECON’s CSR & Sustainability activities as arranged according to Schedule-VII is enclosed as Appendix–A.

MECON shall select one CSR project in any backward district of the country, and one project on environmental sustainability for the purpose of MoU evaluation.

The activities which are clearly mandated to be performed by the Government and/or for which Central/State Government’s schemes have been sanctioned, should be refrained, as it could result in unnecessary duplication.

However, the efforts of the Government in crossing the 'last mile' may be supplemented for achieving the targets/goals, if it is accurately assessed that the resource gap and inadequate capacities are critical constraints in achieving the targets/goals of a particular government scheme/initiative/ welfare project. Here also, duplication in allocation of funds must be strictly avoided.

Moreover, activities which are adhoc and philanthropic in nature shall be avoided, as it shall not be considered a valid CSR activity.

The only exception being contributions made for natural calamities/ disasters.


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8. Selection & Need Assessment of CSR & Sustainability Projects/ Activities

All the requests/applications from Villagers/Gram Sabhas/Panchyat/ Ward Members/NGOs/Trusts/Societies/Beneficiaries etc. shall be scrutinised and screened by CSR Cell and then their need assessment would be arranged.

The need assessment/baseline survey shall be carried out through in-house expertise and recourses.

However, in case of specialized CSR & Sustainability projects/activities for which in-house capacity is not available, the baseline survey/need assessment shall be carried out by specialised agencies.

In any case, the Company shall maintain the documentary evidence of having got the need assessment study done through its own expertise and resources, or through some specialised agencies, or having accessed reliable data in this regard from recognised authoritative secondary sources.

9. Approval of CSR & Sustainability Projects/Activities

All the CSR & Sustainability projects/activities shall be approved by Board level Committee and ratified by Board of Directors. All subsequent purchase/procurement activities related to approved CSR & Sustainability Projects shall be processed as per “Board Approved Procurement and Disposal Procedure” of the company, as applicable.

10. Allocation of funds

a) Till FY 2013-14

MECON shall allocate the CSR fund as per the details indicated below:

Sl. No. PAT in the previous year Range of Budgetary allocation (As % of PAT in previous year)

1. less than ` 100 Crores 3% - 5%

2. ` 100 Crores to ` 500 Crores 2% - 3%

3. ` 500 Crores and above 1% - 2%

The above table shall not be applicable, if the Company is in a loss or having a negative net worth.

b) FY 2014-15 onwards With effect from 01.04.2014, MECON shall spend in each financial year, at least 2.0% of the

average net profits of the company made during the three immediately preceding financial years.

The above shall not be applicable if the Company does not meet the criteria as covered under sub-section (1) of Section 135 of the Companies Act, 2013 for three consecutive financial years.

c) Any unspent/unutilized CSR fund of a particular year, shall be carried forward to the following year, i.e. the CSR budget will be non-lapsable in nature. However, the reason for not being able to spend shall be disclosed and every effort shall be made to spend the unutilised budget of any year within the next two financial years.

d) In case the Company is unable to spend the unutilised CSR fund within the next two financial years, the unspent amount would be transferred to a ‘Sustainability Fund’, which shall be used for CSR & Sustainability activities.

e) At least 80% of the CSR budget shall be earmarked for activities which shall be implemented in project mode.

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f) Upto 5% of CSR budget shall be earmarked for Emergency needs, which shall include relief work undertaken during natural calamities/disasters, and contributions towards Prime Minister’s/ Chief Minister’s Relief Funds and/or to the National Disaster Management Authority.

Further, on exceptional circumstances, emergency needs may be enhanced by another 5% of CSR budget subject to approval of Administrative Ministry. However, this shall not be a regular feature.

In case, the fund allotted for Emergency needs is not utilized, it shall be carried over to the following year for other CSR & Sustainability projects/activities, which if not spent within two years would be transferred to the ‘Sustainability Fund’.

g) The CSR Committee (Board level Committee) shall recommend to the Board, the amount of expenditure, which shall be spent on the CSR & Sustainability activities.

The budgetary allocation shall be approved by the Board of Directors.

11. Institutional arrangement

The Board level Committee for CSR & Sustainability shall be headed by an Independent Director with two whole-time Directors.

The implementation and monitoring of the CSR & Sustainability activities shall be overseen by the Board level Committee.

The day-to-day implementation shall be under the overall supervision of a senior level executive, one rank below the Board level, who shall act as The Nodal Officer.

The Nodal Officer (Chairman, CSR & Sustainability) alongwith the CSR Coordination Cell and a team of officials/employees drawn from different sections covering all levels (called the Executive Committee) shall coordinate & implement the CSR & Sustainability activities.

The above group of officials/employees within the organization who shall execute the CSR activities shall be approved by the Board level Committee.

The Board level Committee and the Nodal Officer’s team of officers/ employees together will constitute the two-tier organisational structure to steer the CSR & Sustainability agenda of the company.

If required, the consultation/help of State Government/District administration may be taken wherever necessary.

12. Planning, implementation & monitoring

In order to fulfill the objectives, the various CSR & Sustainability activities shall be assigned to different groups, each headed by a Convenor along with supporting members. It shall also be ensured to include few local representatives as link-man/co-ordinator in the sub-committee. For, projects in villages, persons/representatives from Villages/Gram Sabhas/ Ward members shall also be engaged. This will help in achieving the target as well as participation of the local representatives in formulating the various activities to obtain maximum benefit by community.

Activities shall, as far as possible, be implemented in a project mode. For easy implementation, long-term CSR & Sustainability projects shall be broken down into medium-term and short-term plans. Each plan shall specify the CSR & Sustainability activities planned to be undertaken for


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each year. Accordingly, the budget shall be allocated for the implementation of these activities and achievement of targets set for each successive year, till the final completion of the project.

Projects especially the construction/civil activities and other projects which require specialised knowledge and skills shall be executed by the external specialised agencies.

Specialised agencies may include Government departments, semigovernment, or non-government organisations (NGOs), autonomous organisations, professional consultancy organisations, registered Trusts/ Missions, community based organisations, self-help groups, not-for-profit organisations, local bodies such as Panchayati Raj institutions, academic institutes, etc. Engagement of external specialised agencies/NGOs shall be normally from the available panels of such agencies maintained by the Government Ministries/Departments, Planning Commission, autonomous organisations, or the National/Regional CSR Hub or as per the Standard purchase procedure/entering into a MoU.

Further, close co-ordination shall also be done with Central/State/local Governments/NGO’s to synergise the activities with their developmental programmes.

All the CSR activities shall be monitored regularly by Chairman, CSR (The Nodal Officer) and In-Charge, CSR Cell. Review discussions shall be held amongst the CSR Cell employees/committee members and suggestions for further improvements shall be discussed in details. Feedback shall be regularly obtained from local area representative/link-man/co-ordinator about benefits of various activities and/or their suggestions. The convener of the committee shall also work in close liaison with them and ensure that benefits of all the activities reaches to the total cross section of the community.

13. Reporting

The Nodal Officer shall regularly submit reports regarding the progress in implementation of CSR activities and utilization of annual budget to the Board level Committee. The Board level Committee will in turn, periodically submit the reports to the Board of Directors for their information, consideration and necessary directions.

The periodicity of submission of reports shall be on quarterly basis.

Additionally, with effect from FY 2014–15 an Annual Report on CSR & Sustainability activities shall be included in the Board’s Report as per Appendix–B as notified on 27.02.2014 by Ministry of Corporate Affairs, as part of the Companies Act,2013.

14. Impact Assessment

Impact Assessment for all the completed projects upto project cost of ` 50.0 lakhs would be carried out by MECON limited, as MECON is a recognized specialised agency for all kinds of techno-economic reports including socio-economic impact studies.

In case where Project cost exceeds ` 50.00 lakhs, the Impact Assessment shall be carried out by involving Appropriate Agency.

15. Mou Evaluation / Performance of the Company

The Company shall submit the self-assessment reports regarding each performance indicators pertaining to CSR and Sustainability for MoU evaluation.

In addition, to the performance indicators, the performance of Company shall be also be evaluated based on the implementation of the following 2 (two) projects,

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i) One CSR project for the development of any one backward district of the country as per Annexure-II (BRGF) of DPE Guidelines,2013.

ii) One project on Environmental Sustainability.

16. Documentation

A separate paragraph/chapter shall be provided in the Annual Report of MECON on the implementation of CSR activities.

Additionally, with effect from FY 2014–15 (as notified on 27.02.2014 by Ministry of Corporate Affairs), MECON’s Policy on CSR & Sustainability alongwith a report on its CSR & Sustainability activities shall be made available in MECON’s website in the format enclosed as Appendix–B.

17. Policy documents to be referred for implementation of CSR & Sustainability projects/activities

a) Policy of MECON ltd. on CSR & Sustainability.

b) Revised Guidelines on CSR for CPSEs (April’2013), issued by Ministry of Heavy Industries & Public Enterprises, Govt. of India vide their letter reference no. F.No. 15(7)/2012-DPE(GM)-Gl-104 dtd. 12.04.2013.

c) Any subsequent Amendment/Revision/addendum to the above guidelines issued by Ministry of Heavy Industries & Public Enterprises, Ministry of Corporate Affairs, Ministry of law & Justice, Govt. of India.

d) Any subsequent guideline/circular/instruction issued by Govt. of India on CSR activities.

18. Contingency

Certain projects/activities which are not approved by Board level Committee but are required to be implemented on an urgent basis in unforeseen circumstances relating to Natural calamity, can be taken up for implementation after approval from committee of two Functional Directors and CMD. The Board level Committee and Board of Directors would be appraised about such projects/activities during their next quarterly meeting.

19. General

a) The CSR & Sustainability Policy shall be recommended by the CSR Committee (Board level Committee) to The Board of Directors for its approval.

b) The Company reserves the right to modify, cancel, add, or amend any of the above rules/guidelines, with the approval of Board level Committee & ratification of Board of Directors.

c) Any or all provisions of the CSR & Sustainability policy shall be subject to revision/amendment in accordance with the guidelines on the subject as may be issued from Government of India, from time to time.

d) In case of doubt with regard to any of the provision of the policy and also in respect of matters not covered herein, the interpretation & decision of the Board level Committee shall be final.


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Appendix - A

CSR & Sustainability Projects/Activities as per Schedule-vII of the Companies Act, 2013 (MCA’s Notification dtd. 27.02.2014)

(Effective from 01.04.2014)

a) Eradicating hunger, poverty and malnutrition, promoting preventive Healthcare and Sanitation and making available safe drinking water

i) General Health camps

ii) Specialised Health camps

iii) Specialised Medical treatment (Indoor treatment)

iv) Health Awareness programs (HIV/AIDS, General Health etc.)

v) Sanitation and public health/toilets in rural areas/backward areas

vi) Drinking water facilities (wells, tube wells with hand pump/solar pump) in rural areas/backward areas

vii) Infrastructure development (for hospitals/health centres) in rural areas/backward areas.

b) Promoting Education, including Special Education and Employment enhancing Vocational skills especially among Children, Women, Elderly and the Differently Abled and livelihood Enhancement projects

i) Education (Free literacy programme at various centers in slum/backward areas)

ii) Women empowerment/livelihood generation centre (Stitching & Embroidery training centers for women)

iii) Skill development/vocational training (For Men & Women)

iv) Aiding Institutions of Differently Abled/Disabled/ Handicaped persons

v) Infrastructure development (for schools/colleges/training centres) in rural areas/backward areas and for institutions of physically challenged boys/girls/persons.

c) Promoting Gender equality, Empowering Women, setting up Homes and Hostels for Women and Orphans; setting up Old Age Homes, Day Care centres and such other facilities for Senior Citizens and measures for reducing inequalities faced by Socially and Economically backward groups

i) Infrastructure development (for women/orphans) in rural areas/backward areas.

ii) Infrastructure development (old age homes/day care centres/facilities for senior citizen & socially and economically backward groups) in rural areas/backward areas.

d) Ensuring Environmental sustainability, Ecological balance, Protection of Flora and Fauna, Animal welfare, Agro Forestry, Conservation of Natural Resources and Maintaining quality of soil, air and water

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i) Afforestation/Social Forestry

ii) Rain water harvesting system

iii) Solar lighting system/lED based lighting system/Renewable energy system

iv) Other Energy conservation measures

e) Protection of National heritage, art and culture including restoration of buildings and sites of Historical importance and works of art; setting up Public libraries; promotion and development of Traditional arts and handicrafts

i) Promotion of Art and Culture

ii) Promotion and development of traditional arts and handicrafts

f) Measures for the benefit of armed forces veterans, war widows and their dependents

g) Training to promote Rural sports, Nationally recognised sports, paralympic sports and Olympic sports

i) Promotion of local/Rural Sports and games

ii) Promotion of Nationally recognized sports

h) Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for Socio-Economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, Other backward classes, Minorities and Women.

i) Contributions or funds provided to Technology incubators located within academic institutions which are approved by the Central Government

j) Rural development projects

i) Village/ rural based programmes (Promotion of local culture & sports, Training on lac cultivation, honey bee keeping, vermin-composte preparation, sericulture, cultivation, horticulture, floriculture etc.)

ii) Infrastructure development (such as schools/ colleges/ hostels/ community centres/ health centres/ akhras (meeting place)/ roads/ culverts etc.) in adopted villages/ other villages

iii) Sanitation and public health/toilets in adopted villages/other villages

iv) Drinking water/ Irrigation facilities (well, tube wells with hand pump, deep borewells with pumping system) in adopted villages/ other villages

k) Other activities

i) Awareness Programs (In-house & External).

ii) Projects/activities as per United Nations 8 (Eight) Millennium Development Goals (MDGs) (Annexure-IV of DPE guidelines – April,2013).


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Appendix - B

FORMAT FOR THE ANNuAl REPORT ON CSR ACTIvITIES TO BE INCluDED IN THE BOARD’S REPORT

1. A brief outline of the company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

2. The composition of the CSR Committee.

3. Average net profit of the company for the last three financial years.

4. Prescribed CSR Expenditure (two percent of the amount as in Item no. 3 above).

5. Details of CSR spent during the financial year.

(a) Total amount to be spent for the financial year;

(b) Amount unspent, if any;

(c) Manner in which the amount spent during the financial year is detailed below.

(1) (2) (3) (4) (5) (6) (7) (8)

Sl. No.

CSR Project or activity identified

Sector in which the project is covered

Projects or programs1. local area or other2. Specify the State and district where projects or programs was undertaken

Amount outlay (Budget) project or programs wise

Amount spent on the projects or programsSub-heads :1. Direct expenditure on projects or programs2. Overheads

Cumulative expenditure upto the reporting period

Amount spent : Direct or through implementing agency *

1.

2.

3.

TOTAl

* Give details of implementing agency

6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report.

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

Sd/–(Chief Executive

Officer or ManagingDirector or Director)

Sd/–(Chairman CSR

Committee)

Sd/–(Person specified under

clause (d) of sub-section (1)of section 380 of the Act)

(wherever applicable)

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Annexure - III of Appendix - II

Manner (Details of the Project) in which the amount spent during the financial year 2014-15

1 2 3 4 5 6 7 8

Sl.No.

CSR Projects or activity identified Sector in which the Project is covered

Projects or Programmes1. local area or Others

2. Specify the state and district (where projects or programmes were undertaken

Amount outlay (Budget)

Project or Programme

wise

Amount spent on the projects or programmesSub-heads : 1. Direct expenditure on projects or programmes

2. Overheads

Cumulative expenditure

upto the reporting

period

Amount spent: Direct or through

implementing agency*

1. Swachh vidyalaya – Swachh Bharat Abhiyan – Construction of New Toilets/ Repair of Dis-functional Toilets in MHRD Schools

Construction/ Repair/ Installation of Toilets (53 nos.) :

Construction of New Toilets(11 nos.)/ Repair of dis-functional toilets (6 nos.)/ Installation of Pre-fabricated Bio Toilets (36 nos.) alongwith its maintenance and construction of borewells in MHRD schools in Jharkhand (under Swachh Vidyalaya Abhiyan)

MHRD - Swachh Vidyalaya Abhiyan – Sanitation Programme

1) Ranchi district – 6 nos.2) Khunti district – 5 nos.3) Deoghar district – 6 nos.4) Hazaribagh district – 12 nos.5) lohardaga district – 24 nos.

82,70,000(To be

approved in FY 2015-16)

1,80,040 1,80,040 Direct

Sub-Total (1) - 1,80,040 1,80,040

2. Rural Development Projects:

i) Construction of 3 nos.Toilet complexes (Total Project cost: ` 1,60,34,715/-)(Carry-over projects of FY 2012-13)

Infrastructure Development Programme - Sanitation Programme

1) Village Residential School (Pranavanand Vidya Mandir), Pancha– (14-seater toilet)2) Village – Pancha (10-seater toilet)3) Village –Parsa Toli, Pancha (10-seater toilet)All the above in Block – Bundu, Dist – Ranchi, State - Jharkhand

1,04,49,730 7,65,200 18,27,745(in FY 12-13) + 37,31,740

(in FY 13-14)+ 7,65,200

(in FY 14-15)= 63,24,685

Direct

ii) Construction of 1 no.Toilet complex (5-seater toilet) for Girls at Orphanage Hostel (Anmol Basera)(Project cost: ` 35,37,405/-)(Carry-over project of FY 2013-14)

Infrastructure Development Programme Sanitation Programme

Village – Sungi, Block – KarraDist – Khunti, State – Jharkhand

27,41,820 9,92,240 7,95,590(in FY 13-14)

+ 9,92,240(in FY 14-15)= 17,87,830

Direct

iii) Construction of 1 no.Toilet Complex (5-seater toilet) for Boys at Orphanage Hostel (Anmol Basera)(Project cost: ` 35,57,005/-)

Infrastructure Development Programme Sanitation Programme

Village – Sungi, Block – KarraDist – Khunti, State - Jharkhand

40,00,000 11,53,045 11,53,045 Direct

iv) Construction of High School for Tribals (Vyakti Vikas Kendra)(Project cost: ` 20,00,000/-)(Carry-over project of FY 2011-12)

InfrastructureDevelopment Programme -Construction of School

Village-Kudri, Block – Karra,Dist.-Khunti, State - Jharkhand

3,00,000 1,00,000 7,90,000(in FY 11-12)

+ 5,50,000(in FY 12-13)

+ 3,60,000(in FY 13-14)

+ 1,00,000(in FY 14-15)= 18,00,000

Direct


70


1 2 3 4 5 6 7 8

Sl.No.






wise


2. Overheads


upto the reporting

period



v) Construction of Classrooms (at Patel Gyan Vidya Peeth & Madarsa Ahle Sunnat)(Project cost : ` 15,21,354/-)(Carry-over projects of FY 2012-13)

Infrastructure Development Programme – Construction of Classrooms

1) Village-Sisour, Dist.-Gonda (1 No.)2) Village-Raigaon, Dewariya Alawal, Dist-Gonda (1 No.)State – U.P.

5,10,175 2,03,840 4,94,075(in FY 12-13)

+ 5,37,625(in FY 13-14)

+ 2,03,840(in FY 14-15)= 12,35,540

Direct

vi) Construction of CC road (500m) (Project cost: ` 24,64,000/-)(Carry-over project of FY 2012-13)

Infrastructure Development Programme – Construction of Road

at Dumariadeeh, Vazirganj,Dist.-Gonda, State - U.P.

4,33,490 1,73,305 6,89,265(in FY12-13)+ 13,55,030

(in FY 13-14)+ 1,73,305

(in FY 14-15)= 22,17,600

Direct

vii) Projects in disaster affected areas of Uttarakhand(3 nos. Ambulance have been provided to Uttarakhand; 1 each in Uttarkashi, Chamoli & Pithoragarh district)

Infrastructure Development Programme – Disaster Relief

Board of Revenue, DehradunState – Uttarakhand

10,00,000 9,13,585 9,13,585 Direct

Sub-Total (2) 1,94,35,215 43,01,215 1,54,32,285

3. Preventive Healthcare and Drinking water projects

i) Construction of 15 nos. additional borewells(Project cost: ` 13,68,315/-)(Carry-over project of FY 2013-14)

Providing drinking water facilities in villages/rural areas

Paras Toli (1 No.), Dibadih (2 Nos.), Amba Toli (1 No.), Tiril Toli (1 No.), Jamgai (1 No.), Pandu Toli (2 Nos.), Cheshire Homes (1 No.), BSP High School (1 No.), Vill – Pancha (1 No.), Vill – Rupru (1 No.) in Ranchi district; & Vill – Rai (3 Nos.), Khunti district of Jharkhand state.

7,28,280 4,88,410 6,40,030(in FY 13-14)

+ 4,88,410(in FY 14-15)= 11,28,440

Direct

ii) Health camps in Mobile Ambulance Van with a team of doctors, paramedical staff etc. alongwith medicine for free health check-up & medicines were given to the poor & needy patients

Community Healthcare

CSR Pavilion, St. Michael’s School for the Blind, Jagannathpur, Ganyor Toli, Pundag, Pandu Toli in Ranchi District; Vill – Rai and Vill – Sungi in Khunti district, Jharkhand

7,20,000 5,33,585 5,33,585 Direct

Sub-Total (3) 14,48,280 10,21,995 16,62,025

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1 2 3 4 5 6 7 8

Sl.No.






wise


2. Overheads


upto the reporting

period



4. Education, Employment Enhancing vocational Skills and livelihood Enhancement projects

i) Free literacy programme for the under privileged children at 13 Community Education Centres

Community Education Scheme

Irgoo Toli (2 nos.), Argora, Jaganathpur, Ravidas Mohalla, Kusai, Pathar Kocha, Pokhar Toli, Ganyor Toli, Bharam Toli; Vill – Oberia, Hatia; Vill. – Rupru, Angara Block of Ranchi District & Vill. – Rai of Khunti district of Jharkhand.

3,12,000 3,28,250 3,12,000(in FY 14-15)

+ 16,250(in FY 13-14)

=3,28,250

Direct

ii) Free Stitching training for under privileged women at 8 stitching Centres

Women Empowerment Scheme (Employment/ livelihood Enhancing Vocational Skills)

Mani Tola, Doranda Urdu library, Hinoo, Argora, Pathar Kocha, Kishorganj, and Jagannathpur in Ranchi District & Vill – Sungi of Khunti district of Jharkhand.

2,88,000 2,18,440 2,18,440 Direct

iii) Vocational Training in the field of Radio & TV technician, Electrical technician, Welding technology, Computer Applications

Vocational Training Scheme (Employment/livelihood Enhancing Vocational Skills)

VTI, Dist – RanchiState - Jharkhand

2,33,800 1,65,600 1,65,600 Direct

iv) Construction of 1st floor of Boys Hostel Building for Blind Boys(Project Cost: ` 21,62,500/-)(Carry-over project of FY 2012-13)

Projects for Differently abled

St. Michael’s School for the Blind,Dist – Ranchi, State - Jharkhand

25,00,000 11,58,770 11,58,770 Direct

v) Construction of Office cum-Training & Dormitory Building for Blind Girls(Project cost: ` 24,70,000/-)(Carry-over project of FY 2012-13)

Projects for Differently abled

Braj Kishore Netraheen Balika Vidyalaya, Bargain, Dist – Ranchi, State - Jharkhand

3,70,500 2,47,000 12,35,000(in FY 12-13)

+ 8,64,500(in FY 13-14)

+ 2,47,000(in FY 14-15) = 23,46,500

Direct

Sub-Total (4) 37,04,300 21,18,060 42,17,560

5. Projects for Old Age Homes, Orphanage etc.

i) Installation of Safe Drinking Water facilities at Old Age Home

Facilities at Old Age Homes

Village-Nagri, District-RanchiState - Jharkhand

47,765 46,905 46,905 Direct

Sub-Total (5) 47,765 46,905 46,905


72


1 2 3 4 5 6 7 8

Sl.No.






wise


2. Overheads


upto the reporting

period



6. Environmental Sustainability

i) Providing 100 nos. lED based Solar Street lights in Adopted villages/ Other Villages (Approved project of FY 2013-14)

Promotion of non-conventional energy

Village – Pancha, Bar Toli, Parsa Toli, Amanburu – Munda Toli, Birhor Toli, Block - Bundu; Vill – Rupru, Block – Angara of Ranchi district; Vill – Rai, Block – Fudi and Vill – Sungi, Block – Karra of Khunti District, State – Jharkhand

30,00,000 16,66,020 16,66,020 Direct

Sub-Total (6) 30,00,000 16,66,020 16,66,020

7. Other activities/ Miscellaneous programs

i) Construction of Multi-purpose Pavilion(Project cost: ` 44,15,990/-)(Approved project of FY 2013-14)

Infrastructure Development Programme – For promotion of products of Beneficiaries/ Adopted villages/ Stitching Training centres; Health camps for poor & underprivileged

Shyamali, Dist – RanchiState - Jharkhand

75,00,000 44,15,990 44,15,990 Direct

ii) Construction of rooms at Chinmaya Mission(Project cost: ` 8,53,280/-)(Approved project of FY 2013-14)

Infrastructure Development Programme

lake Road Dist – Ranchi State – Jharkhand

10,00,000 3,45,200 3,45,200 Direct

iii) Construction of Community Centre(Project cost: ` 35,24,000)(Carry-over project of FY 2013-14)

Infrastructure Development Programme

Akbarpur, Dist.-Kanpur Dehat, State – U.P

29,12,630 --- 6,11,370(in FY 13-14)

Direct

iv) Miscellaneous Expenses including tour & transport

-- -- 6,00,000 3,49,945 3,49,945 Direct

Sub-Total (7) 1,20,12,630 51,11,135 57,22,505

Grand Total 3,96,48,190 1,44,45,370

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Annexure – I

Annexure to Director’s Report for the year 2014-15.

A. Technology Absorption

Sl. No

Efforts made towards technology absorption.

Benefits derived like product improvement, cost reduction, product development.

1.Development of Thermoelectically cooled / heated helmet for industrial applications.

(Patent application filed vide Application No. 1111/KOl/2013)

This is a funded project from SDF, Ministry of Steel, Govt. of India. The objective of this development is to provide comfort to industrial workers by providing head cooling, which in turn increase the productivity and minimize the wastage of time and man-hour. Project is successfully completed. The project completion report is submitted to Ministry of Steel, Govt. of India. The trails of the helmet were taken with different workers at BSP, Bhilai at extreme conditions in inaccessible places during elevated temperatures like at Cast house during the Opening of tap Hole when liquid slag and metals were flowing through runners, at Battery No. 4 while firing of Oven No. 463, at Battery No. 2 (oven top) when standpipe caps were being closed by walking on the oven top. After wearing the helmets, all the users have expressed their satisfaction and appreciated the cooling effect generated. MECON had also submitted an offer for supplying 15 sets of such helmets to BSP, Bhilai for their regular use.

2. Development of Continuous Multi Gas Monitor.

The main objective of this project is to develop indigenous cost effective Multi Gas Monitor for Monitoring CO, CO2, NOx and SO2 gases from the industrial stacks. The developed system has been successfully installed at the Coke Oven Battery No. 10 Stack at Bhilai Steel Plant and is working satisfactorily. The main benefits envisaged are

Compliance of statutory requirement.

Continuous monitoring of flue gas emissions.

Evaluation of environmental performance of coke oven battery w.r.t. gaseous emissions.

Improvement in combustion efficiency by monitoring of Carbon Monoxide Emission in stacks. Optimization of fuel consumption and reduction of gaseous emissions.

Assessment of GHG emission from coke oven battery by monitoring of CO2 in flue gas.

Assessment of emission load. Project completion Report was submitted to Ministry of Steel, Govt. of India. Patent is applied for.


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Sl. No

Efforts made towards technology absorption.

Benefits derived like product improvement, cost reduction, product development.

3. IR Camera based ladle Condition Monitoring System

The objective of this project is to develop a system for monitoring the refractory lining condition of the steel ladle by monitoring the ladle shell temperature with the help of infrared cameras. The system developed will prevent the risk of unexpected ladle breakout that causes loss of materials and man-power. This project was sanctioned by Ministry of Steel, Govt. of India from SDF.

The system has been commissioned in SMS-II of RSP Rourkela after successful trial run. The project completion report was submitted to Ministry of Steel, Govt. of India. Patent is applied for.

4. On line non contact dimension measurement in Steel Industry

The objective of the project is to setup a non-contact gauging experiment using telecentric lens and vision software at MECON laboratory. The system is envisaged to be helpful in steel industry for measurement of dimensions on finished products in every section like Hot Rolling Mills, SMS, Coke Oven and Blast Furnace side which are difficult due to hazardous environment.

The project was of MoU, R&D project for the year 2014-15 and completed successfully with excellent rating.

B. Imported Technology (during the last three years) : Nil

C. Expenditure incurred on R&D : Total expenditure incurred on R&D during the Financial Year 2014-15 amounts to ` 206.60 lakh. Out of total expenditure, MECON’s share of expenditure was ` 166.12 lakh.

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Annexure – II

MANAGEMENT DISCuSSION AND ANAlySIS REPORT

1.0 INTRODuCTION

During its five decades of operation MECON has acquired core competence in providing know-how, engineering & Consultancy services to Iron & Steel sector and has continuously nurtured its engineering skill by way of technical collaborations with industry doyens. Having weathered downturn of Iron & Steel sector from time to time, company is strengthening its operation in other focus areas like Infrastructure, Power and Oil & Gas. Transcendence of operation from its core competence area to areas like Infrastructure, Power and Oil & Gas has been seamless owing to the preparedness built through the past decades. Company is also focussing its operation for delivering projects through EPC & EP mode, in addition to its conventional portfolio of Consultancy Services for providing impetus to its top and bottom lines. The business operation of the company continues to be organised under four SBUs viz. Metals, Oil & Gas, Power and Infrastructure for efficient execution of the Projects.

In view of the opportunities unleashed by National mission to achieve 300 Mtpa steel production by year 2025-26 and plans of rapid infrastructure growth, the company is taking initiatives in exploring opportunities available in different states and the country as a whole. The exposure gained over 50 years in steel sector has provided the company to strengthen various facets of engineering discipline and is expected to generate dividends through the recent endeavours while stepping up the engineering prowess to maintain core competence in Iron & Steel sector.

2.0 SwOT ANAlySIS

Strengths

Core competence in the area of Metals and capability in providing end-to-end solutions, including Integrated Project Management in Greenfield/brown-field projects of various magnitudes.

Consultancy, Design, Detailed Engineering capabilities in our functional business areas.

Capability in equipment & system design and supply & execution in Ferrous area.

Multi-disciplinary highly experienced and capable pool of engineers/technologists in various specialized technical disciplines and Strategic Tie-ups for business competitiveness.

low average age of employees due to induction of young professionals.

Good credentials with financial institutions and regulating authorities.

Capability in environmental impact assessment & environmental management plans.

Wide network of offices at various locations across the country.

weaknesses

High Salaries & Wages and overhead costs as compared to some of the competitors, especially in private sector.

Moderate commercial acumen in technical departments.


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Skewed organizational structure with sparsely manned middle level manpower.

Depletion of critical knowledge/skills on account of large scale superannuation of experienced manpower in the recent past.

Opportunities

Major investments in mining, beneficiation, agglomeration/pelletisation.

Possible future investment in Steel sector (National Mission of 300 MT Crude Steel Capacity by 2025-26).

Investments in other diversified sectors viz. power transmission & distribution, renewable energy, infrastructure and strategic sectors.

Growing business opportunities in Environment Management.

Development in sectors such as Green technologies, nuclear power, water management, slurry & water pipelines, water desalination plants, lNG terminals etc.

Threats

Mushrooming of consultancy companies operating on low margins.

Presence of Indian set-up of all major Multi-national companies like SMS, Siemens, Danielli, Kobe Steel etc providing comprehensive services including Engineering.

Private sector, in particular, opting for engineered packages from the turnkey suppliers, without engagement of external consultants.

Stringent technical pre-qualification criteria for consultancy as well as supply jobs.

Recent decline in investment in the core area of Metals but continued dependence on Metals sector.

Uneven playing ground for public & private sectors.

Today’s consortium partners emerge as future Competitors.

3.0 BuSINESS OuTlOOk

Global economic environment

The global economy got off to a bumpy start this year buffeted by poor weather in the United States, financial market turbulence and the conflict in the Ukraine. As a result, global growth projections for 2014 as a whole have been marked down from 3.2% in January to 2.8% now. Despite the early weakness, growth is expected to pick up speed as the year progresses and world GDP is projected to expand by 3.4% in 2015 and 3.5% in 2016, (according to World Bank Global Economic Prospects). When expressed in 2010 Purchasing Power Parity terms, global growth is projected to accelerate from 3.1% in 2013 to 3.4, 4.0, and 4.2% in each of 2014, 2015 and 2016.

Indian Economy & Steel Sector

A more robust economic performance than was earlier indicated emerges from revised data based on an updated base year, wider coverage of goods & services and the inclusion of tax data to estimate economic activity. Real growth in India was previously estimated as a change in volume, but the new series estimates value added at each stage.

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The government’s initial estimates for Fiscal Year 2014 (ending 31 March 2015) shows that economic growth accelerated to 7.4%. After growing by 4.5% in FY2013, industry accelerated to 5.9% in FY2014, helped by a 6.8% expansion in manufacturing. These estimates may be a bit optimistic, however, as they assume manufacturing growth to have exceeded 10% in the final quarter of FY2014. Monthly industrial production estimates indicate a more modest upturn. Improved coal production helped double the growth of electricity generation over the previous year.

Growth in the gross domestic product is expected to accelerate to 7.8% in FY2015 on improved performance in both industry and services as policy addresses structural bottlenecks and external demand improves.

Growth is expected to edge up further to 8.2% in FY2016, helped by a supportive monetary policy in 2015, as inflation continues to trend lower and by a pickup in capital expenditure. Nevertheless, chronic issues like land availability, raw material security, Environmental issues and higher cost of finances coupled with stubbornly high inflation are expected to continue posing a threat to the domestic growth story.

Coming to steel sectors performance in the country, India is currently the 4th largest producer of crude steel in the world as against its 8th position in 2003 and is expected to become the 2nd largest producer of crude steel very soon in near future. India continues to maintain its lead position as the world's largest producer of Direct Reduced Iron (DRI) or Sponge Iron. The per capita steel consumption has risen from 51 kg in 2009-10 to 60 kg in 2013-14. According to the Joint Plant Committee (JPC), the production of crude steel during April-March’15 was at 88.25 million tones (MT), a growth of 8% compared to April-March’14. The ISP Producers produced 45.44 MT during this period, which was a growth of 2.7% compared to April-March’14. The rest i.e. 42.81 MT was the contribution of the Mini & other producers, which was a growth of 14.3% compared to April-March’14.

The production of Finished steel (Alloy + Non Alloy) stood at 90.69 MT, a growth of 3.4% compared to last year. The contribution of the Producers stood at 46.619 MT while the rest (52.398 MT) was the contribution of the Mini & other producers.

With the progress made for achieving the targets of 300 MT by 2025-30, the growth of steel sector in India is set to witness unprecedented pace.

Government of India’s active policy initiatives such as The Steel & Steel Producers (Quality Control) Orders, 2012, have come into effect from 1st Oct 2014 on steel products having direct bearing on safety and security of human beings and infrastructure. Active engagement of Ministry of Steel with the Ministry of Mines, Coal and Ministry of Environment & Forests has been undertaken for simplification of procedures, formulation of the Indian steel association to articulate the needs and aspirations of the steel sector of the country. Make in India campaign and speedy clearance of important stalled projects have kicked up hope of vibrant industrial activity.

It is important to appreciate that our company’s business prospects are deeply correlated to economic scenario- both global and domestic in general and that of steel sector in particular. Also, the engineering consultancy business is heavily dependent on the pace with which new projects materialize. The fact is also corroborated by stagnant rate of Gross fixed capital formation (as % of GDP) which remains around 32% for last several fiscals.

However, the downfall is expected to have bottomed out and there is hope that new policy measures displaying positive intent on part of the Government of India would revitalize the economic engine.


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BuSINESS PROCuREMENTTotal ` in Crore

Sl. No SBu 2013 - 14 2014 - 15 2015 - 16*

Consultancy EPC Consultancy EPC Consultancy EPC

1. Metal 88.79 134.36 424.06 14.09 160.00 575.00

2. Power 44.71 Nil 35.08 Nil 35.00 80.00

3. Oil & Gas 10.61 Nil 80.89 Nil 80.00 0.00

4. Infrastructure 62.74 Nil 39.28 Nil 20.00 0.00

Total (`) 206.85 134.36 579.31 14.09 295.00 655.00

Grand Total (`) 341.21 593.40 950.00

* Projected/ Estimated

4.0. INTERNAl CONTROl SySTEM AND ADEQuACy THEREOF

MECON limited not only has a proper and adequate system of internal control and proper documented procedure encompassing all financial and operating functions but also a history and tradition bequeathed since inception.

These have been planned to provide reasonable accuracy for maintenance of proper accounting and adequate control to monitor and to govern the company’s fund, to optimize internal resources for increasing operational efficiency, to secure assets from unauthorized use and to ascertain reliance on financial and all other operational information.

The company has undertaken unified untiring team effort to achieve the best possible state-of-the art system.

Salient facets of the internal control system are:

Well defined delegation of power with sanctioning limits for purchasing of capital items and approving of revenue expenditure.

Well framed policies on capital asset procurement.

Well planned budget for capital & revenue expenditure and continuous monitoring.

Well defined Purchase and Disposal Procedure to carry out function of purchase encompassing various Government and CVC guidelines for in-house procurement as well as procurement of services and goods for executing EPC jobs and consultancy jobs.

Well framed MECON Establishment Manual and Service Rules to codify rules and policies governing service conditions of employees.

Well codified Apex Quality Manual for ensuring quality of services provided and goods sold for executing EPC jobs.

Periodical meeting at all functional levels and also at corporate level for reviewing and achieving the targeted results.

With implementation of online information system starting from raising of invoices to collection of money, the entire system has been made more effective in terms of furnishing factual information in shortest possible time.

Well defined plan to invest surplus fund most judicially and reporting thereof to the Apex management regularly.

The company has an extensive programme of carrying out internal audits, management and financial reviews to ensure greater efficiency, transparency and accountability.

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5.0 DISCuSSION ON FINANCIAl PERFORMANCE wITH RESPECT TO OPERATIONAl PERFORMANCEDuring the Financial Year 2014-15, MECON limited achieved Turnover of ` 38,991.60 lakhs. Turnover from Consultancy Jobs was ` 27,468.72 lakhs, mainly due to execution of consultancy order for different Steel Plants of SAIl, NMDC etc. Turnover from Consultancy Jobs constituted 70.45% of the total turnover which is increased by 1.12% over the previous year. Turnover from Turnkey Projects constituted 29.55% of total turnover. Total turnover is increased by 14.25% over the previous year.

Profit before tax for the year 2014-15 is ` 3,300.72 lakhs which is reduced by 51.95% over the previous year. Execution of projects and consultancy jobs with improved efficiency and quality and overall cost control measures contributed to positive performance. Interest and Finance Costs is decreased by ` 160.23 lakhs.

During the year 2014-15 the company has redeemed preference shares (1/5th) ̀ 1,260.00 lakhs as per terms of issue to the Govt. of India. During the Financial Year 2014-15, the company has earned interest of ` 6,433.19 lakhs through short-term deposits with scheduled banks.

The highlights of financial performance of the company for the financial year 2014-15 w.r.t. 2013-14 are mentioned below.

(` in lakhs)

Sl. No. Particulars Fy

2014-15Fy

2013-14

a) Turnover 38,991.60 34,129.06

b) Interest from Bank 6,433.19 7,129.15

c) Employee Benefit Expenses 27,970.94 25,370.14

d) Purchase of Equipments & Direct Expenses 8,639.84 7,451.42

e) Other Expenses 12,703.22 8,180.72

f) Profit Before Tax 3,300.72 6,869.30

g) Profit After Tax 2,027.11 4,948.30

h) Fixed Assets including capital work in progress (Gross Block) 16,437.56 14,504.07

i) Cash and Bank Balances 70,160.68 73,349.33

j) Job-in-Progress 504.48 573.89

k) Trade Receivables (Current & Non Current) 19,924.54 17,494.99

l) Trade Payables (Current & Non Current) 17,138.98 20,154.75

m) loans and Advances(Current & Non Current) 10,617.08 10,580.25

n) Other Assets & investment (Current & Non Current) 11,084.67 13,371.12

o) Other liabilities & Borrowings (Current & Non Current) 60,625.24 59,673.50

p) Net Worth 40,887.44 41,679.92

q) Share Capital 5,273.84 6,533.84

r) Capital Employed 36,621.03 39,591.03


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Due to increase in overall expenses of the company, the fixed deposit/bank balance with scheduled banks has decreased by ` 3,188.65 lakhs over the previous year.

Employee Benefit expenses has increased over the previous year due to provision towards employee benefits as per actuarial valuation.

Investment towards fixed asset has increased due to purchase/capitalization of fixed assets to provide infrastructure and to cushion the existing/upcoming business of the company.

Trade Receivable has increased due to reduction in collection from various clients due to overall economic slowdown.

The Net Worth of the company has reduced by `792.48 lakhs compared to previous year.

6.0 HuMAN RESOuRCE DEvElOPMENT

In a knowledge based company like MECON, Services, Processes and Business Models can be copied, but the organizational competence i.e. the Human Capital is unique in nature.

In the intensified competitive markets, with the focus on quality and competence, it has been a challenging task to have the right alignment of man power to drive effectively towards excellence. So, to unleash People potential through learning and Developmental initiatives, HRD Section conducts regular technical and soft skills training along with knowledge sharing sessions to maintain a cadre of professionals, updated with the latest technological advances in several areas of business.

HRD section has achieved 2192.5 Man days against the MoU target of 1250 Man days for training in 2014-15. This achievement of MoU target is rated under the ‘Excellent’ category.

Key activities undertaken by HRD in the year 2014-15 are mentioned below:

During the course of 2014-15, major Technical In-house Programs conducted for our executives include ‘Tendering & Procurement for Projects in PSUs’ inviting dignitaries from several reputed PSU clients of MECON, ‘Auto CAD-3D’ training to 5 batches of executives, Workshop on ‘Different Modules of Coke Oven Batteries for proposed SAIl Corporate Plan 2025’ inviting executives from several Steel Plants, ‘Energy Management’, Workshop on ‘Technology and Product Selection for Various Sizes of Steel Plants’, ‘Basics of Welding and Inspection’, ‘Contracts Management and related Vigilance aspects’, ‘Private Public Partnership & Infrastructure Finance’ and ‘GIS Software’.

Knowledge Sharing sessions have been conducted through domain experts of several sections on ‘Better interface between Civil/Structural and other Engineering & Technological Sections’, ‘ESP for Process of Waste Gas Cleaning’, ‘Modern Blast Furnace project execution’, ‘Recent trends in Mining & Beneficiation Technology’, ‘Roles & Activities of Metallurgical Wing’, ‘Companies Act 2013’, ‘Competency Mapping system’, ‘Performance Management system’, ‘Role & Activities of Gl & T’, ‘Viability of Industrial Projects- by MAS’, ‘Roads & Topographical survey using satellite imagery, GIS & lIS and their relevance to MECON’, ‘Air Pollution Dispersion Modeling’, ‘Awareness on Gas Cleaning Plant’, ‘Tender & Contracts Management - Vigilance Aspects’, ‘Available Technologies for Coke Oven, Scope - 21’, ‘Sales & Service Tax’ and Experience sharing through young engineers.

Apart from the technical skills, in-house trainings on ‘Internal Quality Auditing as per QMS ISO 9001:2008’, ‘Introduction to ISO QMS 9001:2015’, soft skills trainings on ‘Professionalism

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& Communication’ for 3 batches of executives, ‘Stress Management’, ‘How to be a good manager’ and ‘Assessment & Development Centre for prospective leaders’ has been conducted.

Our executives have been deputed to several reputed institutes for Technical and Skill related trainings in various business domains. Few prominent External trainings undergone by employees in 2014-15 are Gas Pricing: Implication for the Industry, Best Practices for Maintenance of Bulk Material Handling Systems, Steel Mill Rolls, Sustainable Development and Inclusive Growth of Mining Industry, Pipeline Integrity Management, Iron Ore Beneficiation & Pelletization Technologies, Mining Equipment Selection for Opencast & Underground Mines, Coal Market in India, Enhancing Institutional and Community Resilience to Disaster and Climate Change, Structures with steel design refurbishing retrofitting, Emerging Trends in Metals & Mineral Sector, Green Building Congress-2014, GRIHA, Green Rating for Integrated Habitat Assessment, Hybrid Power Generation Systems, Energy Efficiency Advancement Method for Industries: Trend and Innovation, Non-Destructive Evaluation (NDE 2014), Zero liquid Discharge: Technology and Environmental Policy, Indian Steel Industries: Opportunities and Challenges, PlC System, Detection and Mapping of Underground Utilities, Certified Welding Inspector course, Ultrasonic Testing level-II as per IS:13805, Numerical Relay & Protection /Control Systems & Course on Radiographic Testing level-II.

Regarding redeployment and rationalized utilization of Non Executives, in-house Computer Awareness training was conducted for 2 batches, subsequent to which 15 nos. of best performers were imparted in depth certified training on ‘MS Office and Internet usage’ by NIIT, Ranchi.

Special emphasis in 2014-15 was given to the training on “Certificate Course in Project Management and enhancing Commercial Acumen”, conducted subsequent to the activity for identifying Project and Marketing acumen of executives and in accordance to the guidelines in Template for HRM Performance Evaluation under MoU. Out of the total 30 participants, 24 were certified by Q Value Services, Project Management Institute, USA.

Apart from organizing the regular training programs, HRD has also facilitated many Technical Presentations by reputed private companies, Seminars and Expert talks by eminent personalities including the several events under celebration of Public Sector Week, World Environment Day, Vigilance Awareness Week and Productivity Week to enhance awareness and knowledge of the employees.

7.0 TECHNOlOGICAl uP-GRADATION

Technological and Engineering excellence achieved through continuous process of acquiring, absorbing and innovating state-of-the-art technology constitutes the core strength of MECON. Direct transfer of technology through participation in projects in association with industry leaders has remained a consistent source of knowledge up-gradation. license agreements and general collaboration / cooperation agreements with organisations sharing common business interests is providing an impetus for MECON to achieve a win-win situation. Such initiatives are complementing knowledge acquisition in addition to building-up database for focussed business areas with the aim to bridge the identified technology gap. Measures adopted to work towards technology self reliance include :

i) Exposure to global technology and tie-up in potential areas.


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ii) Need based empanelment of experts.

iii) Recruitment of experienced personnel.

iv) In-house engineering Research & Development.

v) Access to modern tools for analysis, design, drafting and inspection.

vi) Training – both in-house and outside.

vii) Cost effective operations achieved through higher reliance on state-of-the-art software tools enhancing productivity, timely completion of projects and with better quality.

8.0 CORPORATE SOCIAl RESPONSIBIlITy (CSR) & SuSTAINABlE DEvElOPMENT

8.1 CSR Programme

MECON has undertaken a number of activities as a part of its Corporate Social Responsibility (CSR). These are broadly classified as follows :

A. Swachh Vidyalaya – Swachh Bharat Abhiyan : Construction of New Toilets/ Repair of Dis-functional Toilets/Installation of Pre-fabricated Bio-Toilets in MHRD Schools

B. Rural Development Projects

C. Preventive Healthcare and Drinking Water Projects

D. Education, Employment enhancing Vocational Skills and livelihood Enhancement Projects

E. Projects for Old Age Homes, Orphanage, etc.

F. Environmental Sustainability

G. Other welfare activities/ Miscellaneous Programs

During Financial Year : 2014-15, the various CSR activities carried out are as follows :

i) a) Construction/Repair of toilets of MHRD schools

Construction of 11 nos. new toilets in 9 schools/colleges of Ranchi, Khunti & Deoghar districts; Repair of 6 nos. dis-functional toilets of 2 schools of Ranchi & Deoghar districts and Installation of 36 nos. Pre-fabricated Bio-toilets in 21 schools of Hazaribagh & lohardaga districts of Jharkhand, under Swachh Vidyalaya – Swachh Bharat Abhiyan of Government of India.

b) Awareness programme & Cleanliness drive

Under Swachh Bharat Abhiyan, 6 nos. Swachh awareness programmes & cleanliness drives were carried-out in MECON Head Office, MECON’s Township School & Adopted villages.

ii) Construction of Toilet Blocks in Village school of Vill.-Pancha & Toilet Complexes [at two toli(s)] in Village – Pancha, Taimara, Block – Bundu, District – Ranchi.

iii) Construction of Separate Toilet Block for Girls and Boys in Orphanage (Anmol Basera) at Village – Sungi, District – Khunti.

iv) Creation of Infrastructure : (Construction of Tribal High School) at Vyakti Vikas Kendra, Village – Kudri, District – Khunti. (Carry-over Project of the Financial Year 2011-12).

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v) Construction of a Class room at Patel Gyan Vidyapith, Village – Sisour, District – Gonda & Madarsa Ahle Sunnat Gulshan Mushahid Raza, Village – Raigaon, Dewaria Alwal, District – Gonda, U.P. (Work completed; Carry-over project of Financial Year 2012-13).

vi) Construction of CC Road (500 m) at Dumariadeeh, Vazirganj, District – Gonda, U.P. (Work completed; Carry-over project of Financial Year 2012-13).

vii) Providing 3 nos. Ambulance for the disaster affected areas of Uttarakhand (1 no. each in Uttar Kashi, Chamoli & Pithoragarh district). (Handed over to Board of Revenue, Dehradun, Uttarakhand).

viii) Construction of 14 nos. borewells for drinking water in backward areas/rural areas/adopted villages.

ix) General Health camps in and around Ranchi & Khunti districts in mobile Ambulance with a team of doctors, paramedical staff, etc. (free health check-up and medicines to the poor and needy people) : Around 1360 patients were covered.

x) Free literacy program for the under privileged poor children at 13 (thirteen) centres in an around Ranchi & Khunti districts.

xi) Providing free Stitching training to women at 7 (seven) nos. Stitching Training Centres in Jharkhand which are running in slum/backward areas.

xii) Providing Vocational Training to the under privileged youths in the field of Electrical technician and Welding technology at VTI, Ranchi.

xiii) Creation of Infrastructure (Construction of Building : 1st floor Boys Hostel Building for Visually challenged boys) at St. Michael’s School for the Blind, Ranchi. (Under final stage of completion; Carry-over project of Financial Year 2011-12).

xiv) Creation of Infrastructure (Construction of Building : Office-cum-Training & Dormitory for Visually challenged Girls) at Braj Kishore Netraheen Balika Vidyalaya, Ranchi. (Work completed, except for some unfinished electrical work; Carry–over project of Financial Year 2011–12).

xv) Installation of Safe drinking water facilities at Old Age Home of Vihar Samaj Kalyan Sansthan, Village – Kulgu, Block – Nagri, District – Ranchi.

xvi) Installation of 100 nos. lED based Solar Street lights in adopted villages/ other villages of Ranchi & Khunti districts of Jharkhand.

xvii) Creation of Infrastructure : Construction of Multi-purpose Pavilion for promotion of products of Beneficiaries/Adopted Villages/ Stitching Training Centres.

xviii) Construction of Infrastructure : Construction of 4 nos. rooms at Chinmaya Mission, Ranchi.

xix) Construction of Community Centre at Akbarpur, District – Kanpur Dehat, U.P. (Carry-over project of Financial Year 2013-14).

8.2 Sustainable Development

i) A project, to save around 6.78kW electric power through use of lED light system in MECON’s Bangalore office, in place of tube lights was successfully completed.

ii) Cross-section of employees at MECON head office were trained on Sustainability.


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Annexure - III

REPORT ON CORPORATE GOvERNANCE

The Directors present the Company’s Report on Corporate Governance as on 31.03.2015.

1.0 COMPANy’S PHIlOSOPHy:

The Company’s Corporate Governance practice is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to values that governs relationship with all its stakeholders and attaining maximum level of enrichment of the enterprise. The said practice of Corporate Governance stem from its professionalism. MECON lays emphasis on the proper conduct of its activities and enhance the value of all those who are associated with the Company viz. Shareholders, Customers, Vendors, Ministry of Steel, Government of India, Department of Public Enterprises, various State Governments, other Government Agencies/Departments and the society at large.

2.0 BOARD OF DIRECTORS:

Your Company being a Central PSU, appointment/nomination of all Directors is done by the President of India, through the Ministry of Steel. The Chairman-cum-Managing Director and Functional Directors are appointed by the Ministry of Steel, Government of India for a period of five years or till the age of superannuation or until further orders whichever is earlier. Part-time Non Official Directors are normally appointed for a tenure of three years. Articles of Association of the Company stipulate that the number of Directors shall not be less than five and not more than thirteen. The composition of the Board is as per DPE Guidelines on Corporate Governance.

Composition of Board of Directors (as on 31.03.2015) :

(i) Functional Directors including CMD (Whole time) : 5

(ii) Part-time Government Directors : 2

(iii) Part-time Non-Official Directors : Nil* _____ Total 07

_____

(*) The tenure of appointment of all the three Part time Non-Official Directors got expired in January, 2014.

2.1 Terms & Conditions of appointment of Board Member :

The terms, conditions and tenure of appointment of Chairman-cum-Managing Director as well as Full-time and Part-time Directors are decided by the Government of India, Ministry of Steel.

2.2 Remuneration / Compensation to Board of Directors :

The Chairman-cum-Managing Director and Whole-time Directors are paid monthly remuneration as fixed by the Government of India. Government Nominee Directors are not paid any remuneration.

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The Part-time Non-Official Directors are paid sitting fees of ` 10,000/- per meeting of the Board/Committee attended by them. The Company bears all the expenditure of the Part-time Government Directors and Part-time Non-Official Directors for attending the above meetings.

Since no Part-time Non official Director was appointed by the Ministry of Steel, Govt. of India during the year FY 2014-15, there was no outgo on account of sitting fees.

2.3 Board Meetings:

The Board meets statutorily and also as many times as may be warranted. The Board Meetings are convened by giving appropriate advance notice after seeking approval of the Chairman of the Board / Committee as the case may be. Detailed agenda note are circulated in advance to the Board Members for facilitating meaningful, informed and focused decision at the meeting. In case of special and exceptional circumstances additional agenda item(s) is/are also permitted with the permission of Chairman.

The Board of Directors oversees all major actions proposed to be taken by the Company. The Board also reviews and approves the strategic and business plans including monitoring corporate performance.

The Board Meetings are held not only at Company’s Registered Office at Ranchi, but also at its Engineering Office at New Delhi. The Company Secretary serves as Secretary to the Board Meetings.

2.4 Number of Board Meetings:

During the year 2014-15, Six (6) Meetings were held, the details of which are given below:

Sl. No. Date of Meeting Board Strength Number of Directors Present

1 16.06.2014 7 7

2 23.07.2014 7 7

3 19.11.2014 7 7

4 27.11.2014 7 7

5 19.02.2015 7 6

6 27.03.2015 7 7


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Particulars of the Directors including their attendance at the Board Meetings from 1st April, 2014 to 31st March, 2015.

Name of Directors PeriodNo. of Board

Meetings held.No. of Board

Meetings attended.

I. whole time Directors

1. Shri A.K.Tyagi

Chairman–cum-Managing Director

01.04.2014 to 31.03.2015

SIX SIX

2. Shri M. N. Sharif,

Director(Technology)

(upto 31.10.2014

01.04.2014 to 31.10.2014

TWO TWO

3. Shri S. Chattopadhyay

Director(Project)

01.04.2014 to 31.03.2015

SIX SIX

4. Shri S.S. Torka

Director(Engineering)

(upto 31.10.2014)

01.04.2014 to 31.10.2014 TWO TWO

5. Shri. Deepak Dutta

Director(Commercial)

01.04.2014 to 31.03.2015

SIX SIX

6 Shri S.R. Sengupta

Director(Technology)

(w.e.f. 01.11.2014)

01.11.2014 to

31.03.2015

FOUR FOUR

7. Shri A.P.Singh

Director (Engineering)

(w.e.f. 01.11.2014)

01.11.2014 to

31.03.2015

FOUR THREE

II. Part-time Government Directors

1. Shri V.K. Thakral, IAS,

AS&FA to the Govt. of India,

Ministry of Steel, New Delhi

(upto 12.03.2015)

01.04.2014 to 12.03.2015

FIVE FIVE

2. Shri Syedain Abbasi, IAS,

Joint Secretary to the Govt. of India, Ministry of Steel, New Delhi.

01.04.2014 to 31.03.2015

SIX SIX

3. Shri Bharathi S. Sihag, IAS,

AS&FA to the Govt. of India,

Ministry of Steel, New Delhi.

(w.e.f. 16.03.2015)

16.03.2015 to 31.03.2015

ONE ONE

87



3.0 BOARD COMMITTEES:

3.1 Audit Committee

Subsequent to completion of tenure of appointment of all the three Part-time Non Official Directors and pending fresh appointments by the Govt. of India, the Audit Committee of the Company was reconstituted, comprising of two Part-time Government Directors and one whole time Director. The Chairman of the Audit Committee is a Part-time Government Director. The Audit Committee as on 31.03.2015 comprises of the following Directors.

Members of the Audit Committee as on 31.03.2015 are:-

1. Smt Bharathi S. Sihag, IAS, Director and AS&FA, - Chairperson Govt. of India, Ministry of Steel, New Delhi.

2. Shri Syedain Abbasi, IAS, Director and - Member Joint Secretary, Govt. of India, Ministry of Steel, New Delhi

3. Shri S. Chattopadhyay, Director (Project) - Member

Role and Powers of the Audit Committee.

The role and powers of the Audit Committee are as per the Guidelines on Corporate Governance for CPSE issued by the Govt. of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises. The Company Secretary acts as the Secretary to the Audit Committee Meeting.

Number of Audit Committee Meetings.

During the year 2014-15, Three (3) Meetings were held, the details of which are given below:

Sl.No Date of Meeting Member’s Strength No. of Members Present

1 22.07.2014 THREE THREE




88


Particulars of the Directors including their attendance at the Audit Committee Meetings from 1st April, 2014 to 31st March, 2015.

Name of Directors Period No. of Audit Committee

Meetings held.

No. of Audit Committee

Meetings attended.

Shri V.K. Thakral, IAS, Director & Chairman,Audit Committee (upto 12.03.2015)

01.04.2014 to 12.03.2015

TWO TWO

Smt Bharathi S. Sihag, IASDirector & Chairperson,Audit Committee.(w.e.f. 23.03.2015)

23.03.2015 to31.03.2015

ONE ONE

Shri Syedain Abbasi, IAS, Director & Member, Audit Committee.

01.04.2014 to 31.03.2015

THREE THREE

Shri S.ChattopadhyayDirector (Project) & Member, Audit Committee.

01.04.2014 to 31.03.2015

THREE THREE

3.2 Remuneration Committee

The Remuneration Committee was earlier constituted with three Part-time Non Official Directors. The Chairman of the Remuneration Committee was Part-time Non-Official (Independent) Director.

With the completion of tenure of appointment of all the Part-time Non Official Directors in January, 2014, the Remuneration Committee is to be reconstituted on appointment of Part-time Non Official (Independent) directors by the Govt. of India.

3.3 Corporate Social Responsibility (CSR) and Sustainability Committee

In compliance of the provisions of Section 135 of the Companies Act, 2013 read with Guidelines on Corporate Social Responsibility and Sustainability for CPSEs issued by the Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises which came into force w.e.f. 01.04.2014, the Board level committee for CSR & Sustainability is already in place. The role and functions of the CSR & Sustainability Committee is as per Companies (Corporate Social Responsibility Policy) Rules 2014.

The present CSR & Sustainability Committee in place as on 31.03.2015 comprises of the following Directors.

1. Shri Syedain Abbasi, IAS, Director and - Chairman Joint Secretary, Govt. of India, Ministry of Steel, New Delhi

2. Shri S.R. Sengupta, Director (Technology) - Member

3. Shri A.P.Singh, Director (Engineering) - Member

The Company Secretary acts as the Secretary to the CSR & Sustainability Committee Meetings.

89



Number of CSR & Sustainability Committee Meetings :

During the year 2014-15, Three (3) Meetings were held, the details of which are given below:

Sl.No Date of Meeting Member’s Strength No. of Members Present




Particulars of the Directors including their attendance at the CSR & Sustainability Committee Meeting.

Name of Directors Period No. of CSR & Sustainability

Committee Meetings held.

No. of CSR & Sustainability

Committee Meetings attended.

Shri Syedain Abbasi, IAS, Director & Chairman, CSR & Sustainability Committee.

01.04.2014 to 31.03.2015

THREE THREE

Shri M.N. Sharif,Director (Technology) & Member, CSR & Sustainability Committee (upto 31.10.2014)

01.04.2014 to 31.10.2014

ONE ONE

Shri. S.S. Torka,Director (Engineering) & Member, CSR & Sustainability Committee (upto 31.10.2.014)

01.04.2014 to 31.10.2014

ONE ONE

Shri. S.R Sengupta,Director (Technology) & Member, CSR & Sustainability Committee (w.e.f. 03.11.2014)

03.11.2014 to 31.03.2015

TWO TWO

Shri. A.P. Singh, Director (Engineering) & Member, CSR & Sustainability Committee. (w.e.f. 03.11.2014)

03.11.2014 to 31.03.2015

TWO TWO

3.4 Part time Non-Official (Independent) Directors Meeting

Since the appointment of all Part-time Non- Official (Independent) Directors are still pending with the Government of India, there was no meeting of Part-time Non- Official (Independent) Directors held during the period under review.


90


4.0 GENERAl BODy MEETING :

The details of the last three Annual General Meeting of the company are as follows:-

year Date Time venue

2011-12 10th July, 2012 11.00 AM Ministry of Steel, Udyog Bhawan,New Delhi - 110107.

2012-13 10th July, 2013 11.30 AM Ministry of Steel, Udyog Bhawan,New Delhi - 110107.

2013-14 10th Oct, 2014 12.30 AM Hotel Ashok, Chanakyapuri, New Delhi - 110107.

5.0 DISClOSuRES:

5.1 Related party transactions

There are no ‘materially significant related party transactions’ that may have a potential conflict with the interest of Company at large.

5.2 Disclosure of accounting treatmentAll applicable Accounting Standards issued by the Institute of Chartered Accountants of India are being followed in the preparation of financial statements.

5.3 Compliance CertificateCompliance Certificate on the financial statements of the Company was placed before the Board.

5.4 Code of ConductThe Board of Directors has laid down the Code of Business Conduct and Ethics for the Board Members and Senior Management of the Company. The copy of the Code is displayed on the website of the Company. All Board Members and key officials of the company have affirmed their compliance with the code.

6.0 MEANS OF COMMuNICATION:Annual Report containing Directors’ Report, Management Discussion and Analysis Report, Corporate Governance Report, Auditor’s Report, Audited Accounts and other important information are made available on the website of the company.

7.0 TRAINING OF BOARD MEMBERS: Directors are being nominated, as and when required for the training programme on Corporate Governance organized by DPE, SCOPE etc.

8.0 wHISTlE BlOwER POlICy: The Company has established Whistle Blower Policy in accordance with the requirement of Section 177(9) of the Companies Act, 2013 and the same is uploaded on the website of the Company.

91



INDEPENDENT AUDITOR’S REPORT

To,The Members ofMECON lIMITEDRanchi

Report on the Financial StatementsWe have audited the accompanying Financial Statements of MECON lIMITED, (“the Company”), which comprises the Balance Sheet as at March 31, 2015 and the Statement of Profit and loss and Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsThe Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act") with respect to the preparation & presentation of these standalone financial statements that give true and fair view of the financial position, financial performance and cash flow of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgment and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The Procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers Internal financial control relevant to the company’s preparation and fair presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion on the financial statements.


92


OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015; and

(b) In the case of Statement of the Profit and loss, of the Profit for the year ended on that date;

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date;

Report on Other legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure A Statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(5) of the Act, the Comptroller and Auditor General of India issued Directions and sub - directions. We give our comments thereon vide Annexure -B.

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper Books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet and the Statement of Profit and loss dealt with by this report are in agreement with the Books of accounts.

(d) In our opinion, the aforesaid financial Statements comply with the Accounting Standards specified under 133 of the Act, read with the Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor’s Report and to the best of our information and according to the explanations given to us:

I. The Company does not have any pending litigations which would materially impact its financial position.

II. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

III. No amounts were required to be transferred to the Investors Education and Protection Fund by the Company.

For. v. k. JINDAl & CO. Chartered Accountants,

Sd/- (R. S. Agarwal) Partner M. No. 076081 ICAI Firm Regn. No. 001468C

Place : RANCHIDated : 27.07.2015

93



ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORTOF MECON lIMITED FOR THE YEAR 2014-15

Referred to in paragraph 1 of our report of even date

i) a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets except in respect of some cases wherein the fixed assets register and records are in the process of updation.

b) The fixed assets of the company have been physically verified by the management at reasonable interval. As informed to us, reconciliation has been carried out and no material discrepancies have been noticed on such verification.

ii) a) The inventories have been physically verified by the management at the end of the year.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory and no material discrepancies between physical stocks and book records arising out of physical verification were noticed.

iii) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act and hence clause (a) & (b) is not applicable to the company for the year under audit.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weakness in the internal controls has been noticed.

v) In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits ; hence, clause (v) is not applicable to the company. Accordingly, directives issued by the Reserve Bank of India and provisions of section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are not applicable.

vi) According to the information given to us, the Central Government has not prescribed maintenance of cost records for the company under section 148 (1) of the Companies Act, 2013.

vii) According to the information and explanations given to us in respect of statutory and other dues;

(a) The company has generally been regular in depositing undisputed statutory dues in respect of Provident Fund, Employees’s State Insurance, Income Tax, Sales Tax/VAT, Wealth Tax, Service Tax, Customs Duty, Excise duty, Cess and other material statutory dues as applicable, with the appropriate authorities. According to the information and explanations given to us, there are no undisputed statutory dues outstanding for a period of more than six months from the date they become payable, as per books of accounts as at 31st March, 2015.


94


(b) According to the information and explanations given to us, there are disputed statutory dues, which have not been deposited as at 31st March, 2015, as given herein below.

Name of the Statute Period to which relates

Forum Amount (in lacs)

Central Sales Tax and Sales Tax/vAT Acts of various States

1999-2000 STAT, Andhra Pradesh. 4.41

2000-2001 STAT, Andhra Pradesh 101.40

2001-2002 Andhra Pradesh High Court 450.88

1995-1996 Commissioner of Commercial Taxes, Ranchi 258.12




2009-2010 JCCT(Appeal), Ranchi 27.66

1993-1994, 1994-1995 & 1996-1997

JCCT(Appeal), Dhanbad 0.67



2010-2012 Joint Commissioner (Appeal), Rourkela 28.61

2003-2004 Joint Commissioner (Appeal), Dhanbad 27.67

2004-2005 Joint Commissioner (Appeal), Dhanbad 44.37

1996-1997 Joint Commissioner of comm. Taxes (Appeal), Jamshedpur

1.92

1997-1998 Sales Tax Tribunal, Ahmedabad, Gujarat 52.99



2000-2001 Jt. Commissioner, Ahmedabad, Gujarat 3.99

2001-2002 Jt. Commissioner, Ahmedabad, Gujarat 7.71

1994-1995 Jharkhand Sales Tax Tribunal 219.10

2003-2004 Addl. Commissioner, Kolkata 16.47

Provident Fundand Misc.Provisions Act,1952

2003-2004 EPF, Appellate Tribunal, New Delhi 229.70

95



(c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investors Education and Protection Fund by the Company.

viii) There are no accumulated losses of the company as at the end of the year. The company has not incurred cash losses during the financial year covered by our audit and also not incurred cash losses in the immediately preceding financial year.

ix) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

x) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institution.

xi) The Company has not taken any term loan during the year and there is no outstanding balance.

xii) As per the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For. v. k. JINDAl & CO. Chartered Accountants,

Sd/-

(R. S. Agarwal) Partner M. No. 076081 ICAI Firm Regn No. 001468C

Place : RANCHIDated : 27.07.2015


96


ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF MECON lIMITED FOR THE YEAR 2014-15

Directions under section 143(5) of Companies Act, 2013 Referred to in paragraph 2 of our report

S. No.

QuESTION REPly

1. If the Company has been selected for disinvestment, a complete status report in terms of valuation of Assets (including intangible assets and land) and liabilities (including Committed & General Reserves) may be examined including the mode and present stage of disinvestment process.

Not Applicable

2. Please report whether there are any cases of waiver/ write off of debts/ loans/ interest etc., if yes, the reasons there for and the amount involved.

No such waiver / write off came to our notice.

3. Whether proper records are maintained for inventories lying with third parties & assets received as gift from Govt or other authorities.

As informed to us no inventory is lying with third parties. The company has not received any gift from government or other authorities during the year.

4. A report on age-wise analysis of pending legal/ arbitration cases including the reasons of pendency and existence/ effectiveness of a monitoring mechanism for expenditure on all legal cases (foreign and local) may be given.

The Company is monitoring the pending legal / arbitration cases and there exist an effective mechanism for expenditure incurred on legal cases.

Age wise detail of pending legal cases is as under.

Matter of Cases

Age wise Detail of Cases (No of cases)

0-5 year >5-10 year >10year

No No No

Sales tax

Income Tax

Others

0

2

7

3

3

2

19

4

7

TOTAl 9 8 30

97



SUB-DIRECTIONS TO INDEPENDENT AUDITOR’S REPORT OF MECON lIMITED FOR THE YEAR 2014-15

S. No. Assets Question Reply

1 land (i) Examine the title/ lease deeds for freehold and leasehold land and report area of freehold and leasehold land for which title deeds are not available, in dispute, and under encroachment.

1. We have examined the title/ lease deed of free hold and lease hold land, which was made available.

2. land at Mahesana is mortgaged to Axis Bank and deed for the same is available with bank.

3. Deed of Conveyance of land at Ranchi, measuring 200.12 acres, valued for ` 61.75 lacs, is pending for execution before Government of Jharkhand.

4. As informed there is no land under dispute.

5. As informed to us, land measuring 3466 square meter at Ranchi is under encroachment by slum dwellers.

(ii) State whether the Company has physically surveyed the land during the year, whether the certificate/report of the survey matches with the area of land held by the Company and effective steps taken by the Company to remove encroachment.

As informed to us, physical survey of land was not conducted during the year.

2 Trade andother receivables

(i) Examine the balances of trade and other receivables and report whether the same were reconciled and un - matched items were adequately explained and adjusted in the accounts. Also report the total amount of unconfirmed balances and those outstanding for more than three years and more than five years.

We have examined the balances of trade and other receivables and found that confirmation letters were send to most of the debtors in case of consultancy jobs, However reply/ confirmation were received only in few cases and the same were reconciled and unmatched entries were explained. In respect of project and supply job debtors joint reconciliation was done in most of the cases. The debtors remaining outstanding for more than three years to five years is ` 2657.50 lacs and more than five years is ` 2666.55 lacs.


98


(ii) Where such balances have been confirmed by respective parties, whether it varies widely from the amounts reflected under respective heads in the financial statements, and if so, difference to be disclosed.

In the cases where confirmation/ reconciliation were made available to us and the difference with accounts is explained and provision has been made wherever required.

3 Examine the revenue recognized in respect of the Jobs-in-progress and report whether same has been recognized based on stage of completion certified jointly with the MECON clients.

Job in progress has been recognised based on stage of completion certified by the MECON Engineers only.

4 Examine all the revenues against escalations and other works recognized in the past and in the year 2014-15, and report whether the same was done as per the contract provisions and certified by the clients.

We have examined the revenue against escalation and other work and report that same was done as per the contract.

99



COMMENTS OF THE COMPTROllER AND AUDITOR GENERAl OF INDIA UNDER SECTION 143(6)(b) OF THE

COMPANIES ACT, 2013 ON THE FINANCIAl STATEMENTS OF MECON lIMITED FOR THE YEAR ENDED 31 MARCH 2015

The preparation of financial statements of MECON limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 27 July 2015.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of MECON limited for the year ended 31 March 2015. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ Report.

For and on the behalf of the Comptroller and Auditor General of India

Sd/- (Sushil kumar Jaiswal)Place: Ranchi Principal Director of Commercial Audit &Date: 28 August 2015 Ex-officio Member, Audit Board, Ranchi.


100


BALANCE SHEET AS AT 31ST MARCH, 2015 (` in lakhs)

PARTICulARS NOTE NO. AS ON 31.03.2015 AS ON 31.03.2014 I. EQuITy AND lIABIlITIES

(1) Shareholders' Funds(a) Share Capital 1 5,273.84 6,533.84 (b) Reserves & Surplus 2 37,992.14 37,413.62 (c) Money received against share warrants - 43,265.98 - 43,947.46

(2) Share Application money pending allotment - -(3) Non-Current liabilities

(a) long-Term Borrowings 3 - -(b) Deferred Tax liabilities (Net) 4 - -(c) Other long-Term liabilities 5 8,871.25 7,979.05 (d) long-Term Provisions 6 25,765.75 34,637.00 24,835.21 32,814.26

(4) Current liabilities(a) Short-Term Borrowings 7 - -(b) Trade Payables 8 13,234.02 16,894.21 (c) Other Current liabilities 9 15,382.58 15,819.68 (d) Short-Term Provisions 10 14,510.62 43,127.22 14,300.10 47,013.99

TOTAl 1,21,030.20 1,23,775.71 II. ASSETS(1) Non-Current Assets

(a) Fixed Assets(i) Tangible Assets 11 8,173.44 7,879.00 (ii) Intangible Assets 12 198.72 20.31 (iii) Capital Work-in-Progress 13 366.59 506.82 (iv) Intangible Assets under development - -

8,738.75 8,406.13(b) Non-Current Investments 14 511.92 511.92 (c) Deferred Tax Asset (Net) 4 3,387.90 1,070.15 (d) long-Term loans and Advances 15 3,426.01 3,600.61 (e) Other Non-Current Assets 16 6,144.33 22,208.91 4,517.76 18,106.57

(2) Current Assets(a) Current Investments - -(b) Inventories 17 142.12 138.25 (c) Jobs-in-Progress 18 504.48 573.89 (d) Trade Receivables 19 14,029.56 13,031.78 (e) Cash and Bank Balances 20 70,160.68 73,349.33 (f) Short-Term loans and Advances 21 7,191.07 6,979.64 (g) Other Current Assets 22 6,793.38 98,821.29 11,596.25 105,669.14

TOTAl 1,21,030.20 1,23,775.71 Note No.1 to 36 form an integral part of Financial StatementsIn terms of our report of even dateFor v. k. JINDAl & CO.CHARTERED ACCOUNTANTS

Sd/-(R.S. AGARwAl)

PARTNER Memb.No.076081

Firm Regn. No.001468C

Sd/-(RAvI BAMBHA)

COMPANY SECRETARY

Sd/-(R. H. JuNEJA)

DEPUTY GENERAl MANAGER I/C (FINANCE)

Sd/-(S. CHATTOPADHyAy)DIRECTOR (PROJECT)

Sd/-(A. k. TyAGI)

CHAIRMAN-cum-MANAGING DIRECTOR

Place : RanchiDated : 27.07.2015

101



STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2015 (` in lakhs)

PARTICulARS NOTE NO. Current

year Previous

year

I. Revenue from Operations 23 43,059.17 37,143.78 II. Other Income 24 10,856.31 11,573.13

III. TOTAl REvENuE (I+II) 53,915.48 48,716.91 Iv. EXPENSES:

(a) Purchases of Equipments & Direct Expenses 25 8,639.84 7,451.42 (b) (Accretion)/Decretion to Jobs-in-Progress 26 21.94 13.68 (c) Employee Benefit Expenses 27 27,970.94 25,370.14 (d) Finance Costs 28 127.48 287.71 (e) Depreciation and Amortisation Expenses 29 1,016.79 507.85 (f) Other Expenses 30 12,703.22 8,180.72

TOTAl EXPENSES 50,480.21 41,811.52 v. Profit/(loss) before prior period, exceptional and

extraordinary items and tax (III-Iv) 3,435.27 6,905.39

vI. Add/(less) Prior Period Items 31 (134.55) (36.09)vII. Profit/(loss) before exceptional and extraordinary 3,300.72 6,869.30

items and tax (v-vI)vIII. Exceptional/Extraordinary Items - -

IX. Profit/(loss) before Tax (vII-vIII) 3,300.72 6,869.30 X. Tax Expense:

(a) Current Tax 3,432.26 2,141.25 (b) Deferred Tax (2,158.65) (397.01)(c) Taxes relating to Earlier Years - 176.76

XI. Profit/(loss) for the period from continuing operations 2,027.11 4,948.30 (IX-X)

XII. Profit/(loss) for the period from discontinuing operations

- -

XIII. Profit/(loss) for the period (XI+XII) 2,027.11 4,948.30 XIv. Earnings per equity share (Face value ` 10/- each)

Profit/(loss) Attributable to Equity ShareholdersAverage Number of Equity SharesEarnings per Share (Basic & Diluted) (`)

1,899.14 4,750.20 4,01,38,360 4,01,38,360

4.73 11.83

Note No.1 to 36 form an integral part of Financial Statements

Sd/-(R.S. AGARwAl)



Sd/-(RAvI BAMBHA)

COMPANY SECRETARY

Sd/-(R. H. JuNEJA)


Sd/-(S. CHATTOPADHyAy)DIRECTOR (PROJECT)

Sd/-(A. k. TyAGI)



In terms of our report of even dateFor v. k. JINDAl & CO.CHARTERED ACCOUNTANTS


102


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 (INDIRECT METHOD)

(` In lakhs)

2014-15 2013-14

Cash Flows from Operating ActivitiesNet Profit/(loss) before Taxation 3,300.72 6,869.30 Add : Adjustments for

Depreciation & Amortisation 1,156.14 549.03 loss on Sale/Disposal of Fixed Assets 2.13 3.52 Provision for Bad and Doubtful Debts 1,236.72 891.35 Other Provisions 5,801.97 2,055.61 Finance Costs 127.48 287.71

8,324.44 3,787.22 less : Adjustments for

Revaluation Reserve written back 24.64 24.63 Profit on Sale/Disposal of Fixed Assets 0.72 0.81 Dividend Received 2.13 2.13

27.49 27.57 Operating Profit/(loss) before Working Capital Changes 11,597.67 10,628.95 Add : Adjustments for

(Increase) / Decrease in Inventories (3.87) 19.27 (Increase) / Decrease in Jobs-in-Progress 21.94 13.68 (Increase) / Decrease in Trade Receivables (3,666.27) (2,514.58)(Increase) / Decrease in loans and Advances (3,839.15) (4,712.30)(Increase) / Decrease in Other Current Assets 67.09 235.24 Increase / (Decrease) in liabilities and Provisions (2,860.64) (2,256.49)

(10,280.90) (9,215.18)Cash Generated from Operations 1,316.77 1,413.77

less : Taxes Paid 3.71 303.58 Net Cash from Operating Activities {A} 1,313.06 1,110.19

Cash Flows from Investing ActivitiesPurchase of Fixed Assets (1,953.64) (1,061.45)Fixed Assets sold/discarded 3.74 4.85 Dividend Received 2.13 2.13 Net Cash from Investing Activities {B} (1,947.77) (1,054.47)

Cash Flows from Financing ActivitiesRedemption of 5% Non-Cumulative Preference Shares

(1,260.00) (1,260.00)

Repayment of long-Term Borrowings - (2,500.00)

Dividend including Dividend Tax Paid (1,166.46) (1,211.00)Finance Costs (127.48) (367.42)Net Cash from Financing Activities {C} (2,553.94) (5,338.42)

103



CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 (INDIRECT METHOD) (Contd.)

(` In lakhs)

2014-15 2013-14

Net Increase/(Decrease) in Cash & Cash Equivalent {A}+{B}+{C}

(3,188.65) (5,282.70)

Cash and Cash Equivalent at the beginning 73,349.33 78,632.03

Cash and Cash Equivalent at the end ($) 70,160.68 73,349.33

Note No.1 to 36 form an integral part of Financial Statements

($) Reconciliation

a) Cash & Cash Equivalents

i) Cash & Stamps on hand 16.76 11.96

ii) Cheques & Drafts on hand - -

iii) Cash at Bank (Current A/c) 2,420.72 2,437.48 56.68 68.64

b) Other Bank Balances

Fixed Deposits with more than 3 months maturity 67,723.20 73,280.69

Cash and Cash Equivalents as restated [Refer Note-20]

70,160.68 73,349.33

Other Disclosures

1. Other Bank Balances include amounts earmarked / available for specified purposes as under :

a) Tax on House Perquisites - 394.69

b) CSR and Sustainable Development Expenditure 623.38 501.24

c) Research & Development Expenditure 125.32 748.70 107.00 1,002.93

2. Other Bank Balances include amounts available for general purpose

59,673.50 65,176.76

3. Other Bank Balances include amounts held as margin money & security under lien against borrowings, etc.

7,301.00 7,101.00

In terms of our report of even dateFor v.k. JINDAl & CO.CHARTERED ACCOUNTANTS

Sd/-(R.S. AGARwAl)



Sd/-(RAvI BAMBHA)

COMPANY SECRETARY

Sd/-(R. H. JuNEJA)


Sd/-(S. CHATTOPADHyAy)

DIRECTOR (PROJECT)

Sd/-(A. k. TyAGI)




104


NOTE 1 : SHARE CAPITAL(` in lakhs)

AS ON 31.03.2015

AS ON 31.03.2014

AuTHORISED

Equity Shares

4,10,00,000 (Previous year 4,10,00,000) Equity Shares of ` 10/- each 4,100.00 4,100.00

Preference Shares

6,30,00,000 (Previous year 6,30,00,000) 5% Non Cumulative Redeemable Preference Shares of ` 10/- each

6,300.00 6,300.00

10,400.00 10,400.00

ISSuED, SuBSCRIBED AND Fully PAID uP

Equity Shares

4,01,38,360 ( Previous year 4,01,38,360 ) Equity Shares of ̀ 10/- each with voting rights.

4,013.84 4,013.84

a) 4,01,38,120 equity shares are held as fully paid-up by the President of India.

b) 120 equity shares are held as fully paid-up by the Govt. Director of the company

c) 120 equity shares are held as fully paid-up by the Chairman-cum-Managing Director of the company.

Out of the total shares,

20,14,800 equity shares are allotted as fully paid-up for consideration other than cash, pursuant to the Government of India, Ministry of Steel & Mines letter No. 6(100)/78-SAIl(1) dated 15th May, 1979 as consideration for net book value of immovable assets of M/s Hindustan Steel limited at Ranchi transferred to the Company.

4,03,060 equity shares are allotted as fully paid-up Bonus Shares during 1996-97

77,20,000 equity shares are allotted as fully paid-up against conversion of Govt. of India loan and Interest on loan vide Government of India, Ministry of Steel Order No.4(46)/2004-HSM dated 30th March,2007

Preference Shares

1,26,00,000 (Previous year 2,52,00,000) 5% Non-Cumulative Redeemable Preference Shares of ` 10/- each with preferential rights. These shares are redeemable in five equal annual instalments commencing from 2011-12.

1,260.00 2,520.00

1,26,00,000 (Previous year 2,52,00,000) preference shares are held as fully paid-up by the President of India vide Government of India, Ministry of Steel sanction letter no.4(46)/2004-HSM(Vol.IV) dated 29.06.2007.

TOTAl 5,273.84 6,533.84

105



RECONCIlIATION OF SHARES

AS ON 31.03.2015 AS ON 31.03.2014

Number Amount (` in lakhs)

Number Amount (` in lakhs)

Equity Shares

Shares Outstanding at the beginning 4,01,38,360 4,013.84 4,01,38,360 4,013.84

Shares Issued during the period - - - -

Shares Bought Back during the period - - - -

Shares Outstanding at the end 4,01,38,360 4,013.84 4,01,38,360 4,013.84

5% Non-Cumulative Redeemable Preference Shares

Shares Outstanding at the beginning 2,52,00,000 2,520.00 3,78,00,000 3,780.00

Shares Issued during the period - - - -

Shares Redeemed during the period 1,26,00,000 1,260.00 1,26,00,000 1,260.00

Shares Outstanding at the end 1,26,00,000 1,260.00 2,52,00,000 2,520.00


106


NOTE 2 : RESERVES & SURPLUS (` in lakhs)

AS ON 31.03.2015 AS ON 31.03.2014

Capital Redemption ReserveAs per last Balance Sheet 3,780.00 2,520.00

Add : Transferred from Surplus 1,260.00 5,040.00 1,260.00 3,780.00 Bond Redemption Reserve

As per last Balance Sheet - 2,500.00 less : Transferred to General Reserve - - 2,500.00 - Revaluation Reserve $

As per last Balance Sheet 2,267.54 2,292.17 less : Transferred to Statement of Profit and loss due to

Depreciation on appreciation of land & Buildings 24.64 2,242.90 24.63 2,267.54

CSR Activity ReserveAs per last Balance Sheet - -

Add : Transferred from Surplus 280.10 - less : Transferred to Surplus 144.46 135.64 - - General Reserve

As per last Balance Sheet 9,680.39 6,780.39 Add : Transferred from Bond Redemption Reserve - 2,500.00 Add : Transferred from Surplus 172.00 9,852.39 400.00 9,680.39 Surplus

As per last Balance Sheet 21,685.69 19,534.69 less : Adjustment of Transitional Depreciation $$ 300.63 - less : Adjustment of Dividend Distribution Tax $$$ 29.16 - Add : Net Profit / (loss) from Statement of Profit and loss 2,027.11 4,948.30 Add : Transferred from CSR Activity Reserve 144.46 -

Amount available for appropriation 23,527.47 24,482.99 less : Transferred to Capital Redemption Reserve 1,260.00 1,260.00 less : Transferred to CSR Activity Reserve 280.10 - less : Proposed Dividend on Preference Shares

including Dividend Distribution Tax 127.97 198.10

less : Proposed Dividend on Equity Shares including Dividend Distribution Tax

966.19 939.20

less : Transferred to General Reserve 172.00 20,721.21 400.00 21,685.69

TOTAl 37,992.14 37,413.62

$ A Revaluation Reserve of `3,879.23 lakhs was created as on 31.03.2000 due to revaluation of certain land & Buildings owned by the company. It was adjusted to the extent of `1,611.69 lakhs upto 31st March, 2014 on account of disposal/depreciation of Revalued Assets.` 24.64 lakhs is adjusted due to depreciation on appreciation of land & Buildings during the year ending 31st March, 2015.$$ As per Schedule II of the Companies Act, 2013 and relevant provisions/rules, ` 300.63 lakhs (net of deferred tax of ` 159.10 lakhs) is adjusted in the opening balance of Surplus on re-computation of depreciation on tangible fixed assets where the remaining useful life of the asset is nil as on 1st April, 2014, as applicable .$$$ ` 29.16 lakhs is adjusted in the opening balance of Surplus on re-computation of Dividend Distribution Tax paid/payable for the FY 2013-14 following an amendment by the Finance Act, 2014 in the relevant provisions of the Income Tax Act, w.e.f. 01.10.2014.

107



NOTE 3 : LONG-TERM BORROWINGS (` in lakhs)

AS ON 31.03.2015 AS ON 31.03.2014

a) Non Convertible Bonds against GovernmentGuarantee for voluntrary Retirement Scheme

Series Interest Rate p.a.

Face value of each

Bond (`)

Particulars of redemption

III 6.80% 10,00,000 5 equal annual instalments commencing from 27.11.2009

- 6,500.00

less : Redeemed - - 6,500.00 -

I 6.90% 10,00,000 5 equal annual instalments commencing from 24.08.2009

- 6,000.00

less : Redeemed - - 6,000.00 -

TOTAl - -

NOTE 4 - DISCLOSURE UNDER ACCOUNTING STANDARD-22 ON "ACCOUNTING FOR TAXES ON INCOME"The details of Deferred Tax liability / (Asset) is as under: (` in lakhs)

Particulars AS ON 31.03.2015 AS ON 31.03.2014

(a) Deferred Tax liability

(i) Difference between book and tax depreciation 669.90 888.74

(ii) Provision for gratuity 147.02 254.26

(iii) Others 151.56 968.48 143.24 1,286.24

(b) Deferred Tax Assets

(i) Provision for bad & doubtful debts, etc. 3,728.74 1,866.29

(ii) Others 627.64 4,356.38 490.10 2,356.39

NET DEFERRED TAX lIABIlITy / (ASSET) (a) - (b) (3,387.90) (1,070.15)

Refer Note 2 for utilisation/adjustment of Deferred Tax of `159.10 lakhs against opening balance of Surplus, on re-computation of depreciation on assets where the remaining useful life of the asset is nil as on 1st April, 2014.


108


NOTE 5 : OTHER LONG-TERM LIABILITIES(` in lakhs)


(a) Trade Payables

(i) Dues to Micro, Small & Medium Enterprises (MSME)

- -

(ii) Others 3,904.96 3,904.96 3,260.54 3,260.54

(b) Other Payables

(i) Advances from Clients 3,941.72 3,056.85

(ii) Sundry Creditors 159.07 163.65

(iii) liquidated Damages Recovered from Parties 347.16 313.57

(iv) Securities and Other Deposits 234.84 169.99

(v) Deposit under Employees Family Benefit Scheme 279.30 228.27

(vi) liability for Employees 4.20 786.18

TOTAl 8,871.25 7,979.05

NOTE 6 : LONG-TERM PROVISIONS(` in lakhs)


(a) Provision for Employee Benefits

(i) Provision for Gratuity (Present Value of Defined Benefit Obligation as per actuarial valuation)

160.43 157.54

(ii) Provision for leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation)

7,522.75 7,033.41

(iii) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation)

4,826.10 4,722.48

(iv) Provision for Employee Defined Contribution Schemes

10,902.06 11,433.25

(b) Other Provisions

(i) Provision for Taxation (Net) - -

(ii) Provision for Miscellaneous Deduction by Clients 2,069.29 1,203.41

(iii) Provision for Disputed Cases 285.12 285.12

TOTAl 25,765.75 24,835.21

109



NOTE 7 : SHORT-TERM BORROWINGS(` in lakhs)


working Capital Borrowings from Bank (Secured against Fixed Deposits with Banks under lien)

- -

TOTAl - -

NOTE 8 : TRADE PAYABLES(` in lakhs)


Trade Payables

(i) Dues to Micro, Small & Medium Enterprises (MSME)

- -

(ii) Others 13,234.02 13,234.02 16,894.21 16,894.21

TOTAl 13,234.02 16,894.21

NOTE 9 : OTHER CURRENT LIABILITIES(` in lakhs)


(a) Current Maturity of long-Term Borrowings - -

(b) Interest accrued but not due on borrowings - -

(c) Interest accrued and due on borrowings - -

(d) Other Payables

(i) Advances from Clients 8,382.84 8,758.23

(ii) Sundry Creditors 1,844.73 1,894.05

(iii) liquidated Damages Recovered from Parties 110.63 94.62

(iv) Securities and other deposits 335.82 308.85

(v) Deposit under Employees Family Benefit Scheme 16.91 -

(vi) liability for Employees 3,483.49 3,705.78

(vii) VAT / Sales Tax Payable 173.93 63.12

(viii) Service Tax Payable 357.29 354.46

(ix) Others (including CSR / SD / R&D Fund) 676.94 640.57

TOTAl 15,382.58 15,819.68


110


NOTE 10 : SHORT-TERM PROVISIONS(` in lakhs)


(a) Provision for Employee Benefits

(i) Provision for Bonus 3.47 3.52

(ii) Provision for Gratuity (Present Value of Defined Benefit Obligation as per actuarial valuation)

16.12 15.14

(iii) Provision for leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation)

1,950.37 1,969.82

(iv) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation)

154.72 139.13

(b) Other Provisions

(i) Proposed Dividend on Preference Shares 106.32 169.32

(ii) Provision for Dividend Distribution Tax 21.65 127.97 28.78 198.10

(iii) Proposed Dividend on Equity Shares 802.77 802.77

(iv) Provision for Dividend Distribution Tax 163.42 966.19 136.43 939.20

(v) Provision for Expenses & Contractual Obligations 10,971.06 10,278.72

(vi) Provision for Miscellaneous Deductions by Clients 317.01 752.76

(vii) Others 3.71 3.71

TOTAl 14,510.62 14,300.10

111



NOTE 11.1 : TANGIBLE FIXED ASSETS (GENERAL) (` in lakhs)

TyPES OF ASSET

COST DEPRECIATION NET CARRyING AMOuNT

As on 01.04.14

Addition/ Adjustment during the

period

Sale/ Ad-justment

during the period

As on 31.03.15

As on 01.04.14

On Sale/

Adjust-ment

Rec-ognised in Retained Earnings

During the

period

upto 31.03.15

As on 31.03.15

As on 31.03.14

1. land 266.79 - - 266.79 - - - - - 266.79 266.79

2. Building - Freehold 3,030.76 76.91 65.06 3,042.61 686.64 (48.38) 34.77 58.64 828.43 2,214.18 2,344.12

- leasehold 120.05 - (65.06) 185.11 99.31 48.38 - 3.31 54.24 130.87 20.74

3. Furniture & Fixtures 804.48 198.16 - 1,002.64 488.39 0.01 0.44 124.19 613.03 389.61 316.09

4. Vehicles 56.84 - - 56.84 12.57 - - 6.72 19.29 37.55 44.27

5. Office Equipments 448.10 150.50 0.03 598.57 243.82 0.02 121.97 48.78 414.55 184.02 204.28

6. Road, Bridges & Culverts 0.55 - - 0.55 0.48 - 0.05 - 0.53 0.02 0.07

7. Water Supply and Sewerage 36.16 - - 36.16 2.46 - 2.21 2.12 6.79 29.37 33.70

8. Electrical Installation 980.38 180.39 12.29 1,148.48 395.00 8.97 5.59 92.05 483.67 664.81 585.38

9. Computer Hardware 1,886.66 308.11 4.36 2,190.41 1,474.18 3.64 76.56 225.27 1,772.37 418.04 412.48

10. Misc. Articles including library

1,004.90 116.82 2.71 1,119.01 730.13 2.27 74.94 31.53 834.33 284.68 274.77

TOTAl 8,635.67 1,030.89 19.39 9,647.17 4,132.98 14.91 316.53 592.61 5,027.23 4,619.94 4,502.69

Figures for Previous Year 8,218.37 556.57 139.27 8,635.67 3,910.70 126.91 - 349.19 4,132.98 4,502.69 4,307.67

NOTE 11.2 : TANGIBLE FIXED ASSETS (SOCIAL AMENITIES) (` in lakhs)

TyPES OF ASSET

COST DEPRECIATION NET CARRyING AMOuNT

As on 01.04.14

Addition/ Adjustment during the

period

Sale/ Ad-justment

during the period

As on 31.03.15

As on 01.04.14

On Sale/

Adjust-ment

Rec-ognised in Retained Earnings

During the

period

upto 31.03.15

As on 31.03.15

As on 31.03.14

1. land 1,247.06 - - 1,247.06 - - - - - 1,247.06 1,247.06

2. Building 2,028.27 295.15 - 2,323.42 813.70 - (0.13) 36.95 850.52 1,472.90 1,214.57

3. Plant & Equipments 8.96 0.31 0.01 9.26 3.38 - 0.70 0.35 4.43 4.83 5.58

4. Furniture & Fixtures 88.32 9.09 - 97.41 48.64 0.02 3.37 6.81 58.80 38.61 39.68

5. Vehicles 1.01 - - 1.01 0.69 - - 0.04 0.73 0.28 0.32

6. Office Equipments 9.81 2.73 - 12.54 4.08 - 4.41 0.45 8.94 3.60 5.73

7. Road, Bridges & Culverts 317.56 0.57 - 318.13 26.58 - 13.44 62.82 102.84 215.29 290.98

8. Water Supply and Sewerage 228.18 41.42 - 269.60 75.32 (0.01) 63.01 9.10 147.44 122.16 152.86

9. Fences 82.20 - - 82.20 23.66 - 54.44 - 78.10 4.10 58.54

10. Electrical Installation 400.75 80.55 0.18 481.12 189.06 0.09 0.71 38.67 228.35 252.77 211.69

11. Computer Hardware 2.33 11.13 - 13.46 1.83 0.02 0.38 0.29 2.48 10.98 0.50

12. Misc. Articles including library

351.22 55.95 0.57 406.60 202.42 (0.01) 2.87 20.38 225.68 180.92 148.80

TOTAl 4,765.67 496.90 0.76 5,261.81 1,389.36 0.11 143.20 175.86 1,708.31 3,553.50 3,376.31


GRAND TOTAl (11.1 & 11.2) 13,401.34 1,527.79 20.15 14,908.98 5,522.34 15.02 459.73 768.47 6,735.54 8,173.44 7,879.00



112


Note : Allocation of Depreciation Current year

PreviousYear

Depreciation 732.75 388.40

Depreciation on appreciation due to revaluation of land & Buildings 24.64 24.63

i) Total Depreciation for the period 757.39 413.03

ii) Depreciation relating to earlier years 11.08 41.18

768.47 454.21

Based on the concept of materiality, assets purchased during the year costing upto ` 1,000/- each are charged to revenue (Refer Note 32 Sl.No.4.2) and included in NOTE 30 - "OTHER EXPENSES" and assets purchased during the year costing above ` 1,000/- each and upto ` 5,000/- each are fully depreciated in the year of acquisition (Refer Note 32 Sl.No.5.2), irrespective of useful life of assets/provisions as specified in Schedule II of the Companies Act, 2013.

NOTE 11.3 : LAND AND BUILDINGSA) lAND

(i) Under Section 7 of Public Sector Iron & Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978, all the lands measuring 118.95 acres for residential colony and 10.25 acres for the administrative building acquired by the Government of India for the erstwhile Hindustan Steel limited (HSl) was transferred in favour of MECON limited by the Gazette Notification dated 30.4.1978. Deed of conveyance in this respect has not yet been executed by the Government of Jharkhand in favour of MECON. Government of Jharkhand has been approached for deed of conveyance in favour of MECON limited and the matter is in progress. Out of the said land, 21.06 acres have been allotted to Steel Authority of India limited (SAIl), Research & Development Centre for Iron & Steel (RDCIS), Ranchi in 1980-81 for which transfer deed is still pending. The amount received / receivable for such transfer has been taken in the accounts.

(ii) Deed of conveyance has not been executed for 103.33 acres of land for township at Ranchi acquired from Govt of Bihar by the Company in 1978-79. Govt. of Jharkhand has been approached for deed of conveyance in favour of MECON limited as the properties are now situated in the state of Jharkhand and the matter is in progress. Pending execution of deed of conveyance in respect of above, transfer deed in favour of Steel Authority of India limited (SAIl), Research & Development Centre for Iron & Steel (RDCIS), Ranchi for 7.43 acres of land and in favour of Steel Authority of India limited (SAIl), Management Training Institute (MTI), Ranchi for 5.42 acres of land could not be executed. The amount received / receivable for such transfer has been taken in the accounts.

(iii) 1.50 acres of land for township at Ranchi was acquired from Government of Bihar for which no deed of conveyance has been executed in favour of the Company. Government of Jharkhand has been approached for deed of conveyance in favour of MECON limited as the properties are now situated in the state of Jharkhand and the matter is in progress.

B) BuIlDINGS

(i) Residential buildings at Rourkela, Gross block ` 5.12 lakhs (Previous year ` 5.12 lakhs) and at Durgapur, Gross block ` 8.62 lakhs (Previous year ` 8.62 lakhs) have been constructed on the land belonging to SAIl for which the depreciation is being charged at the rate applicable for Residential Building.

(ii) Pending determination of the proportionate value of the land in respect of Buildings acquired at Gaziabad, Navi Mumbai and Kolkata the cost of acquisition of flats has been considered as Building and depreciation thereon has been provided at the rate as applicable for Residential Building.

(iii) Building - leasehold has been increased/adjusted by ̀ 65.06 lakhs to depict the correct classification which was disclosed as Building - Freehold earlier. Depreciation is also charged/adjusted accordingly.

113



NOTE 12.1 : INTANGIBLE ASSETS (` in lakhs)

TyPES OF ASSET C O S T AMORTISATION NET CARRyING AMOuNT

As on 01.04.14

Addition/ Ad-justment during

the period

Sale/ Adjust-ment during the period

As on 31.03.15

As on 01.04.14

On Sale/ Adjust-ment

During the

period

upto 31.03.15

As on 31.03.15

As on 31.03.14

1. Computer Software (General)

595.91 566.08 - 1,161.99 575.60 - 387.67 963.27 198.72 20.31

TOTAl 595.91 566.08 - 1,161.99 575.60 - 387.67 963.27 198.72 20.31

Figures for Previous Year 503.89 92.02 - 595.91 480.78 - 94.82 575.60 20.31 23.11

Current year

Previous Year

Note : Allocation of Amortisation

i) Amortisation for the Period 259.40 94.82

ii) Amortisation relating to earlier years 128.27 -

387.67 94.82

NOTE 12.2 : DISCLOSURE UNDER ACCOUNTING STANDARD-26 ON "INTANGIBLE ASSETS"Intangible Assets- Computer Software

I) The amortization rates used - for individual software costing above ` 5.00 lakhs, 20% amortisation each year over a period of five years or proportionate amortisation each year over its licence period which is less than five years, from the year of acquisition and for individual software costing upto ` 5.00 lakhs, 100% amortization in the year of acquisition.

II) The amortization method used – Straight line method

(` in lakhs)

Particulars As on

31.03.15 31.03.14

i) Gross carrying amount (Opening) 595.91 503.89

ii) Gross carrying amount (Closing) 1,161.99 595.91

iii) Accumulated amortization (Opening) 575.60 480.78

iv) Amortization recognized during the period 387.67 94.82

v) Accumulated amortization (Closing) 963.27 575.60


114


NOTE 13 : CAPITAL WORK-IN-PROGRESS(` in lakhs)

Particulars

Opening Balance

as on 01.04.14

Additions/ Adjustments during the

Period

Total

Capitalised/ Adjustments during the

period

Balance

As on 31.03.15

As on 31.03.14

1. Water Reserviour, Boundary Wall, Power Distribution System, Modular Furniture, Fire Fighting System, Air Conditioning System, CCTV, etc at Residential Township and Head Office at Ranchi, Jharkhand

378.63 315.71 694.34 538.05 156.29 378.63

2. Construction of Office Building at NMDC Site, Nagarnar, Chattishgarh

128.19 82.11 210.30 - 210.30 128.19

TOTAl 506.82 397.82 904.64 538.05 366.59 506.82

i) Modular Furniture installed at Administrative Office Building, Ranchi has been capitalised and transferred under "Furniture and Fixtures" in NOTE 11.1 - "TANGIBlE FIXED ASSETS (GENERAl)" ` 194.65 lakhs

ii) Fire-Hydrant System at Administrative Office Building, Ranchi has been capitalised and transfferred under "Office Equipments" in NOTE 11.1 - "TANGIBlE FIXED ASSETS (GENERAl)" ` 100.80 lakhs

iii) Civil Works at Administrative Office Building, Ranchi has been capitalised and transferred under "Buildings" in NOTE 11.1 - "TANGIBlE FIXED ASSETS (GENERAl)" ` 76.91 lakhs

iv) Electrical Works at Administrative Office Building, Ranchi has been capitalised and transferred under "Electrical Installation" in NOTE 11.1 - "TANGIBlE FIXED ASSETS (GENERAl)" ` 41.06 lakhs

v) Air-conditioning System at Administrative Office Building, Ranchi has been capitalised and transferred under "Electrical Installation" in NOTE 11.1 - "TANGIBlE FIXED ASSETS (GENERAl)" ` 90.38 lakhs

vi) Construction of Water Reservoir at residential township, Ranchi has been capitalised and transferred under "Water Supply & Sewerage" in NOTE 11.2 - "TANGIBlE FIXED ASSETS (SOCIAl AMENITIES)" ` 34.25 lakhs

115



NOTE 14 : NON-CURRENT INVESTMENTS(` in lakhs)


(a) Trade Investment - at Cost (unquoted)

Investment in Equity Instruments

i) Joint venture

5000 Equity Shares of Naira 10 each fully paid up being 50% of paid up share capital of M/s Metallurgical & Engineering Consultants (Nigeria) limited, a Company set up in Nigeria jointly by this Company with two Nigerian Government Companies and Nigerian Citizens

7.60 7.60

less: Provision for dimunition in value of investment 7.60 - 7.60 -

ii) Others

50,00,000 Equity Shares of ` 10/- each fully paid up of "Neelachal Ispat Nigam limited".

500.00 500.00

(b) Other Investment - at Cost (unquoted)

Investment in Equity Instruments

i) Others

106,383 Equity Shares of ` 10/- each fully paid-up of "Global Procurement Consultants limited".

11.92 11.92

(Out of the above, 6,383 Equity Shares of ` 10/- each fully paid-up acquired at a premium of ` 20/- per share subsequently.)

TOTAl 511.92 511.92

a) Aggregate amount of Quoted Investments NIl NIl

b) Aggregate amount of Unquoted Investments 519.52 519.52

c) Aggregate provision for dimunition in value of investment 7.60 7.60


116


NOTE 15 : LONG-TERM LOANS AND ADVANCES (` in lakhs)


(a) Capital Advances $ 99.21 35.68

(b) Security Deposits(i) Government Authorities $ 5.05 5.29 (ii) Others

Unsecured, considered good 180.89 212.62 Considered doubtful 91.51 91.51

272.40 304.13 less : Provision for doubtful deposits 91.51 180.89 91.51 212.62

(c) loans and advances to related parties - - (d) Other loans and Advances

(i) Advance to Suppliers and Sub-Contractors Secured, considered good # 762.34 762.34 Considered doubtful 442.00 442.00

1,204.34 1,204.34 less : Provision for doubtful advances 442.00 762.34 442.00 762.34

(ii) Advance to Employees Secured, considered good ## - - Unsecured, considered good 11.82 11.82 11.67 11.67

(iii) Advance to Others $ 104.93 104.93 (iv) Prepaid Expenses $ 4.33 0.22 (v) Claims Recoverable

Unsecured, considered good - - Considered doubtful 52.35 52.35

52.35 52.35 less : Provision for doubtful claims recoverable 52.35 - 52.35 -

(vi) Advances to Board of Trustees, MECON Employees Gratuity Fund $

601.37 920.72

(vii) liquidated Damages Recovered by Clients Unsecured, considered good - - Considered doubtful 134.68 98.44

134.68 98.44 less : Provision for doubtful liquidated damages recovered

134.68 - 98.44 -

(viii) Payment against Income Taxes (Net) $ 1,646.07 1,547.14 (ix) Payment against Sales Tax / VAT $ 10.00 -

TOTAl 3,426.01 3,600.61 $ Unsecured, considered good# Secured against bank guarantee / materials supplied / work done, as the case may be## Secured against buildings and vehicles

117



NOTE 16 : OTHER NON-CURRENT ASSETS (` in lakhs)


(a) long-Term Trade Receivables

Unsecured, considered good 5,894.98 4,463.21

Considered doubtful 3,658.75 3,393.32

9,553.73 7,856.53

less : Provision for bad and doubtful trade receivables 3,658.75 5,894.98 3,393.32 4,463.21

(b) Others

Interest accrued but not due 249.35 54.55

EMD, SD and Advance in Dispute

less : Provision for EMD, SD and Advance

173.62 173.62

173.62 - 173.62 -

TOTAl 6,144.33 4,517.76

NOTE 17 : INVENTORIES (` in lakhs)


(a) Stores and Spares 89.42 85.73

(b) Printing and Stationery 37.65 37.90

(c) Computer Consumables 15.05 142.12 14.62 138.25

Valued as per Accounting Policy (NOTE 32, Sl.No.7)

TOTAl 142.12 138.25

NOTE 18 : JOBS-IN-PROGRESS (` in lakhs)


Jobs-in-Progress for Consultancy Services 551.95 573.89

Valued as per Accounting Policy (NOTE 32, Sl.No.11)

less : Provision for Stagnant Jobs 47.47 504.48 - 573.89

TOTAl 504.48 573.89

The value of Jobs-in-Progress as on 31.03.2015 includes ̀ 211.23 lakhs (Previous Year ̀ 91.69 lakhs) for few non-moving jobs against which substantial payments have been received by the company. Therefore, no provision is made against value of such jobs. However, necessary provision is made against non-moving jobs where payment received is less than the value of Jobs-in-Progress as on 31.03.2015.


118


NOTE 20 : CASH AND BANK BALANCES (` in lakhs)


(a) Cash & Cash Equivalents

i) Cash & Stamps on hand 16.76 11.96

ii) Cheques & Drafts on hand - -

iii) Cash at Bank (Current A/c) 2,420.72 2,437.48 56.68 68.64

(b) Other Bank Balances

Deposits with more than 3 months maturity

67,723.20 70,160.68 73,280.69 73,349.33

Other Bank Balances include amounts earmarked /available for specified purposes as under:

i) Tax on House Perquisite - 394.69

ii) CSR and SD Expenditure 623.38 501.24

iii) Research & Development Expenditure

125.32 107.00

Other Bank Balances include amounts held as margin money & security under lien against borrowings, etc.

7,301.00 7,101.00

Other Bank Balances include Deposits with more than 12 months maturity

9,951.00 2,201.00

TOTAl 70,160.68 73,349.33

NOTE 19 : TRADE RECEIVABLES (` in lakhs)


Trade Receivables outstanding for a period exceeding six months from the date they are due for payment

1,880.23 2,683.28

Others 12,149.33 14,029.56 10,348.50 13,031.78

a) Unsecured, considered good 14,029.56 13,031.78

b) Considered doubtful - -

14,029.56 13,031.78

less : Provision for bad and doubtful trade receivables - 14,029.56 - 13,031.78

TOTAl 14,029.56 13,031.78

119



NOTE 21 : SHORT TERM LOANS AND ADVANCES (` in lakhs)

Particulars AS ON 31.03.2015 AS ON 31.03.2014(a) loans and Advances to related parties -

secured, considered good ## - -

(b) Other loans and Advances(i) Advances to Contractors $ 9.73 6.94 (ii) Advance to Suppliers and Sub-Contractors

Secured, considered good # 810.45 839.27 Unsecured, considered good 15.38 825.83 0.93 840.20

(iii) Advance to EmployeesSecured, considered good ## 0.02 0.27 Unsecured, considered good 333.74 333.76 433.48 433.75

(iv) Advance to Others & Canteen $ 29.82 53.99 (v) Prepaid Expenses $ 21.59 29.63 (vi) Deposit with Others

Unsecured, considered good 274.50 87.49 Considered Doubtful 0.84 0.84

275.34 88.33 less : Provision for Doubtful Deposit with Others 0.84 274.50 0.84 87.49

(vii) Claims RecoverableUnsecured, considered good 247.28 187.99 Considered Doubtful 20.61 -

267.89 187.99 less : Provision for Claims Recoverable 20.61 247.28 - 187.99

(viii) liquidated Damages Recovered by ClientsUnsecured, considered good - - Considered Doubtful 121.00 116.24

121.00 116.24 less : Provision for doubtful liquidated damages recovered 121.00 - 116.24 -

(ix) Payment against Income Taxes (Net) $ 1,765.59 1,627.99 (x) Payment against Sales Tax / VAT $ 1,057.32 914.51 (xi) VAT Credit Receivable (INPUT) $ 140.92 71.08 (xii) OUTPUT VAT Receivable

Unsecured, considered good 28.13 33.88 Considered Doubtful 19.96 19.95

48.09 53.83 less : Provision for Output VAT Receivable 19.96 28.13 19.95 33.88

(xiii) VAT ReceivableUnsecured, considered good 332.80 394.37 Considered Doubtful 188.49 -

521.29 394.37 less : Provision for VAT Receivable 188.49 332.80 - 394.37

(xiv) Service Tax Receivable Unsecured, considered good 2,123.80 2,297.82 Considered Doubtful 279.92 158.29

2,403.72 2,456.11 less : Provision for Service Tax Receivable 279.92 2,123.80 158.29 2,297.82

TOTAl 7,191.07 6,979.64 $ Unsecured, considered good# Secured against bank guarantee / materials supplied / work done, as the case may be## Secured against buildings and vehicles


120


NOTE 22 : OTHER CURRENT ASSETS (` in lakhs)


(a) Interest accrued but not due 1,386.68 1,802.90

(b) Other Receivables 296.65 73.88

(c) Amount accrued but not invoiced (Net) 10,118.10 10,187.03

less : Provision for Stagnant Jobs 5,008.05 5,110.05 467.56 9,719.47

TOTAl 6,793.38 11,596.25

NOTE 23.1 : REVENUE FROM OPERATIONS (` in lakhs)

Particulars 2014-15 2013-14

(a) Revenue from Consultancy Services 27,468.72 27,164.17

(b) Revenue from Construction Contracts 11,522.88 6,964.89

(c) Other Operating Revenue

(i) Provision no longer required written back (Direct) 4,045.80 2,911.62

(ii) Others 21.77 103.10

TOTAl 43,059.17 37,143.78

NOTE 23.2 : GROSS INCOME DERIVED FROM SERVICES RENDERED[Refer Note 23.1(a) and Note 23.1(b)]

(` in lakhs)


(a) Engineering, Technical Consultancy, Project Management Services, etc.

- Domestic

27,164.26 26,394.50

(b) Engineering, Technical Consultancy, Project Management Services, etc.

- Foreign [Refer Note-35.16]

304.46 769.67

(c) Execution of Construction Contracts/EPC Contracts including Supply of Equipment & Components, etc.

11,522.88 6,964.89

TOTAl 38,991.60 34,129.06

121



NOTE 25 : PURCHASE OF EQUIPMENTS & DIRECT EXPENSES(` in lakhs)


(a) Purchase of Equipments & Components for execution of jobs 4,697.96 3,471.00

(b) Expenses on Sub-Contractors & Others for execution of jobs 3,941.88 3,970.10

(c) Provision for Expenses & Contractual Obligations for execution of jobs - 10.32

TOTAl 8,639.84 7,451.42

NOTE 24 : OTHER INCOME (` in lakhs)


(a) Interest Income

(i) Interest from Bank (Tax deducted at Source ` 644.30 lakhs) (CPlY ` 714.58 lakhs)

6,433.19 7,129.15

(ii) Interest on Advances to Employees for Conveyance and House Building

0.38 0.19

(b) Dividend Income from Non-Current Investment 2.13 2.13

(c) Other Non-Operating Income

(i) Profit on Sale / Disposal of Fixed Assets 0.72 0.81

(ii) Income from Township 1,091.00 994.06

(iii) Provision no longer required written back 3,074.48 3,139.49

(iv) Revaluation Reserve written back 24.64 24.63

(iv) Miscellaneous Income 229.77 282.67

TOTAl 10,856.31 11,573.13


122


NOTE 27 : EMPLOYEE BENEFIT EXPENSES

(` in lakhs)


(a) Salaries & wages

- Salary and Allowances 17,002.69 16,882.90

- leave Encashment 2,367.61 -

- Perks and Allowances 3,516.05 3,642.09

- Bonus 3.52 4.10

- Superannuation Benefits 1,805.43 2,012.88

Sub-Total 24,695.30 22,541.97

(b) Company's Contribution to Provident and Other Fund 2,187.01 1,803.54

(c) Staff welfare Expenses

- Education 3.40 3.39

- Medical 581.24 532.95

- Social & Cultural Activities 110.45 90.27

- Rent (Residential) 0.34 0.80

- Premium for Group Term Insurance 39.92 10.32

- Staff Welfare (Others) 353.28 386.90

Sub-Total 1,088.63 1,024.63

TOTAl (a)+(b)+(c) 27,970.94 25,370.14

NOTE 26 : (ACCRETION) / DECRETION TO JOBS-IN-PROGRESS(` in lakhs)


(a) Opening Jobs-in-Progress (Consultancy) 573.89 587.57

(b) Closing Jobs-in-Progress (Consultancy) 551.95 573.89

TOTAl 21.94 13.68

123



NOTE 28 : FINANCE COSTS (` in lakhs)

Particualrs 2014-15 2013-14

(a) Interest Expenses

i) Interest on loan from Banks 78.73 139.72

ii) Interest on Bond loan for Voluntary Retirement Scheme

- 91.49

less : Subsidy from Government of India - - - 91.49

TOTAl (A) 78.73 231.21

(b) Other Borrowing Costs

i) Bank Charges 6.92 17.28

ii) Bank Guarantee Commission 41.83 39.22

iii) Guarantee Fee to Government of India for Voluntary Retirement Scheme loan

- -

less : Waiver of Guarantee Fee by Government of India - - - -

TOTAl (B) 48.75 56.50

TOTAl (A) + (B) 127.48 287.71

NOTE 29 : DEPRECIATION AND AMORTISATION EXPENSES (` in lakhs)


a) Depreciation 757.39 413.03

b) Amortisation 259.40 94.82

TOTAl (a) + (b) 1,016.79 507.85


124


NOTE 30 : OTHER EXPENSES (` in lakhs)

Sl.No Particulars 2014-15 2013-14 1. Expenses on Foreign Experts - 0.50 2. Travelling Expenses 1,640.01 1,476.13 3. Foreign Deputation 229.42 177.10 4. Maintenance & Repairs to Buildings 1,138.74 1,040.96 5. Repairs (Others) 60.68 66.87 6. Stores & Spares consumed 104.73 139.57 7. Printing & Stationery consumed 106.27 116.09 8. Expenses on Computer Consumables 74.38 54.09 9. Rent (Non-residential) 177.76 139.02

10. Rates & Taxes 50.47 72.96 11. Advertisement & Publicity 155.75 224.57 12. Payment to Auditors :

- As Statutory Auditor 3.00 2.50 - For Tax Audit Matters 0.48 0.40 - For Quarterly Audit 1.50 1.50 - For reimbursement of expenses 3.60 8.58 3.60 8.00

13. Insurance 7.06 7.41 14. Training Expenses :

- Inland 67.15 39.94 - Foreign - 67.15 - 39.94

15. Postage,Telephones & Telegraphs 136.76 128.33 16. Computer Services 106.57 85.26 17. Power and Fuel 478.82 467.50 18. legal & Professional Charges 107.25 33.33 19. Assets Charged to Revenue 2.23 0.73 20. Other Administrative and Misc. Expenses 838.75 671.15 21. Fees Withdrawn 9.54 28.18 22. Expenses on CSR and Sustainable Development 136.74 202.04 23. Expenses on Research & Development 24.74 50.51 24. loss on Sale / Disposal of Fixed Assets 2.13 3.52 25. Provisions

- Provision for Claims Recoverable 20.61 - - Provision for Bad & Doubtful Debts 1,236.72 891.35 - Provision for lD Recovered by Clients 41.32 11.66 - Provision for Doubtful Deposit with Others - 18.34 - Provision for Doubtful Advances to Suppliers - 260.06 - Provision for Earnest Money Deposit - 1.04 - Provision for Service Tax Receivable 123.35 158.29 - Provision for Stagnant Jobs 4,540.98 467.56 - Provision for Stagnant Jobs-in-Progress 47.47 - - Provision for VAT Receivable 188.49 19.96 - Provision for Misc. Deduction by Clients 839.75 935.99 - Provision for Disputed Cases - 182.71

TOTAl 12,703.22 8,180.72

NOTE 31 : PRIOR PERIOD ITEMS(` in lakhs)

Sl. No. Particulars 2014-15 2013-14

1. Employee Benefit Expenses (4.80) -2. Depreciation Expenses 11.08 41.183. Amortisation Expenses 128.27 -4. Other Expenses - (5.09)

NET DEBIT / (CREDIT) 134.55 36.09

125



NOTE 32 : SIGNIFICANT ACCOUNTING POLICY

1. BASIS OF PREPARATION OF FINANCIAl STATEMENTS

1.1 The financial statements are prepared under the historical cost concept on accrual basis of accounting in accordance with generally accepted accounting principles in India, accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as applicable and the relevant provisions of the Companies Act, 1956 / 2013, as applicable.

2. uSE OF ESTIMATES

2.1 In preparing the financial statements in conformity with accounting principles generally accepted in India, the company makes best estimates and assumptions that may affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as at the reporting date and the amount of revenue and expenses during the reporting period. Actual result in some cases may differ from those estimates. Any revision of such estimates is recognised during the period in which the same is determined.

3. CuRRENT / NON-CuRRENT ASSETS & lIABIlITIES

3.1 All items of assets and liabilities in the Balance Sheet are classified as Current and Non-current as per requirement of the Companies Act, 2013, as applicable.

3.2 Normal operating cycle of the company is considered 12 months keeping in view past experience and nature of business of the company.

3.3 Trade Receivables (i.e. dues arising only from clients in the normal course of business) outstanding for a period exceeding six months is determined after taking into account 30 days normal credit period allowed by the company.

3.4 Dues on account of goods purchased or services received in the normal course of business are treated as Trade Payables.

4. FIXED ASSETS

4.1 Fixed assets including lease-holds are stated at cost including expenses incidental to acquisition and installation and includes amount added on revaluation of certain land and buildings less accumulated depreciation.

4.2 Assets purchased during the year costing upto ` 1,000/- each are charged to revenue.

4.3 The cost of any software purchased along with the computer hardware, being an integral part of the hardware, is capitalized along with the cost of the hardware. However, expenditure incurred on acquisition of software (including ERP), which is not an integral part of related hardware, is treated as intangible assets.

4.4 Assets retired from active use are shown separately under fixed assets at lower of net book value and net realisable value.


126


5. DEPRECIATION & AMORTISATION

A. Tangible Assets

5.1 Depreciation on Tangible Fixed Assets is provided for under “Straight line Method”. After considering residual value of 5% of the original cost of the Tangible Fixed Asset, the depreciable amount is depreciated over the useful life of the Tangible Fixed Asset and in the manner prescribed in Schedule II of the Companies Act, 2013 and relevant rules as applicable.

5.2 Tangible Fixed Assets costing above ` 1,000/- each and up to ` 5,000/- each are fully depreciated in the year of acquisition.

5.3 On revalued assets, depreciation is charged over the useful life of the assets commencing from the year of revaluation.

5.4 leasehold assets (Finance lease) are depreciated as per Schedule II of the Companies Act, 2013. However, if there is no reasonable certainty that the company (lessee) will obtain the ownership by the end of the lease term, the asset is fully depreciated over the lease term or its useful life, whichever is shorter.

5.5 Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately for computation of depreciation.

B. Intangible Assets

5.6 Expenditure incurred on acquisition of technical know-how and engineering materials is treated as intangible assets and is amortised over a period of five years.

5.7 Expenditure incurred on acquisition of software is amortised over a period of five years from the year of acquisition or its license period, whichever is less. However, software individually costing upto ` 5,00,000/- is fully amortised in the year of acquisition.

6. INvESTMENTS

6.1 Investments are classified as current and non-current as per requirement of Companies Act, 2013, as applicable. Non-current investments are classified as trade investment and other investment as per requirement of Companies Act, 2013, as applicable.

6.2 long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, in the value of long term investment, the carrying amount is reduced to recognise the decline on individual investment basis.

6.3 Current investments are carried at lower of cost and fair value on individual investment basis.

7. INvENTORIES

7.1 Closing stock of stores & spares, printing & stationery items and other consumables are valued at lower of cost, on First in First Out (FIFO) basis, and net realisable value. Consumption of the above items during the reporting period is arrived at by deducting the value of physical stock in hand as on the reporting date from the aggregate value of opening stock and purchases during the reporting period.

127



8. ENGINEERING RESEARCH & DEvElOPMENT

8.1 Expenditure incurred on Engineering Research and Development activities are charged to revenue in the relevant years.

9. FOREIGN CuRRENCy TRANSlATION

9.1 All Current Assets and Current liabilities are translated at the relevant rates of exchange prevailing at the year end and the translation differences are recognised in the profit and loss account.

10. INCOME RECOGNITION

10.1 Engineering & Consultancy Services

10.1.1 Income from Engineering & Consultancy services rendered to the clients against contracts or letters of Intent or Work orders or exchange of letters which stipulate lump sum fee is recognised on the basis of technical estimate of percentage of progress achieved at the end of the financial year considering the pre-determined threshold limit on the basis of value of respective jobs. The actual progress is taken after deducting 10% in such cases and this 10% is taken into account in the year in which 100% progress is achieved.

10.1.2 Income from services rendered other than lump sum fee basis (including reimbursable jobs) is recognised at 100% value of the invoices raised for the services rendered during the financial year. Where the invoice is settled/admitted by the client during the year, income is recognised upto the amount settled/admitted.

10.2 Execution of Projects

10.2.1 Income from execution of projects (including sale of spares) for the clients against contracts or letters of Intent or work orders or exchange of letters which stipulate fixed price is recognised on the basis of percentage of progress achieved during the financial year.

10.2.2 Income on account of escalation, additional or extra claims and other miscellaneous items like project insurance claims is recognised at 100% value as and when they are admitted. Where escalation in price is provided in the contract with specific guidelines the same is recognised as accrued during the financial year as per the provisions of the contract.

10.3 Others

10.3.1 Dividend income from Investments is recognised as and when the right to receive the payment is established.

11. JOB-IN-PROGRESS

11.1 For lump sum fee Engineering & Consultancy jobs, where the progress achieved in respect of a job is below the pre-determined threshold limit, lower of cost or value of the work done, computed on the basis of technical estimate of the percentage of progress achieved, is carried forward under Job-in-Progress.

11.2. Where the work is started on the basis of job allotted by lOI / any other communication from the client, but the fee is yet to be settled, the cost incurred against such jobs is carried forward under Job-in-Progress. However, in cases where minimum undisputed terms are agreed to by the client, income is accounted for on the basis of such undisputed terms.


128


12. EMPlOyEE BENEFITS

12.1 All short term employee benefits are recognised at their undiscounted amount in the reporting period in which they are incurred.

12.2 Employee benefits under defined contribution plans comprising Pension Scheme, Post-Retirement Medical Benefit Scheme are recognised and charged to revenue on the basis of actual liability.

12.3 Employee benefits under defined benefit plans comprising PF, Gratuity, leave Encashment etc. are recognised based on the actuarial valuation as at the end of the reporting period and charged to revenue with actuarial gains/losses as per AS-15 (Revised).

12.4 Expenditure on termination benefits (Voluntary Retirement Compensation) is charged to revenue in the period in which it is incurred.

13. PRIOR PERIOD

13.1 Any expenditure or income of ` 10,000/- and above in each case, which arise in the current period as a result of errors or omissions in the preparation of financial statements of one or more prior periods, are treated as prior period items. However, depreciation relating to earlier years is treated as a prior period item irrespective of the amount of depreciation.

14. PROvISION FOR CONTRACTuAl OBlIGATIONS/lD, ETC.

14.1 Provisions for estimated liabilities on account of guarantees & warranties etc. in respect of Engineering & Consultancy Services and Turnkey Contracts are made by the company after assessment of risk and consequential probable liabilities on case to case basis.

14.2 Provisions for liquidated damages are made as and when these are deducted and/or considered deductible by the client as per contract.

14.3 Suppliers’/contractors’ claims for price escalation, additional or extra claims, etc. are accounted for to the extent such claims are accepted by the company.

15. IMPAIRMENT OF ASSETS

15.1 The company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognised is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of assets. If it is found that some of the impairment losses already recognised need to be reversed, the same are recognised in the Statement of Profit & loss in the year of reversal.

16. TAXES ON INCOME

16.1 Current tax is determined as the amount of tax payable in respect of taxable income for the reporting period. Deferred tax is recognised on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

129



NOTE 33 : CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

(` in lakhs)


33.1 Contingent liabilitiesi) Claims against Company under liquidated damage clause by the Clients. NIl NIl

ii) Income tax in dispute / under appeal 1,920.55 1,682.65

iii) Sales tax demands pending appeals with Appellate Authorities. 1,437.74 1,337.08

iv) Claims against Company by Contractors/Suppliers, etc pending final decision. 5,979.17 7,277.76

v) Claims against Company for electricity supply by Jharkhand State Electricity Board (JSEB).

148.65 148.65

vi) Claims against company on account of enhancement in lease Rent for MECON, Kolkata office w.e.f. 01.04.2014 `155.66 lakhs. Provision of `37.26 lakhs is made based on Company’s calculation pending final decision.

118.40 NIl

vii) The Regional Provident Fund Commissioner-II, Jharkhand, Ranchi ordered for payment of `385.27 lakhs by way of interest and penalty to the BOT, arising out of delayed remittances by the company to the BOT, MECON Employees PF Trust. The company disputed the same and filed an appeal with EPF, Appellate Tribunal, New Delhi after depositing `96.32 lakhs as interim adhoc advance.

The Hon’ble High Court of Jharkhand, vide order dated 30th July, 2012 has directed Provident Fund Commissioner, Ranchi to decide the question of delay in payment and determine the quantum of damages with a view to re-assess the liability of the Company, setting aside all earlier orders.

RPFC has worked out liability of `326.02 lakhs vide their letter dated 28.08.2013. Provision of `3.11 lakhs has been made during 2013-14 based on Company’s calculation pending final decision. The Regional Provident Fund Commissioner-I, Jharkhand, Ranchi vide their letter dated 17.03.2015, demanded `116.86 lakhs towards interest and penalty, arising out of delayed remittances of PF and Pension amounts for the period from April, 1971 to February, 2001.

322.91 322.91

33.2 CommitmentsEstimated amount of contracts/orders remaining to be executed/supplied on capital account and not provided for

43.92 212.85

NOTE 34 : PROPOSED DIVIDEND (` in lakhs)


Proposed dividend on preference shares Total dividend (` in lakhs) ** Dividend per share (`)

Proposed dividend on equity shares Total dividend (` in lakhs) Dividend per share (`)

106.320.50

802.772.00

169.320.50

802.772.00

** Dividend @ 5% on `1,260 lakhs upto 31st March, 2015 and @5% on `1,260.00 lakhs upto the date of redemption is considered for 2014-15 (Previous Year @ 5% on ` 2,520 lakhs upto 31st March, 2014 and @5% on `1,260.00 lakhs upto the date of redemption).


130


NOTE 35 : ADDITIONAL INFORMATION AND OTHER DISCLOSURES(` in lakhs)


35.1 letters of Credit opened with Bankers for purchase of equipment & components and technical services.

518.54 518.54

35.2 Guarantees given by Banks for and on behalf of the Company to different clients etc.

14,815.90 12,427.80

35.3 Earnings in Foreign Exchange (Refer Note 36.16)

Fees for services rendered.

304.46 769.67

35.4 Expenditure in Foreign Currency

(i) Professional and Consultation Fees

(ii) Other matters

15.34

184.57 199.91

41.60

120.40 162.00

35.5 Value of Imports (Calculated on CIF basis)

(i) Equipment, components & spares parts used in construction contract

(ii) Capital goods

172.36

NIl 172.36

NIl

NIl NIl

35.6 (i) Expenses on Advertisement & Publicity

a) Advertisement

b) Publicity

12.04

26.94 38.98

14.36

10.69 25.05

(ii) Expenses on Public Relation Establishment 58.91 61.95

35.7 Expenses on Engineering, Research & Development Wing / establishment, including capital assets

a) Salary & Wages, etc.

b) Expenses out of R&D Fund107.33

6.42 113.7598.20

9.61 107.81

35.8 Particulars of remuneration of whole time Directors including Managing Director :

(i) Salaries & Allowances

(ii) Company’s Contribution to Provident Fund and

123.85

21.15 145.00

119.22

19.25 138.47

Other Benefits

(iii) Employee Benefits (P.V. of DBO as per actuarial valuation)

Remuneration excludes medical facilities provided at Company's hospital, monetary value of which is not ascertainable.

110.81 108.95

131



35.9 : PARTICULARS OF PROVISIONS(` in lakhs)

PARTICulARSProvision for Bonus

Provision for Bad & Doubtful

Debts

Provision for

liquidated Damages recovered by Clients

Provision for

Claims Recover-

able

Provision for

Doubtful Earnest Money Deposit

Provision for Doubtful

Deposit with Others

Provision for doubtful

advances to suppliers/

sub-contractors

Provision for Miscell-aneous

Deductions by Clients

Provision for Disputed Cas-es, Stagnant jobs, EMD,

SD advances, output vAT

receivable, etc

Opening Balance as on 01.04.2014

3.52(1.52)

3,393.32(3,361.89)

214.67(209.01)

52.35(52.35)

6.85(5.82)

85.50(67.16)

442.00 (181.94)

1,956.17(1,407.90)

1,104.55(276.03)

Add: Provision made during the period

3.47(3.52)

1,236.72 (891.35)

41.32 (11.66)

20.61 (NIl)

NIl (1.03)

NIl (18.34)

NIl (260.06)

839.75 (935.99)

4,900.29(828.52)

less: Provision utilised during the period

3.52(1.52)

20.50(64.64)

0.31 (6.00)

NIl (NIl)

NIl (NIl)

NIl (NIl)

NIl(NIl)

NIl (NIl)

NIl(NIl)

less: Unused provision reversed during the period

NIl(NIl)

950.79(795.27)

NIl(NIl)

NIl(NIl)

NIl (NIl)

NIl (NIl)

NIl (NIl)

409.61 (387.72)

2.21(NIl)

Closing Balance as on 31.03.2015

3.47(3.52)

3,658.75 (3,393.33)

255.68 (214.67)

72.96(52.35)

6.85 (6.85)

85.50(85.50)

442.00(442.00)

2,386.31(1,956.17)

6,002.63(1,104.55)

Figures in bracket relates to previous year

35.10 : DISCLOSURE UNDER ACCOUNTING STANDARD-7 ON “CONSTRUCTION CONTRACTS”

(` in lakhs)


i) Contract Revenue recognized as revenue for the period [Refer Note 23.2]

38,991.60 34,129.05

ii) Contract costs incurred and recognized profits (less recognized losses) upto the reporting date

4,34,382.60 3,95,391.00

iii) Advances received 12,324.56 11,815.09

iv) Gross amount due from customers for contract work 33,701.39 31,075.35

v) Gross amount due to customers for contract work 3,701.62 4,302.17


132


35.11 : DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON "EMPLOYEE BENEFITS"

A. Defined Benefit Scheme

Gratuity : Payable on separation @ 15 days salary for each completed year of service to eligible employees who render continuous service of 5 years or more, subject to a maximum limit of ̀ 10.00 lakhs.

leave Encashment: Payable on separation to eligible employees who have accumulated earned leave and half pay leave. Maximum limit of accumulation is 300 days (both earned leave and half pay leave taken together). However, no commutation of HPl would be permissible for the purpose of encashment of 300 days leave as above. Encashment of accumulated earned leave is also allowed upto 30 days once in a calendar year.

Provident Fund: 12% of Basic Pay & Dearness Allowance contributed to the Provident Fund Trust by the Company.

Post Retirement Medical Benefits : Available to retired employees at company's hospitals or a fixed amount of ` 2,400/- p.a. payable under Outdoor Medical Treatment (ODMT) scheme

Post Retirement Settlement Benefits: Payable to retiring employees for settlement upto their home town.

Employees' Family Benefit Scheme: Monthly payments to disabled separated employees/legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

long Service Award: Payable in kind on rendering 15 years of service and also on rendering 30 years of service.

Retirement Gift: Payable in kind on retirement.

lTC/lTA: Non-executive regular employees are entitled to one lTC and one lTA according to rates in the eligible grade, in a block of four years.

133



B. Reconciliation of Present value of Defined Benefit Obligation (DBO)

(` in lakhs)

1 2 3 4 5 6 7 8

Sl. Particulars Gratuity leave Encashment

Post Retirement

Medical Benefits

Post Retirement Settlement

Benefits

EFBS Retirement Gift

long Service Award

lTC/lTA

P.v. of DBO (Opening) 5,586.47 9,003.23 455.44 171.64 162.74 24.29 13.13 81.62

P.V. of DBO (Opening)(Previous Year) 6,007.91 10,985.59 472.16 177.80 122.28 21.72 13.38 85.03

1 Current Service Cost 128.34 877.28 - 8.66 - 1.22 1.91 -

Current Service Cost (Previous Year) 163.24 934.38 - 9.49 - 1.16 1.99 -

2 Interest Cost 466.04 729.67 39.42 14.41 12.88 2.04 1.19 6.44

Interest Cost (Previous Year) 458.44 817.30 36.41 13.66 10.64 1.67 1.06 6.03

3 Contributions made - - - - - - - -

Contributions made (Previous Year) - - - - - - - -

4 Actuarial loss/ (Gain) 287.25 760.66 81.46 0.83 43.35 (3.12) 0.78 13.28

Actuarial Loss/ (Gain) (Previous Year) (298.29) (1,899.18) (20.04) (20.36) 69.68 5.62 (1.72) 22.84

5 Plan Amendments - - - - - - - -

Plan Amendments (Previous Year) - - - - - - - -

6 Curtailment loss / (gain) - - - - - - - -

Curtailment loss/ (gain) (Previous Year) - - - - - - - -

7 Premium Paid (11.53) - - - - - - -

Premium Paid (Previous Year) (12.53) - - - - - - -

8 Past Service Cost - - - - - - - -

Past Service Cost (Previous Year) - - - - - - - -

9 Benefit Paid (876.56) (1,897.72) (31.18) (14.29) (44.05) - (0.37) (15.64)

Benefit Paid (Previous Year) (732.30) (1,834.86) (33.09) (8.95) (39.86) (5.88) (1.58) (32.28)

10 P.v. of DBO (Closing) 5,580.01 9,473.12 545.14 181.25 174.92 24.43 16.64 85.70

P.V. of DBO (Closing) (Previous Year) 5,586.47 9,003.23 455.44 171.64 162.74 24.29 13.13 81.62

Experience Gain/(loss) adjustments on Plan liabilities as on 31.03.2015

(109.59) 49.00 36.29 (21.17) 38.69 (5.01) (1.02) 7.22


42.56 (3,169.00) (17.50) (17.78) 84.48 2.52 (2.26) 21.73


(503.06) 162.49 (8.90) (18.91) 41.66 (0.87) (2.49) 11.50


(129.89) 144.00 30.38 (5.85) 1.33 (2.79) 0.32 (53.56)


506.54 (227.37) (22.78) (10.41) 14.97 0.91 (0.26) (174.49)


134


(` in lakhs)

1 2 3 4 5 6 7 8

Sl. Particulars Gratuityleave

Encashment

Post Retirement

Medical Benefits


Benefits

EFBSRetirement

Gift

long Service Award

lTC/lTA

Experience Gain/(loss) adjustments on Plan Assets as on 31.03.2015

(13.78) - - - - - - -


(40.56) - - - - - - -


1.81 - - - - - -


4.18 - - - - - - -


14.77 - - - - - - -

C. Reconciliation of Fair value of Plan Assets and Obligations.The company has wholly/partly funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by lIC through whom the investments have been made by the Fund. Investments of the fund is also made in flexi deposit account with Banks. The reconciliation of fair value of assets of the Gratuity Fund and defined benefit Gratuity obligations is as under:

(` in lakhs)

Sl. Particulars As on 31.03.2015

As on 31.03.2014

As on 31.03.2013

As on 31.03.2012

As on 31.03.2011

1 F.v. of Plan Assets (Opening) 6,334.49 6,503.62 6,765.04 6,428.35 5,622.65

2 Expected return on Plan Assets (Net) 546.34 569.10 586.50 560.66 471.97

3 Benefit Payment (862.25) (712.67) (864.73) (943.16) (1,686.04)

4 Contributions made - 15.00 15.00 715.00 2,005.00

5 Actuarial (loss)/ Gain (13.78) (40.56) 1.81 4.18 14.77

6 F.v. of Plan Assets (Closing) 6,004.80 6,334.49 6,503.62 6,765.03 6,428.35

7 P.v. of D.B.O. (Closing) 5,580.01 5,586.47 6,007.91 6,320.35 6,695.40

Net liability / (assets) recognised in the Balance Sheet

(424.79) (748.02) (495.71) (444.68) 267.05

The Company expects to contribute the amount to the Gratuity Fund during the Year 2015-16 after considering liability and fund position.

135



D. Provident Fund

Company's contribution paid/payable during the year to the Provident Fund Trust are recognised in the Statement of Profit & loss. The Company's Provident Fund Trust is exempted under section 17 of Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The Company has already made adequate provisions in the accounts based on actuarial valuation of Provident Fund.

The defined benefit obligations, other than Gratuity and Provident fund, are unfunded.

E. Expenses recognised in Statement of Profit & loss for the year ended 31st March, 2015

(` in lakhs)

1 2 3 4 5 6 7 8

Sl. Particulars Gratuity leave Encashment

Post Retirement

Medical Benefits


Benefits

EFBS Retirement Gift

long Service Award

lTC/lTA

1 Current Service Cost 128.34 877.28 - 8.66 - 1.22 1.91 -

Current Service Cost (Previous Year) 163.24 934.38 - 9.49 - 1.16 1.99 -

2 Interest Cost 466.04 729.67 39.42 14.41 12.88 2.04 1.19 6.44

Interest Cost (Previous Year) 458.44 817.30 36.41 13.66 10.64 1.67 1.06 6.03

3 Actuarial loss/ (Gain) 301.03 760.66 81.46 0.83 43.35 (3.12) 0.78 13.28

Actuarial Loss/ (Gain) (Previous Year) (257.73) (1,899.18) (20.04) (20.36) 69.68 5.62 (1.73) 22.84

4 Past Service Cost - - - - - - - -

Past Service Cost (Previous Year) - - - - - - - -

5 Plan Amendments - - - - - - - -

Plan Amendments (Previous Year) - - - - - - - -

6 Curtailment loss / (gain) - - - - - - - -

Curtailment loss / (gain) (Previous Year)

- - - - - - - -

7 Expected Return on Plan Assets (557.87) - - - - - - -

Expected Return on Plan Assets (Previous Year)

(581.63) - - - - - - -

Total 337.54 2,367.61 120.88 23.90 56.23 0.14 3.88 19.72

Total (Previous Year) (217.68) (147.50) 16.37 2.79 80.32 8.45 1.32 28.87

Actual return on plan assets 544.09 - - - - - - -

Actual return on plant assets (Previous Year)

541.07 - - - - - - -


136


F. Actuarial Assumptions

2014-15 2013-14

1 Discount Rate (per annum) --- 7.90% 9.10%

2 Mortality Rate --- Indian Assured lives Mortality (2006-08) Ultimate

Indian Assured lives Mortality (2006-08) Ultimate

3 Withdrawal Rate (per annum)

--- 0.10% to 0.50% depending on age group. 10% flat at all age groups for Contract Employees

0.10% to 0.50% depending on age group. 10% flat at all age groups for Contract Employees

4 Medical Inflation Rate (per annum)

--- 12% for first 5 years and thereafter 8%

12% for first 5 years and thereafter 8%

5 Expected rate of return on Plan Assets (per annum)

--- 8.5% - 9.5% 9 - 9.5%

6 Salary Escalation (per annum) --- 15% on Basic Pay 15% on Basic Pay

The estimate of future salary increase considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors.

G. Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post-retirement medical benefit scheme:

(` in lakhs)

Sl. No.

Particulars One percentage point increase in medical

inflation rate

One percentage point decrease in medical

inflation rate

1 Increase/(decrease) on aggregate service cost and interest cost of post retirement medical benefits

2.61 (2.28)

2 Increase/(decrease) on present value of post retirement benefit obligations as at 31st March, 2015

33.02 (20.55)

H. Defined Contribution Scheme

Post Retirement Pension Benefits

i) 10% of Basic Pay & Dearness Allowance for executives to be contributed by the Company w.e.f. 01.01.2007.

ii) 6% of Basic Pay (Revised) & Dearness Allowance for non-executives to be contributed by the Company w.e.f. 01.01.2012.

Post Retirement Medical Benefits 1.19% of Basic Pay & Dearness Allowance for executives and non executives to be contributed by the Company w.e.f. 01.01.2007.

I. Expenses recognised in Statement of Profit & loss for the year(` in lakhs)

Particulars Post Retirement Pension Benefits

Post Retirement Medical Benefits

2014-15 2013-14 2014-15 2013-14

Expenses charged to Statement of Profit and loss 1,509.57 1,816.38 174.98 180.12

137



35.12 : DISCLOSURE UNDER ACCOUNTING STANDARD-18 ON “RELATED PARTY DISCLOSURES”

i) The list of Related Parties and their relationships are given below:

Nature of Relationship Name of the Related Parties

Key Management Personnel Shri A. K. Tyagi

Shri M. N. Sharif (upto 31.10.2014)

Shri S. Chattopadhyay

Shri S. S. Torka (upto 31.10.2014)

Shri D. Dutta

Shri S. R. Sengupta (w.e.f. 01.11.2014)

Shri A. P. Singh (w.e.f. 01.11.2014)

Shri Syedain Abbasi, IAS

Shri V. K. Thakral, IAS (upto 12.03.2015)

Smt Bharathi S. Sihag, IAS (w.e.f. 16.03.2015)

Nature of Relationship Name of the Related Party

Joint Venture Company M/s. Metallurgical & Engineering Consultants (Nigeria) limited

ii) The details of transactions between the Company and the Related Parties are given below:(` in lakhs)

Sl. No.

Nature of transactions key Management Personnel Joint venture

2014 -15 2013-14 2014-15 2013-14

a) Managerial Remuneration 145.00 138.47 - -

b) Employee Benefits (P.V. of DBO as per actuarial valuation)

110.81 108.95 - -

c) Sitting Fees - 2.52 - -


138


35.13 : DISCLOSURE UNDER ACCOUNTING STANDARD-27 ON “FINANCIAL REPORTING OF INTEREST IN JOINT VENTURES”

As per Accounting Standard-27 ‘Financial Reporting of Interest in Joint Ventures’, the Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company, incorporated in Nigeria, are given below:

(` in lakhs)

Name of the Joint venture

Company

% of Company’s Ownership

Interest

Assets liabilities Income Expenditure Contingent liabilities

CapitalCommit-

ments

Metallurgical & Engineering Consultants (Nigeria) limited

50(50)

3.41(27.60)

313.36(335.47)

11.76(15.15)

46.14(55.48)

NIl(NIl)

NIl(NIl)

Figures in bracket relates to previous year

The above figures are based on the audited accounts of Metallurgical & Engineering Consultants (Nigeria) ltd. for the year ending 31.12.2014. Reporting currency of Metallurgical & Engineering Consultants (Nigeria) ltd. is Naira.

Assets and liabilities are reported using the closing rate of exchange as on 31.12.2014 whereas Income and Expenditure are reported using the average exchange rate in force during the year 2014 as available.

35.14 Considering the nature of company’s business and the type of assets held by the company, there is no indication of loss due to impairment of assets as at 31.03.2015 as per Accounting Standard -28.

35.15 In case of foreclosure of jobs, the fee settled by the client is considered as 100% value of work done and income is accounted for accordingly. In case the settled fee is less than the income already booked, such excess income is charged to revenue under the head “Fees Withdrawn” (Refer Note 30).

35.16 Owing to uncertainty, income from foreign consultancy jobs for the clients against contracts or letters of intent or work orders or exchange of letters, which stipulate fixed price, is recognized on the basis of amount received from the clients against work done. In such cases, the percentage progress method and threshold criteria are not applied.

35.17 In view of the legal opinion obtained on 6.11.90 by the Company from Solicitor General of India, disclosure of quantitative detail of sales, purchases, jobs in progress (both opening & closing) in respect of equipment & components are not required in respect of Companies rendering Consultancy & Supply Services. Further, in view of varieties of materials in different Projects, which cannot be categorized in different groups, it is not possible to list out quantitative details.

35.18 Payments against Supplies & Services from SSI Units are generally made in accordance with agreed credit terms and there is no overdue amount.

35.19 There is no reported Micro, Small and Medium Enterprise as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006”, to whom the company owes dues.

139



35.20 : Disclosure on R&D: (` in lakhs)


Opening Balance of Fund 107.00 66.10

Add : Allocation / Provision made during the year 24.74 50.51

less : Adjustment / Utilisation made during the year 6.42 9.61

Closing Balance of Fund(Refer Note 20)

125.32 107.00

Necessary R&D Fund have been created debiting P/l account and R&D expenses have been debited to R&D Fund in line with DPE guidelines issued from time to time as applicable.

35.21 : Disclosure on CSR: (` in lakhs)


CSR Projects /Programmes, etc. 136.74 194.46

Others 7.72 NIl

Total Amount Spent 144.46 194.46

Amount unspent 135.64 7.58

TOTAl 280.10 202.04

Necessary CSR & SD Fund have been created debiting P/l account upto the financial year 2013-14 and CSR & SD expenses have been debited to CSR & SD Fund in line with DPE guidelines issued from time to time as applicable. Unspent amount carried forward in CSR & SD Fund is ` 487.74 lakhs as on 31.03.2015 (Previous Year ` 501.24 lakhs).

During the year, necessary CSR amount is appropriated / transferred to CSR Activity Reserve and CSR amount spent is adjusted / transferred from CSR Activity Reserve. Unspent CSR amount carried forward under the head CSR Activity Reserve is ` 135.64 lakhs as on 31.03.2015.

35.22 During the year, liability of ̀ 672.24 lakhs has been written back for closed/suspended consultancy jobs and the amount is included in Provision no longer required written back (Direct).

35.23 During the year, wage revision for non-executive employees w.e.f. 01.01.2012 have been approved by the Board of Directors in line with SAIl. The revised pay structure will be implemented w.e.f 01.01.2012 during 2015-16. A sum of ` 167.86 lakhs is provided during the year as ascertained liability (Previous Year ` 177.45 lakhs) towards wage revision of non-executive employees.

35.24 During the year, provision of ` 2,215.75 lakhs have been written back on account of revision in the proposed pension scheme for executive employees w.e.f. 01.01.2007 and proposed pension scheme for non-executive employees w.e.f. 01.01.2012 following finalization of wage revision for non-executive employees w.e.f. 01.01.2012.


140


NOTE 35.25 : DISCLOSURE UNDER ACCOUNTING STANDARD-17 ON "SEGMENT REPORTING"BuSINESS SEGMENT (PRIMARy SEGMENT) REPORTING FOR 2014-15

(` In lakhs)

SEGMENTS METAlS POwER INFRASTRuCTuRE OIl AND GAS TOTAl

Particular Current year

Previous Year

Current year

Previous Year

Current year

Previous Year

Current year

Previous Year

Current year

Previous Year

I. SEGMENT REvENuE

a. Segment Revenue 32,489.49 30,201.76 2,168.72 1,380.89 1,732.69 1,059.20 2,600.70 1,487.21 38,991.60 34,129.06

II. SEGMENT RESulTS

a. Segment Result [Profit/(loss)]

(3,055.83) 873.42 (1,847.14) (1,626.27) (1,088.82) (1,295.79) (397.15) (929.06) (6,388.94) (2,977.70)

b. Unallocated Corporate Expenses

1,015.10 1,421.22

c. Operating Profit/(loss) (7,404.04) (4,398.92)

d. Finance Costs 127.48 287.71

e. Interest Income 6,433.57 7,129.34

f. Income Taxes 1,273.61 1,921.00

g. Non Operating loss 2.13 3.52

h. Non Operating Income 4,422.74 4,443.79

i. Accretion / (Discretion) to Jobs-in-Progress

(21.94) (13.68)

j. Net Profit/(loss) 2,027.11 4,948.30

III. OTHER INFORMATION

a. Segment Assets 32,846.12 32,256.90 1,800.23 1,486.55 3,795.96 3,183.74 1,598.59 983.27 40,040.90 37,910.46

b. Unallocated Corporate Assets

80,989.30 85,865.25

c. Total Assets 1,21,030.20 1,23,775.71

d. Segment liabilities 41,658.81 38,853.49 2,104.43 2,144.82 7,448.08 7,217.68 1,548.00 14,870.08 52,759.32 63,086.07

e. Unallocated Corporate liabilities

25,004.90 16,742.18

f. Total liabilities 77,764.22 79,828.25

g. Non-Cash Expenses other than Depreciation

5,152.32 1,430.90 255.57 509.81 1,301.82 397.55 129.43 328.72 6,839.14 2,666.98

h. Capital Employed 36,621.03 39,591.03

141



35.26 : NOTES ON SEGMENT REPORTa) “Business Segments” have been identified as Primary Segments in accordance with the

guidelines of “Accounting Standard-17” on Segment Reporting issued by ICAI considering the return/risk profiles of the businesses, the organisation structure and the management reporting system.

b) As a part of business restructuring process, the core business activities of the organisation have been regrouped and classified into four “Strategic Business Units” (SBUs) in line with the recommendation of the Consultants w.e.f. 2004-05 as below:

Segment Definitions:

i) "Metals" includes Iron & Steel, Rolling Mills, Non-Ferrous, Raw Materials & Mining, Refractories etc.

ii) "Power" includes Power plant- Thermal & Hydel, Transmission & Distribution, RlA & RMU studies etc.

iii) "Oil & Gas" includes Oil & Gas pipelines, Petro-chemical & Refineries, POl Depots, Retail Outlets etc.

iv) "Infrastructure" includes Civil & Structural Engineering, Architecture & Town Planning, Ports & Material Handling, Roads, Highways, Bridges, & Flyovers, Defence, Environmental & Hydro engineering, Management Advisory Services, Information Technology etc.

c) Segment Revenue comprises income from Construction Contracts and income from Engineering & Consultancy Services for the Jobs in India and abroad.

d) Unallocated corporate expenditure includes expenses incurred on corporate services provided to Business Segments and other expenses not allocable on a reasonable basis to Business Segments.

e) Disclosure of Information on Geographical Segment (Secondary Segment) is not made considering the risk and return of business activities / operations being carried out by the company which are not affected by the geographical conditions / locations of the Business Centres / Project Sites etc.

f) Segment Assets and Segment liabilities represent operating assets and liabilities respectively which are directly attributable to the segment or allocated to the segment on a reasonable basis.

g) Fixed Assets (tangible and intangible) used in the company’s business are common in nature for all by and large and therefore are not directly attributable to the segment or can be allocated to the segment on a reasonable basis.

35.27 Due to changes in Accounting Policy during 2014-15, depreciation for the year is increased by ` 260.84 lakhs as ascertained and profit is decreased accordingly.

35.28 Amounts in the Financial Statements and Notes are rounded off to ` in lakhs with two decimal places, except for per share data and as otherwise stated.

35.29 Previous year’s/year-to-date figures have been regrouped / recast wherever necessary in the Balance Sheet, Statement of Profit & loss, Cash Flow Statement and Notes.


142


NOTE 36 : FORM AOC - I

(Statement pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 relating to Associate Companies and Joint ventures)

Part “B”: Associates and Joint ventures

Name of Joint venture M/s Metallurgical & Engineering Consultants (Nigeria) limited

1. latest audited Balance Sheet Date For the year ending on 31.12.2014

2. Shares of Joint ventures held by the company on the year end

No. 5000

Amount of Investment in Joint Venture ` 7.60 lakhs

Extend of Holding % 50%

3. Description of how there is significant influence

Majority of the members of the Board of Directors of M/s Metallurgical & Engineering Consultants (Nigeria) limited are represented by the Directors/ Senior Managerial Personnel of MECON limited.

4. Reason why the associate/joint venture is not consolidated

Consolidation is not applicable for Joint Venture company.

5. Networth attributable to Shareholding as per latest audited Balance Sheet

(-) ` 309.94 lakhs (50%)

6. Profit / loss for the year (-) ` 34.38 lakhs

i. Considered in Consolidation Not Applicable

ii. Not Considered in Consolidation Not Applicable

In terms of our report of even dateFor v. k. JINDAl & CO.CHARTERED ACCOUNTANTS

Sd/- Sd/-

(RAvI BAMBHA) (R. H. JuNEJA) COMPANY SECRETARY DEPUTY GENERAl MANAGER I/C (FINANCE)

Sd/-(R.S. AGARwAl)PARTNERMemb.No.076081Firm Regn. No.001468C

Sd/- Sd/-

(S. CHATTOPADHyAy) (A. k. TyAGI) DIRECTOR (PROJECT) CHAIRMAN-cum-MANAGING DIRECTOR

Place : Ranchi

Dated : 27.07.2015

½ãìŒ¾ã ‡ãŠã¾ããÃÊã¾ã / MAJOR OFFICES

ÍãÖÀ / City ªîÀ¼ããÓã / Phone ¹ãõŠ‡ã‹Ôã / Fax ƒÃ-½ãñÊã / e-mail

ºãòØãÊãìÁ / Bangalore +91-80-26252000 +91-80-26576352 [email protected]

¶ãƒÃ ãäªÊÊããè / New Delhi +91-11-22041872 +91-11-22041214 [email protected]

¶ãÌããè ½ãì½ºãƒÃ / Navi Mumbai +91-22-27812155-58 +91-22-27812275 [email protected]

Þãñ¸ãõ / Chennai +91-44-26184873 +91-44-26184874 [email protected]

‡ãŠãñÊã‡ãŠã¦ãã / Kolkata +91-33-22822381-82 +91-33-22824441 [email protected]

CIN No. - U74140JH1973GOI001199

For Enquiry Contact:

Dy. General Manager, I/c (Infra & Corporate Communications)

Phone : +91-651-2481026

Fax : +91-651-2482214/ 2482189

E-mail : [email protected]

Head Office:

Vivekananda Path, Doranda, Ranchi - 834002, Jharkhand, India

½ãìŒ¾ããÊã¾ã:ãäÌãÌãñ‡ãŠã¶ã¶ª ¹ã©ã, ¡ãñÀ¥¡ã, ÀãúÞããè-834002 (¢ããÀŒã¥¡), ¼ããÀ¦ã

¹ãîœ¦ããœ ‡ãñŠ ãäÊã† Ôã½¹ãÃ‡ãŠ ‡ãŠÀò:„¹ã ½ãÖã¹ãÆºãâ£ã‡ãŠ ¹ãÆ¼ããÀãè (‚ãã£ããÀ¼ãî¦ã ÔãâÀÞã¶ãã †Ìãâ ãä¶ãØããä½ã¦ã ÔãñÌãã†â)

ªîÀ¼ããÓã : +91-651-2481026

¹ãõŠ‡ã‹Ôã : +91-651-2482214/ 2482189

ƒÃ ½ãñÊã : [email protected]

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MECON LIMITED(A Govt. of India Enterprise)

(¼ããÀ¦ã ÔãÀ‡ãŠãÀ ‡ãŠã ÔãâÔ©ãã¶ã)

705/Nov-15/Sumudran/0651-2204437

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