అకౌంట్స్ గమనికలుMcNally Bharat Engineering Company Ltd.

Mar 31, 2025

(u) Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized when the Company has a present legal or constructive obligation as a result of past events, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
amount of the obligation can be reliably estimated.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is a
pre - tax rate that reflects current market assessments of the time value of money and the risk specific to the liability.
The discount rate does not reflect risks for which future cash flow estimates have been adjusted. The increase in the

provision due to the passage of time is recognised as interest expense in the Standalone Statement of Profit and Loss.

A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company or a present obligation that arises from past events where
it is either not probable that an outflow of resources embodying economic benefits will be required to settle the
obligation or amount of the obligation cannot be measured with sufficient reliability.

When there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no
provision or disclosure for contingent liability is made.

Contingent Assets are not recognised but are disclosed when an inflow of economic benefits is probable. However,
when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition
is appropriate.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

Provision for warranty

The estimated liability for warranty is recorded when products are sold. These estimates are established using
historical information of previous 18 months’ sales on an average, management estimates regarding possible future
incidence based on corrective actions on product failure.

(v) Employee Benefits

(i) Short - term Obligations

Liabilities for wages and salaries, including compensated absences which are expected to be availed or encashed
within 12 months after the year end and non - monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognized in respect
of employees’ services up to the end of the reporting period and are measured at the amounts expected to be
paid when the liabilities are settled. The obligations are presented as non-current liabilities in the Standalone
Balance Sheet if the entity does not expect actual settlement will occur within the operating cycle after the
reporting period.

Employees’ State Insurance Scheme: Contribution to Central Government of India administered Employees’
State Insurance Scheme for eligible employees is recognized as charge in the Standalone Statement of Profit and
Loss in the year in which they are accrued.

(ii) Other Long Term Employee Benefit Obligations

The liabilities for earned leave, sick leave and long service award are not expected to be settled wholly within 12
months after the end of the period in which the employees render the related service. They are therefore measured
as the present value of expected future payments to be made in respect of services provided by employees up
to the end of the reporting period using the Projected Unit Credit Method. The benefits are discounted using
the yield on government securities at the end of the reporting period that have terms approximating to the
terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial
assumptions are recognized in the Standalone Balance Sheet with a corresponding debit or credit to retained
earnings through Other Comprehensive Income in the period in which they occur.

The obligations are presented as current liabilities in the Standalone Balance Sheet if the entity does not have
an unconditional right to defer settlement for at least the operating cycle after the reporting period, regardless
of when the actual settlement is expected to occur.

(iii) Defined Benefit Plans

The Company operates defined benefit plans such as Gratuity, Post - employment medical obligations and
Provident Fund (administered by independent Trust).

The Company provides for gratuity covering eligible employees in accordance with Payment of Gratuity Act, 1972.
The plan provides for lump sum payment to vested employees at retirement, death, incapacitation or termination of
employment. The gratuity fund is administered by independent Trustees. Plan assets are managed by Life Insurance
Corporation of India (LICI).

The Company provides for post - retirement medical benefits to eligible retired employees. The entitlement to these
benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a
minimum service period. The expected costs of these benefits are accrued over the period of employment using the
same accounting methodology as used for defined benefit plans.

In the previous year, the Company maintained a Trust for depositing employees’ provident fund contributions.
However, with effect from 1st April 2024, the Employees’ Provident Fund Organisation (EPFO) issued a notice
withdrawing the exemption granted to the Trust. Accordingly, the Company has commenced depositing the provident
fund contributions directly with the Regional Provident Fund Office during the current financial year. The balance
lying with the Trust is in the process of being transferred to the Regional Provident Fund Authorities.

The liability or asset recognized in the Standalone Balance Sheet in respect of the above defined benefit plans is the
present value of the defined benefit obligation less the fair value of plan assets at the end of the reporting period. The
defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated
future cash outflows by reference to market yields at the end of the reporting period on government bonds that have
terms approximating to the terms of the related obligation.

- Superannuation Fund

This is the defined contribution plan. The Company contributes a certain percentage of the eligible salary for
employees covered under the scheme towards superannuation fund administered by the Trustees. The Company
has no further obligations for future superannuation benefits other than its contributions and recognizes such
contributions as expense in the period in which the related employee services are rendered.

- Gratuity

This is a defined benefit plan. The schemes, which are funded with Life Insurance Corporation of India (LIC), are
administered by independent trusts. The liability is determined based on year-end actuarial valuation using Projected
Unit Credit Method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
by reference to market yields at the end of the reporting period on government bonds that have terms approximating
to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation
and the fair value of plan assets. This cost is included in employee benefits expense in the Standalone Statement of
Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognized in the period in which they occur, directly in other comprehensive income. They are included in retained
earnings in the Standalone Statement of Changes in Equity and in the Standalone Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognized immediately in the Statement of Profit and Loss as past service cost

- Bonus plans

The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.

(w) Non- Current Assets held for sale.

The Company classifies non-current assets and disposal groups as held for sale if their carrying amounts will be
recovered principally through a sale rather than through continuing use. Actions required to complete the sale
should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be
withdrawn.

For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when
the exchange has commercial substance. The criteria for held for sale classification is regarded as met only when the
assets or disposal group is available for immediate sale in its present condition, subject only to terms that are usual
and customary for sales (or disposal groups), its sale is highly probable; and it will genuinely be sold, not abandoned.
The Company treats the sale of the asset or disposal group to be highly probable when:

a) The appropriate level of management is committed to a plan to sell the asset (or disposal group),

b) An active programme to locate a buyer and complete the plan has been initiated (if applicable),

c) The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its
current fair value,

d) The sale is expected to qualify for recognition as a completed sale within one year from the date of classification,
and

e) Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made
or that the plan will be withdrawn.

Non-Current Assets held for sale and disposal groups are measured at the lower of their carrying amount and the fair
value less cost to sell. Assets and liabilities classified as held for sale are presented separately in the Balance Sheet.

(x) Other Assets held for sale

Any other asset (tangible or intangible) held for sale is disclosed separately in Financial Statements, as appropriate.
PPE and Intangible Assets once classified as held for sale are not depreciated or amortised.

(y) Exceptional items

When items of income and expenses within the statement of profit and loss from ordinary activities are of such size,
nature and or incidence that their disclosure is relevant to explain the performance of the enterprise for the period,
the nature and amount of such material items are disclosed separately as exceptional items.

(z) Contributed Equity

Equity Shares are classified as equity. The issue expenses of securities which qualify as equity instruments are
written off against securities premium account.

(aa) Dividends Payment

Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting
period.

(ab) Earnings Per Share

(i) Basic Earnings Per Share

Basic Earnings Per Share is calculated by dividing:

• Profit/ (Loss) attributable to equity shareholders of the Company

• By the weighted average number of Equity Shares outstanding during the financial year.

(ii) Diluted Earnings Per Share

Diluted Earnings Per Share adjusts the figures used in their determination of basic earnings per share to take
into account

• Profit/(Loss) after income tax effect of interest and other financing costs associated with dilutive potential
Equity Shares, and

• The weighted average number of additional Equity Shares that would have been outstanding assuming the
conversion of all dilutive potential Equity Shares.

(ac) Recent pronouncements

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Third Amendment Rules
2024, dated 28th September 2024, to amend the following Ind AS which is effective from 30th September 2024.

Amendment to Ind AS 104

An insurer or insurance company may provide its financial statement as per Ind AS 104 for the purposes of consolidated
financial statements by its parent or investor or venturer till the Insurance Regulatory and Development Authority
notifies the Ind AS 117 and for this purpose, Ind AS 104 shall, as specified in the Schedule to these rules, continue to
apply.

The said amendment is not applicable to the Company and accordingly, has no impact on the Company’s financial
statements.

(ad) Rounding off amounts

All amounts disclosed in the Standalone Financial Statements and notes have been rounded off to the nearest lakhs
(with two places of decimal) as per the requirement of Schedule III to the Act unless otherwise stated.

Note 2: Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Standalone Financial Statements requires management to make judgements, estimates and
assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures relating to contingent liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the period. The application of accounting policies
that require critical accounting estimates involving complex and subjective judgments and the use of assumptions
in these standalone financial statements. Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of
changes in circumstances surrounding the estimates. Changes in estimates are reflected in the Standalone Financial
Statements in the period in which the changes are made and, if material, their effects are disclosed in the notes to the
Standalone Financial Statements.

In the process of applying the company’s accounting policies, management has made the following estimates,
judgments and assumptions, which have the significant effect on the amounts recognised and disclosed in the
Standalone Financial Statements:

1. Going Concern Assumptions in the preparation of the Standalone Financial Statements.

2. Expected Cost of Completion of Contracts.

3. Fair Value Measurement of Financial Instruments.

4. Impairment of Investments in Joint Venture and Subsidiaries

5. Recognition of Deferred Tax Assets for carried forward tax losses

6. Impairment of Trade Receivables and due from customer.

7. Provisions, Claims and Contingent Liabilities

8. Estimation of Defined Benefits Obligation

9. Useful life of Property, Plant and Equipment

Estimates and judgements are continually evaluated on an ongoing basis. They are based on historical experience
and other factors, including expectations of future events that may have a financial impact on the Company and
that are believed to be reasonable under the circumstances. Difference, if any, between the actual results and
estimates is recognised in the period in which the results are known.

i) Terms and Rights attached to Equity Shares:

Each Equity Share has a par value of Rs 10/-. It entitles the holder to participate in dividends, and to share upon
liquidation of the company in proportion to the number of shares held and amounts paid thereon.

Every holder of Equity Shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each
share is entitled to one vote.

Terms and Rights attached to Compulsorily Convertible Preference Shares(CCPS):

Each CCPS is compulsorily convertible into one Equity Share at any time within 18 months from the date of allotment.
CCPS shall have priority with respect to payment of dividend or repayment of capital over equity shares of the
Company.

The holders of CCPS would not participate in the surplus assets and profits on winding up which may remain after
the entire capital has been repaid.

Each CCPS would carry a dividend of 1% which would be non cumulative.

ii) Shares of the Company held by Holding / Ultimate Holding Company

By virtue of implementation of Resolution Plan, Mandal Vyapar Private Limited holds 300 Lakh shares of the Company
which constitutes of 90% of the share capital. Consequently, Mandal Vyapar Private Limited has become the holding
company of the McNally Bharat Engineering Company Limited.

(ii) Leave Obligations

The Company has implemented a leave policy which is effective from 1st April 2025.

(iii) Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who
are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/
termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied
for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised
funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over
a period of time based on estimations of expected gratuity payments.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When
calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method
(present value of the defined benefit obligation calculated with the projected unit credit method at the end of the
reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior
period.

The plan liabilities are calculated using a discount rate set with reference to government bonds. If the plan assets
underperform this yield, this will create a deficit. The plan asset investments is with the Life Insurance Corporation of
India which administers the fund. The investments are expected to earn a return in excess of the discount rate and reduce
plan deficit.

(iv) Provident fund

In the previous year, the Company maintained a Trust for depositing employees’ provident fund contributions. However,
with effect from 1st April 2024, the Employees’ Provident Fund Organisation (EPFO) issued a notice withdrawing the
exemption granted to the Trust. Accordingly, the Company has commenced depositing the provident fund contributions
directly with the Regional Provident Fund Office during the current financial year. The balance lying with the Trust is in
the process of being transferred to the Regional Provident Fund Authorities.

The company contributed Rs. 77.71 Lacs And Rs. 81.48 Lacs during the years ended March 31, 2025 and March 31, 2024,
respectively, and the same has been recognised in the Statement of Profit and Loss under the head employee benefit
expenses.

Risks arising from defined benefit obligations

The defined benefit obligation plans typically expose the Company to actuarial risks i.e. investment risk, interest risk,
longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is
determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk: A decrease in interest rate will increase the plan liability; however, this will be partially offset by an increase
in the return on the plan assets.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of
the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan
participants will increase the plan’s liability.

Salary risk: The present value of defined plan liability is calculated by reference to the future salaries of plan participants.
As such, an increase in the salary of the plan participants will increase the plan liability.

Capital Management

The Company strives to manage its capital efficiently with a view to safeguard its ability to continue as a going concern
and to bring returns to its shareholders and stakeholders. The capital structure of the company is based on management''s
judgement of the appropriate balance of key elements in order to meet its strategic and day to day needs. The amount of
capital in proportion to risk is considered for capital structure management in light of changes in economic conditions
and the risk characteristics of the underlying assets. The Company''s policy is to maintain a stable and strong capital
structure with a focus on total equity so as to maintain investors, creditors and market confidence and to sustain future
developments and growth of its business. For the purpose of company''s capital management, capital includes issued
capital and all other equity reserves. The Company manages its capital structure in light of changes in the economic and
regulatory environment and the requirments of the financial covenants. However, in view of certain factors, challenges
and changes faced by the Company over past few years as explained in Note 41 to the Standalone Financial Statements,
networth of the Company has been fully eroded. The management expects that overall financial health of the Company
would improve upon successful implementation of resolution plan as approved by the Hon’able National Company Law
Tribunal.

Loan Covenants

Under the terms of the major borrowing facilities, the Company is required to comply with various financial covenants.
The Company has been under financial stress due to external factors. EBITDA margins of the Company have not been
sufficient to service interest/ principal repayment even after infusion of funds by the promoters from time to time during
the earlier years. The company has not been able to comply with some of the covenants during the current as well as the
previous years. The Company has persisting defaults in repayment of loans or borrowings to banks and other lenders.

Note 24: Risk Management

The Company''s activities is exposed to credit risk, liquidity risk and market risk.

The Company''s risk management is carried out by a treasury department under policies approved by the Board of
Directors. The treasury department identifies, evaluates and hedges financial risks in close cooperation with the
Company''s operating units. The Board provides written principles for overall risk management, as well as policies

covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments
and non-derivative financial instruments, and investment of excess liquidity.

(A) Credit Risk

Credit risk arises from Cash and Cash Equivalents, other bank balances, investments and other financial assets
carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers
including outstanding receivables and due from customers.

(i) Credit Risk Management

The Company assigns the following credit ratings to each class of financial assets based on assumptions, inputs and
factors specific to the class of financial assets.

VL1: High-quality assets, negligible credit risk

VL2: Quality assets, low credit risk

VL3: Standard assets, moderate credit risk

VL4: Substandard assets, relatively high credit risk

VL5: Low quality assets, very high credit risk

VL6: Doubtful assets, credit impaired

Macroeconomic information (such as regulatory changes, market interest rate or growth rates) is incorporated
as part of the internal rating model. Financial Assets are written off when there is no reasonable expectations of
recovery, such as debtor failing to engage in a repayment plan with the Company or where payer/borrower does not
have financial capability to repay its debts. Where loans or receivables have been written off, the Company continues
to engage in enforcement activities to attempt to recover the receivable dues.

(ii) Provision for Expected Credit Losses

The Company provides for expected credit loss of trade receivables, due from customers and other financial assets
based on historical trend, industry practices and the business environment in which the entity operates. Loss rates
are based on actual credit loss experience and past trends. Whenever required, past trend is adjusted to reflect the
effects of the current conditions and forecasts of future conditions that did not affect the period on which the historical
data is based, and to remove the effects of the conditions in the historical period that are not relevant to the future
contractual cash flows.

Significant Estimates and Judgements
Impairment of Financial Assets

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and
expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment
calculation, based on the Company’s past history, industry practices, existing market conditions and business environment
as well as forward looking estimates at the end of each reporting period.

(B) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability
of funding through an adequate amount of committed credit facilities to meet obligations when due and to close net
market positions. Due to the dynamic nature of the underlying business, the Company’s treasury maintains flexibility
in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the
Company’s liquidity position (comprising the undrawn borrowing facilities as below) and cash and cash equivalents
on the basis of expected cash flows. In addition, the Company’s liquidity management policy involves projecting cash
flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring Balance Sheet
liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(i) Maturity of Financial Liability

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their
contractual maturities for:

• all non-derivative financial liabilities, and

• net and gross settled derivative financial instruments for which the contractual maturities are essential for an
understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual cash flows, balances due within 12 months and more than 12
months.

(C) Market Risk

(i) Foreign Currency Risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to
the USD and EUR. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is
not the Company’s functional currency (Rupees ). The risk is measured through the expected foreign currency cash flows
based on the Company’s receipt and repayment schedule for recognised assets and liabilities denominated in a currency
other than “Rupees” . The objective of the hedging is to minimize the volatility of the INR cash flows of such recognised
assets and liabilities.

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).

The fair value of financial instruments that are not traded in an active market is determined using market approach and
valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific
estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Derivatives are valued using valuation techniques with market observable inputs such as foreign exchange spot rates and
forward rates at the end of the reporting period, yield curves, risk free rate of returns, volatility etc., as applicable.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally
accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount
rate that reflects the credit risk of counterparty.

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be
equal to the carrying amounts of these items due to their short-term nature. Where such items are non-current in nature,
the same has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted
equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of
possible fair value measurements, cost has been considered as the best estimate of fair value.

(ii) Valuation technique used to determine Fair Value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet
date

(iii) Fair value of the Financial Assets and Liabilities measured at Amortised Cost

The Management considers that the carrying amount of finanicial assets and liabilities recognised in the financial
statements and carried at amortised cost approximates their fair value as on 31st March, 2025 and 31st March, 2024.

*In earlier years, the Company had entered into a put option agreement with EIG(Mauritius) Limited, who invested in one
of its subsidiary companies. In order to exercise the put option, the Investor submitted its request for Arbitration to the
International Chamber of Commerce Court, Singapore. The Arbitrator issued a dissenting opinion requiring the company
to pay damages amounting to Rs 21,102.69 Lacs (including interest) and legal cost. Thereafter Corporate Insolvency
Resolution Process “CIRP” has been initiated against the Company. Hence, EIG (Mauritus) Limited had filed its claim
to IRP/RP on 17th May 2022 and accordingly the liability of Rs. 7,773.61 Lakhs along with interest of Rs. 888.94 Lakhs
has been booked and remaining amount of Rs. 13,056.93 Lakhs has been considered as Contingent liability included in
''Claims against the company not acknowledged as debt''.

In view of Company’s admission under CIRP all existing civil legal proceedings will be kept in abeyance being under
moratorium u/s 14 of the Insolvency and Bankruptcy Code, 2016 till the conclusion of CIRP. Therefore, no impact has
been considered in the Financial Statements till the date of Implementaton of Plan. (Refer Note 39 to Note 41)

Details of Corporate Guarantees given covered under Section 186(4) of the Companies Act, 2013:-

b.Tata Capital Financial Services Limited (TCFSL), one of the Non-Convertible Redeemable Preference Shareholders of
the Company has preferred commercial arbitration petition during the year demanding redemption of Non-convertible
Redeemable Preference Shares due to breach of various financial covenants therein for their outstanding balance of Rs.
2,831.63 Lakhs along with 100% liquidation damages which is disputed by the Company. The Arbitrator has issued
interim directions to deposit an amount of Rs 2,831.63 Lakhs in Specifically designated Escrow Account or alternatively
furnish an unconditional and irrevocable bank guarantee of such amount. The order also restrained an Injunction of any
dealing of share of Mcnally Sayaji Engineering Limited which is pledged against the loan. Further, the Company submitted
an affidavit, the details of all its assets , properties (Movable or immovable) which are restrained for any dealing , transfer
and disposal of assets. Further, TCFSL had filed an application under Section 7 of the Insolvency and Bankruptcy Code,
2016 (“the IBC”) before the National Company Law Tribunal (“the NCLT”’) to initiate Corporate Insolvency Resolution
Process (“the CIRP”) against the Company. The NCLT has dismissed the application filed by the TCFSL not being a financial
creditor as per the provisions of the IBC. Further, TCFSL had filed an application with (“the NCLAT). As per NCLAT order
dated 17.08.2022, the appeal has dismissed as withdrawn granting liberty to raise any legally permissible contentions at
appropriate stage.

c. The Director General of GST Intelligence (DGGI) Kolkata had conducted investigation in 2019-20 at the Corporate Office
of the Company and denied Input Tax Credit of Rs. 945.04 Lakhs and also denied Input tax Credit of Rs 200.00 Lakhs in
2020-21 availed by the Company. Pending adjudication of the matter, the Company has included the Input Tax Credit in
Note 10 under Balance with Statutory/Government authorities. During the year, the department has conducted audit for
F.Y. 2017-18 and provided its observations thereon. Further proceedings in this matter has been kept in abeyance till the
conclusion of CIRP as moratorium is applicable u/s 14 of the Insolvency and Bankruptcy Code, 2016 .

It is not practicable to estimate the timing of cash outflows if any, in respect of the above matters pending resolution of
the arbitration/appellate proceedings.

Note 31: Excess Remuneration paid to Key Managerial Personnel

On 13th December 2022, the term of the Managing Director of the company had expired and the company has not
appointed the Managing Director or Manager in their place after the expiry of their term. Therefore, the company had not
paid or liable to pay any sum of remuneration to the KMP of the company. However, as per section 197(17) the company
has no need to taking any approval from the lender and shareholders in the current year.

Refer Note 25(A)(ii) for Loss Allowances on Trade Receivables

Sale of equipments and contract revenue in respect of construction contracts as reported in this accounts is in proportion
to the actual costs incurred on such contracts to their estimated cost. Here costs represent actual costs incurred inclusive
of future losses based on estimates of future costs of all on going projects made by the engineers of the Company and such
estimates are verified independently and certified by a Chartered Engineer. Unbilled revenue represents such contract
sales values less actual billing done on the basis of costs incurred.

The Company has made provision, as required under the Indian Accounting Standards, for material foreseeable losses on
long term contracts.

The Company has made revisions in the cost to complete certain projects during the year as part of their periodical
review of cost estimates.

The Company had entered in September 2003 a joint venture agreement with Elsamex S.A. whereby officially it was
appointed as a subcontractor in “West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH
10 with a link to Balurghat from Patiram,” (the project). However consequent to considerable delay in execution of the
project the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in
January 2006. The Company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand
over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time
by PWD. The Company had a legitimate claim of Rs. 1,517 lakhs towards receivable and Rs. 1,133 lakhs on account of
deposit against Performance Guarantee. Elsamex S.A. moved to arbitration and had claimed an amount of Rs. 7,334 lakhs
including an additional claim on consequential losses as per guidelines of “Federation Internationale Des Ingenieurs-
Conseils” (FIDIC). Arbitral Board in their meeting held on 25th October, 2010 upheld Elsamex S A''s claim and gave its
award in their favour. Under the award, a total amount of Rs. 3,535 Lakhs is receivable by the Company. A claim has
already been lodged with PWD. PWD preferred to challenge the verdict of the Arbitrators and has appealed to the High
Court in January, 2011 for a stay in the matter of payment of award money. The matter is still pending for hearing.

"Pursuant to the application bearing C.P (IB) No. 891/KB/2020, filed by one of the Financial Creditors of the
Company with the National Company Law Tribunal, Kolkata Bench (the "NCLT") under section 7 of Insolvency
and Bankruptcy Act, 2016 vide Order dated 29.04.2022 directed the initiation of Corporate Insolvency Resolution
Process (CIRP) against the Company. CA Anuj Jain (IBBI/IPA-001/IP-P00142/2017-18/10306) was appointed as the
Interim Resolution Professional (IRP). Thereafter, CA Ravi Sethia (IBBI/IPA-001/IP-P 01305/2018-2019/12052) was
appointed as the Resolution Professional (RP) vide NCLT Order dt.26.08.2022. Upon commencement of CIRP, the
powers of the Board of Directors of the Company stood suspended and the management of the Company remained
vested with the IRP/Resolution Professional (RP).

A Committee of Creditors (CoC) was constituted on 18.05.2022 and based on the collation of all claims by the IRP,
a report was submitted to the NCLT. The CoC was further reconstituted from time to time by the IRP/RP (such
reconstitution having taken place last on 29.12.2022) and intimation filed with the Hon''ble NCLT, Kolkata Bench.

The Resolution Plan of one of the Resolution Applicants received the CoC approval by the requisite majority, in
terms of the Insolvency and Bankruptcy Code, 2016 and the CoC authorised the RP to issue the Letter of Intent in
terms of the request for Resolution Plan and thereafter submit the application before the Hon''ble NCLT for final
approval of the Resolution Plan. The application was submitted before the NCLT on 03.08.2023.

The Hon''ble NCLT approved the Resolution Plan of one of the resolution applicants, namely M/s BTL EPC Limited,
the Successful Resolution Applicant ("SRA") vide Order dated 19.12.2023 and a Monitoring Committee ("MC"),
replacing the CoC, was formed in accordance with the said Order (the "Approved Resolution Plan"). Since, the
Approved Resolution Plan could not be implemented within the "effective date" i.e 17.02.2024 owing to uncontrollable
challenges faced by the SRA, the MC filed an application with the Hon''ble NCLT to seeking appropriate directions and
recourse with respect to the approved Resolution Plan. On 3rd December 2024, Hon''ble NCLT passed a subsequent
order granting extension of the "effective date" for the implementation of the Resolution Plan up to 21 days from the
date of uploading the NCLT Order i.e. up to 06.01.2025.

BTL EPC Limited, the SRA nominated Mandal Vyapar Private Limited ("MVPL") as its Special Purpose Vehicle
("SPV") which was noted at the 5th Monitoring Committee meeting held on 16th December, 2024 for the purpose of
implementing the approved Resolution Plan.

In terms of the approved Resolution Plan, the SRA was required to disburse payments in three tranches. As of March
31, 2025, the SRA had disbursed the first tranche and a part of the second tranche. These Financial Statements have
been prepared basis the payment of tranches mentioned hereinabove. The MC on receipt of the tranche amount had
been distributed the same to the respective claimants in accordance with the approved Resolution Plan.

At the 12th MC Meeting held on 12th February 2025, the SRA indicated its inability to honour the 2nd tranche
payment on the scheduled date and agreed to make a partial payment immediately, and the balance amount
on/before 10th March 2025 with interest for the delayed payment. However, at the 13th MC Meeting held on
13th March 2025, SRA informed that the funds have not been infused owing to procedural delays at its end.
At the 15th MC Meeting held on 27th March 2025, the SRA reiterated that while it was keen to make balance tranche
payments, certain challenges had caused delays in the infusion of funds. Accordingly, the SRA requested the MC Members
to allow additional time and extend their support until 30th June 2025 to make the balance payment along with interest.
Subsequently, the SRA filed Interlocutory Application No. 1908134/01611/2025 dated 22nd April 2025 before the
Hon’ble NCLT seeking extension of time till 30th September 2025 for payment of the outstanding tranches. As on the date
of approval of these Financial Statements, the application is under consideration of the Hon’ble NCLT

Upon implementation of the Resolution Plan, the entire existing share capital of the Company stood extinguished
and cancelled to the extent of 95% in accordance with the terms set forth in the Resolution Plan. Subsequent to such
extinguishment, the Company has issued fresh equity shares to Mandal Vyapar Private Limited (acting as the Special
Purpose Vehicle nominated by the Successful Resolution Applicant) and the Assenting Financial Creditors. As per plan,
SRA has to pay Re. 0.01 per share to all the existing shareholders as a “goodwill gesture” amounting to Rs. 21.16 Lakhs
which is transferred to a separate escrow account for payment to existing shareholders.

The Company has duly complied with all applicable legal and regulatory requirements, including but not limited to
those prescribed under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Company has filed all requisite forms and disclosures with the Bombay Stock Exchange (BSE),
National Stock Exchange (NSE) and Ministry of Corporate Affairs relevant to the allotment and listing of the newly issued
equity shares. And is awaiting approval from the respective stock exchange.

By virtue of implementation of the Resolution Plan, Mandal Vyapar Private Limited as on 31st March 2025 holds
300,00,000 equity shares of nominal value Rs. 10 each of Mcnally Bharat Engineering Company Limited constituting 90%
of its paid up share capital and hence, a holding company of the latter.

As per the approved Resolution Plan read with the NCLT Order dated 3rd December 2024, the SRA was required to pay
the agreed consideration in 3 (three) tranches at the scheduled dates. The SRA having paid the first tranche in full and a
part of the second tranche, the Monitoring Committee proportionately distributed the amount as under:

The above amounts have been adjusted with the existing liabilities admitted by the Resolution Professional.

In accordance with the Resolution Plan, the Company was required to disburse payments against admitted claims to
the extent of the funds received. However, the full settlement has not yet been completed and therefore, the balance
unutilized funds have been maintained in an escrow account held by the Company. This balance is presented under ''Other
Bank Balances’ in the Financial Statements.

After the date of approval of the Resolution Plan, a Bank Guarantee amounting to Rs. 275.34 Lakhs was invoked by
a customer. The related cost has been duly recognized in the Company’s books and funded entirely through internal
accruals. In accordance with the provisions of the Plan, this shall be treated as a payment made to secured financial
creditors, under the protection extended by the SRA.

The Company’s ability to continue as a going concern is dependent upon many factors including continued support from
the financial creditors, operational creditors, customers, and successful implementation of resolution plan respectively.
In view of the opinion of the management, resolution and revival of the Company is possible in the foreseeable future and
the monitoring committee shall also endeavor to protect and preserve the value of the property of the corporate debtor
and manage the operations of the corporate debtor as a going concern till the effective date yet to be identified by the
resolution applicant. Accordingly, the financial statements of the company have been prepared on going concern basis.

There shall be moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 till the effective date of the
NCLT order under sub-section (1) of section 31 of the IBC or till the adjudicating Authority passes an order for liquidation
of corporate Debtors under section 33 of the IBC, as the case may be. The reolution plan is yet to be implemented. The
company had received regulatory Enquiries/Notices/Summons/Show-Cause/Demand/Orders from various government
authorities such as Goods and Services Tax, Income Tax. In view of Company’s admission under CIRP all existing civil legal
proceedings will be kept in abeyance as moratorium u/s 14 of the Insolvency and Bankruptcy Code,2016 is applicable
till the effective date of the NCLT order. Therefore, no impact has been considered in these statements till the date of
Implementation of Plan.

The Holding Company has been categorised as Non Performing Asset by the lender banks and majority of the lender
banks have stopped debiting interest on their outstanding debts as per the Prudential Norms on Income Recognition
issued by the Reserve Bank of India. Accordingly, the Holding Company has not recognised interest expense on
Bank borrowings and Inter-Corporate Borrowings till 31st March, 2022. In the previous year, the holding company
has recorded interest expense till 31st March, 2024 on bank borrowing and inter corporate deposits based on the
claims filed with the RP and Memorandum Statements, if provided by the bank. For the remaining, the holding
company has charged interest assuming 16% rate of interest compounded quarterly.

In the current financial year the Holding company has provisionally accounted for interest amounting to Rs. 83,806.02
Lakhs on the oustanding borrowings from under the head Finance Costs.

The operational creditors have also submitted claims to the IRP/RP amounting to Rs. 53,320.16 lakhs, out of which
RP has provisionally admitted claims of Rs. 18,401.82 lakhs, as on 21.01.23 but reconciliation thereof with books is
under process, which will be taken into records appropriately once reconciliation and settlement with creditors is
complete.

Trade Receivables, Other Current Assets and Other Financial Assets are subject to confirmation and reconciliation
from respective parties and consequential reconciliation, outcomes of pending arbitration/settlements of claims and
adjustments arising therefrom, if any. The management, however, does not expect any material variation, Management is
also hopeful for recovery/realisation of trade receivables which include Rs. 27,052.24 Lakhs under Arbitration/ Proposed
Arbitration in the normal course of business, hence no impairment has been considered at this stage.

On January 6, 2025, the Company reconstituted its Board in accordance with the NCLT order, marking the cessation of
office for the previous directors. The newly constituted Board appointed directors and formed the statutory committees
as required under the Companies Act, 2013.

Pursuant to the approval and ongoing implementation of the Resolution Plan and after due assessment of the recoverability
of outstanding balances, Management assessed the balances lying in the books and having significant doubts on its
realisability considered that appropriate provisions/impairments should be made in that regard. Hence, necessary
provisions were made as a precautionary measure ensuring that the financial statements reflect a true and fair view of
the Company’s financial position. The provisions are disclosed under the head - Other Expenses in the Statement of Profit
and Loss.

In June 2024, the Company filed application with Stock Exchanges, seeking waiver of SOP fines levied under the SEBI LODR
Regulations and paid necessary processing fees in this regard. The matter is currently under review by the respective
stock exchanges. The company also filed an application with the Hon’ble NCLT, Kolkata in October 2024 seeking exemption
from the said SOP fines. The matter is posted for hearing by NCLT 16th June 2025.

Other Statutory Information

(i) There is no immovable property held in the name of the Company during the year.

(ii) The Company does not have any Benami property, where any proceeding has been initiated or is pending against the
Company for holding any Benami property.

(iii) The Company does not have any transactions with Companies struck off under section 248 of Companies Act, 2013
or section 560 of Companies Act, 1956, during the year.

(iv) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.

(v) Borrowings from bank and financial institution has been classified as Non-Performing Assets. So, filing of quarterly
statements are not required.

(vi) The Company does not have any charge or satisfaction of charge, which is yet to be filed with ROC beyond the
statutory period.

(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(viii) The Company has not advanced or loaned to or invested funds in any other person(s) or entity(ies), including
foreign entities (intermediaries) with the understanding that the intemediary shall:

(a) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(x) The Company has no such transaction unrecorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessment under the Income tax Act, 1961 such as , search or survey or any
other relevant provision of the Income Tax Act, 1961.

There are no significant subsequent events that would require adjustments or disclosures in the Standalone Financial
Statements as on the date of approval of these Standalone Financial Statements.

The Company has used accounting softwares for maintaining its books of account which have a feature of recording
audit trail (edit log) facility and the same were operating throughout the year for all relevant transactions recorded in
the softwares, except that audit trail feature is not enabled at the database level to log any direct data changes and in case
of modification by certain users with specific access. Further there was no instance of audit trail feature being tampered
with respect to the accounting softwares.

Previous year’s figures have been regrouped/ reclassified wherever necessary to correspond with the current year’s
classification/ disclosure.

Signature to Note 1 to 51

As per our report of even date

For V. Singhi & Associates For McNally Bharat Engineering Company Limited

Chartered Accountants

Firm Registration Number: 311017E

(Aniruddha Sengupta) (Pradip Kumar Bishnoi) Partha Sarathi Bhattacharyya

Partner Director Director

Membership Number: 051371 DIN 00732640 DIN 00329479

Place : Kolkata (Rajendra Mohan Mathur) (Rupayan Majumdar) (Indrani Ray)

Date : 22nd May 2025 Chief Executive Officer Chief Financial Officer Company Secretary

---

Mar 31, 2024

(i) Property, Plant and Equipment pledged as Security

Refer to note 36 on Property, Plant and Equipment and Capital Work-in-progress pledged as security by the Company.

(ii) Capital Commitments

Refer to note 28 for disclosure of contractual commitments for the acquisition of Property, Plant and Equipment.

The Company had recognised Deferred Tax Assets amounting to Rs 51,706.60 Lakhs upto 31st March, 2018. The Company believes that based on the infusion of fresh funds coming to the company with the Investors support there will be adequate future taxable profits available to the Company against which the Deferred Tax Assets can be utilised. However, the Company has not recognised further Deferred Tax Assets thereafter on prudent basis.

“Each Equity Share has a par value of Rs 10/-. It entitles the holder to participate in dividends, and to share upon liquidation of the company in proportion to the number of shares held and amounts paid thereon. Every holder of Equity Shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Each CCPS is compulsorily convertible into one Equity Share at any time within 18 months from the date of allotment. CCPS shall have priority with respect to payment of dividend or repayment of capital over equity shares of the Company.

The holders of CCPS would not participate in the surplus assets and profits on winding up which may remain after the entire capital has been repaid.

Each CCPS would carry a dividend of 1% which would be non cumulative. ii) Shares of the company held by Holding/Ultimate Holding Company

The Company does not have a Holding Company.

Nature and purpose:

In earlier years, the Company had recognised fair valuation gain of Rs. 83,804.25 Lakhs on account of deferred repayment of Inter Corporate Deposit from Seajuli Developers & Finance Limited (“SDFL”) and Woodside Parks Limited (“WPL”). Under CIRP, both the companies have submitted their financial claims to RP. RP has admitted such claims and as such the Company has reversed its fair valuation gain.

A. 11.50% Non-Convertible Redeemable Cumulative Preference Shares

(i) Non-Convertible Redeemable Preference Shares were redeemable in 8 equal quarterly installments commencing from 5th June, 2018 and the last installment payable was on 5th March, 2020 which has been on default as on the date of approval of these Standalone Financial Statements.

B. External Commercial Borrowing from ICICI Bank Limited

(i) Terms of repayment:

Loan having a balance outstanding of USD 6.60 lakhs,the last instalment date was due on 23rd December, 2018 which has been on default as on the date of approval of these Standalone Financial Statements.

(ii) Security details

Refer Note 36 for details of assets charged as security against these borrowings.

(ii) Leave Obligations

At Present there is no accumulation of leave which is encashable in future year.

(iii) Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The plan liabilities are calculated using a discount rate set with reference to government bonds. If the plan assets underperform this yield, this will create a deficit. The plan asset investments is with the Life Insurance Corporation of India which administers the fund. The investments are expected to earn a return in excess of the discount rate and reduce plan deficit.

The weighted average duration of the defined benefit obligation is 4.13 years (March 31, 2023 - 4.67 years). The expected contribution to the fund during the financial year 2024-25 would be Rs. 29.78 Lakhs

(iv) Provident fund

The company has an obligation to fund any shortfall on the yield of the trust''s investments compared to the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases, the actual return earned by the company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by the Actuarial Society of India and based on the assumptions provided below, there is no shortfall as at March 31, 2024 and March 31, 2023.

In accordance with actuarial valuation done for interest rate guarantee, the fund has sufficient assets against the defined benefit liability and hence no further liability arises for interest rate guarantee.

The plan assets have been primarily invested in government securities.

The company contributed Rs. 81.48 Lacs and Rs. 99.50 Lacs during the years ended March 31, 2024 and March 31, 2023, respectively, and the same has been recognised in the Statement of Profit and Loss under the head employee benefit expenses.

Risks arising from defined benefit obligations

The defined benefit obligation plans typically expose the Company to actuarial risks i.e. investment risk, interest risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk: A decrease in bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan assets.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan liability.

(i) The claim of EIG ( Mauritius ) Limited admitted by RP as per Arbitration Award has been recognised in the books of accounts.

(ii) McNally Sayaji Engineering Limited (MSEL), subsidiary of the Company, was admitted to CIRP vide order dated 11.02.2021 and eventually the Resolution plan of the successful Resolution Applicant was approved by COC and thereafter by the Hon''ble National Company Law Tribunal, Kolkata Bench, Court-I vide its order dt. 24.02.2023. The existing share capital of MSEL stands cancelled and delisted. Hence entire carrying value amounting to Rs 17,923.73 Lakhs and advance of Rs 70.15 Lakhs has been written off from the books of accounts as ''Exceptional Items''.

Note 24: Capital Management

Capital Management

The Company strives to manage its capital efficiently with a view to safeguard its ability to continue as a going concern and to bring returns to its shareholders and stakeholders. The capital structure of the company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day to day needs. The amount of capital in proportion to risk is considered for capital structure management in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investors, creditors and market confidence and to sustain future

developments and growth of its business. For the purpose of company’s capital management, capital includes issued capital and all other equity reserves. The Company manages its capital structure in light of changes in the economic and regulatory environment and the requirments of the financial covenants. However, in view of certain factors, challenges and changes faced by the Company over past few years as explained in Note 41 to the Standalone Financial Statements, networth of the Company has been fully eroded. The management expects that overall financial health of the Company would improve upon successful implementation of resolution plan as approved by the Hon’able National Company Law Tribunal.

Loan Covenants

Under the terms of the major borrowing facilities, the Company is required to comply with various financial covenants. The Company has been under financial stress due to external factors. EBITDA margins of the Company have not been sufficient to service interest/ principal repayment even after infusion of funds by the promoters from time to time during the earlier years. The company has not been able to comply with some of the covenants during the current as well as the previous years. The Company has persisting defaults in repayment of loans or borrowings to banks and other lenders.

Note 25: Risk Management

The Company’s activities is exposed to credit risk, liquidity risk and market risk.

The Company’s risk management is carried out by a treasury department under policies approved by the Board of Directors. The treasury department identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(A) Credit Risk

Credit risk arises from Cash and Cash Equivalents, other bank balances, investments and other financial assets carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables and due from customers.

(i) Credit Risk Management

The Company assigns the following credit ratings to each class of financial assets based on assumptions, inputs and factors specific to the class of financial assets.

VL1: High-quality assets, negligible credit risk

VL2: Quality assets, low credit risk

VL3: Standard assets, moderate credit risk

VL4: Substandard assets, relatively high credit risk

VL5: Low quality assets, very high credit risk

VL6: Doubtful assets, credit impaired

Macroeconomic information (such as regulatory changes, market interest rate or growth rates) is incorporated as part of the internal rating model. Financial Assets are written off when there is no reasonable expectations of recovery, such as debtor failing to engage in a repayment plan with the Company or where payer/borrower does not have financial capability to repay its debts. Where loans or receivables have been written off, the Company continues to engage in enforcement activities to attempt to recover the receivable dues.

(ii) Provision for Expected Credit Losses

The Company provides for expected credit loss of trade receivables, due from customers and other financial assets based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Whenever required, past trend is adjusted to reflect the effects of the current conditions and forecasts of future conditions that did not affect the period on which the

historical data is based, and to remove the effects of the conditions in the historical period that are not relevant to the future contractual cash flows.

Significant Estimates and Judgements Impairment of Financial Assets

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, industry practices, existing market conditions and business environment as well as forward looking estimates at the end of each reporting period.

(B) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close net market positions. Due to the dynamic nature of the underlying business, the Company’s treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities as below) and cash and cash equivalents on the basis of expected cash flows. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring Balance Sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(i) Maturity of Financial Liability

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for:

• all non-derivative financial liabilities, and

• net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.”

The amounts disclosed in the table are the contractual cash flows, balances due within 12 months and more than 12 months.

(C) Market Risk

(i) Foreign Currency Risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to the USD and EUR. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (Rupees ). The risk is measured through the expected foreign currency cash flows based on the Company’s receipt and repayment schedule for recognised assets and liabilities denominated in a currency other than “Rupees” . The objective of the hedging is to minimize the volatility of the INR cash flows of such recognised assets and liabilities.

(ii) Cash flow and fair value interest rate risk

The Company’s main interest rate risk arises from Current Borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During the year ended 31st March, 2024 and 31st March, 2023, the Company’s borrowings at variable rate were mainly denominated in INR.

The Company’s Borrowings are carried at amortised cost. The fixed rate borrowings are not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

(i) Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the Financial Instruments. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its Financial Instruments into the three levels prescribed under the Indian Accounting Standards. An explanation of each level follows underneath the table.

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Derivatives are valued using valuation techniques with market observable inputs such as foreign exchange spot rates and forward rates at the end of the reporting period, yield curves, risk free rate of returns, volatility etc., as applicable.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparty.

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis.

Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.

(ii) Valuation technique used to determine Fair Value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date

(iii) Fair value of the Financial Assets and Liabilities measured at Amortised Cost

The Management considers that the carrying amount of finanicial assets and liabilities recognised in the financial statements and carried at amortised cost approximates their fair value as on 31st March, 2024 and 31st March, 2023. Initial recognition of financial assets and liabilities are at fair value with subsequent measurement at amortised cost.

a) This does not include the impact of provision made on actuarial valuation of retirement benefit/ long term Schemes and provision made during the year towards Post employment benefits as the same are not separately ascertainable for individual directors.

b) Transactions with related parties mentioned above are as per terms and contracts approved by the COC. All transactions disclosed above were done on normal commercial terms and conditions and wherever applicable as per the market rates.

The Company has also leasing arrangements in respect of operating leases for premises. These leasing arrangements which are cancellable in nature are renewable by mutual consent and agreement. The aggregate of such lease rentals on account of short-term leases and low-value assets are charged as rent to the Standalone Statement of Profit and Loss.

*In earlier years, the Company had entered into a put option agreement with EIG(Mauritius) Limited, who invested in one of its subsidiary companies. In order to exercise the put option, the Investor submitted its request for Arbitration to the International Chamber of Commerce Court, Singapore. The Arbitrator issued a dissenting opinion requiring the company to pay damages amounting to Rs 21,102.69 Lacs (including interest) and legal cost. Thereafter Corporate Insolvency Resolution Process “CIRP” has been initiated against the Company. Hence, EIG (Mauritus) Limited had filed its claim to IRP/RP on 17th May 2022 and accordingly the liability of Rs. 7,773.61 Lakhs along with interest of

Rs. 888.94 Lakhs has been booked and remaining amount of Rs. 13,056.93 Lakhs has been considered as Contingent liability included in ''Claims against the company not acknowledged as debt''.

In view of Company’s admission under CIRP all existing civil legal proceedings will be kept in abeyance being under moratorium u/s 14 of the Insolvency and Bankruptcy Code, 2016 till the conclusion of CIRP. Therefore, no impact has been considered in the Financial Statements as of now. (Refer Note 40 to Note 42)

Details of Corporate Guarantees given covered under Section 186(4) of the Companies Act, 2013:-

b. Tata Capital Financial Services Limited (TCFSL), one of the Non-Convertible Redeemable Preference Shareholders of the Company has preferred commercial arbitration petition during the year demanding redemption of Non-convertible Redeemable Preference Shares due to breach of various financial covenants therein for their outstanding balance of Rs. 2,831.63 Lakhs along with 100% liquidation damages which is disputed by the Company. The Arbitrator has issued interim directions to deposit an amount of Rs 2,831.63 Lakhs in Specifically designated Escrow Account or alternatively furnish an unconditional and irrevocable bank guarantee of such amount. The order also restrained an Injunction of any dealing of share of Mcnally Sayaji Engineering Limited which is pledged against the loan. Further, the Company submitted an affidavit, the details of all its assets , properties (Movable or immovable) which are restrained for any dealing , transfer and disposal of assets. Further, TCFSL had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“the IBC”) before the National Company Law Tribunal (“the NCLT’”) to initiate Corporate Insolvency Resolution Process (“the CIRP”) against the Company. The NCLT has dismissed the application filed by the TCFSL not being a financial creditor as per the provisions of the IBC. Further, TCFSL had filed an application with (“the NCLAT). As per NCLAT order dated 17.08.2022, the appeal has dismissed as withdrawn granting liberty to raise any legally permissible contentions at appropriate stage.

c. The Director General of GST Intelligence (DGGI) Kolkata had conducted investigation in 2019-20 at the Corporate Office of the Company and denied Input Tax Credit of Rs. 945.04 Lakhs and also denied Input tax Credit of Rs 200.00 Lakhs in 2020-21 availed by the Company. Pending adjudication of the matter, the Company has included the Input Tax Credit in Note 10 under Balance with Statutory/Government authorities. During the year, the department has conducted audit for F.Y. 2017-18 and provided its observations thereon. Further proceedings in this matter has been kept in abeyance till the conclusion of CIRP as moratorium is applicable u/s 14 of the Insolvency and Bankruptcy Code, 2016 .

It is not practicable to estimate the timing of cash outflows if any, in respect of the above matters pending resolution of the arbitration/appellate proceedings.

Note 31: Dues to Micro,Small & Medium Enterprises

The amount due to Micro, Small and Medium Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises are as below:

Note 32: Excess Remuneration paid to Key Managerial Personnel

On 13th December 2022, the term of the Managing Director of the company had expired and the company has not appointed the Managing Director or Manager in their place after the expiry of their term. Therefore, the company had not paid or liable to pay any sum of remuneration to the KMP of the company. However, as per section 197(17) the company has no need to taking any approval from the lender and shareholders in the current year.

*Sale of equipments and contract revenue in respect of construction contracts as reported in this accounts is in proportion to the actual costs incurred on such contracts to their estimated cost. Here costs represent actual costs incurred inclusive of future losses based on estimates of future costs of all on going projects made by the engineers of the Company and such estimates are verified independently and certified by a Chartered Engineer. Unbilled revenue represents such contract sales values less actual billing done on the basis of costs incurred.

The Company has made provision, as required under the Indian Accounting Standards, for material foreseeable losses on long term contracts.

The Company has made revisions in the cost to complete certain projects during the year as part of their periodical review of cost estimates.

Current assets are pledged for working capital loans and cash credit facilities.

Non-current assets are pledged under first charge for ECB from ICICI Bank Limited and as second charge for working capital loans.

Investments in Mutual Funds relating to Rs. 86.90 Lakhs were put to lien for Loan taken from L&T Finance Limited. The given loan has been fully repaid in earlier year, however lien against the investment pledged has not been satisfied till date.

The Company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in “West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghat from Patiram,” (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in January 2006. The Company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The Company has a legitimate claim of Rs. 1,517 lakhs towards receivable and Rs. 1,133 lakhs on account of deposit against Performance Guarantee. Elsamex S.A. moved to arbitration and had claimed an amount of Rs. 7,334 lakhs including an additional claim on consequential losses as per guidelines of “Federation Internationale Des Ingenieurs-Conseils” (FIDIC). Arbitral Board in their meeting held on 25th October, 2010 has upheld Elsamex S A''s claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs. 3,535 Lakhs is receivable by the Company. A claim has already been lodged with PWD. PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court in January, 2011 for a stay in the matter of payment of award money. The matter is still pending for hearing.

Pursuant to the application under section 7 of Insolvency and Bankruptcy Act, 2016 filed by one of the Financial Creditors, being C.P (IB) No. 891/KB/2020, the National Company Law Tribunal (NCLT), Kolkata Bench, while disposing off, admitted the application vide order dated 29.04.2022 and directed to initiate Corporate Insolvency Resolution Process (CIRP) against the Company. CA Anuj Jain (IBBI/IPA-001/IP-P00142/2017-18/10306) was appointed as the Interim Resolution Professional (IRP). Thereafter, Mr. Ravi Sethia (IBBI/IPA-001/IP-P 01305/2018-2019/12052) has been appointed as Resolution Professional (RP) vide NCLT order dt.26.08.22. Upon commencement of CIRP, the powers of the Board of Directors of the Company stand suspended and management of the Company vest with the IRP/Resolution Professional (RP). Committee of creditors (COC) of the Holding Company has been constituted on 18.05.2022 on the basis of collation of all claims by the IRP and report is submitted to NCLT by IRP. The COC has been further reconstituted from time to time by the IRP/RP and intimation filed with the Hon''ble NCLT, Kolkata Bench.

The Resolution Plan of one of the Resolution Applicants has received the approval of COC by requisite majority, in term of the Insolvency and Bankruptcy Code, 2016 and COC authorised the RP to issue the Letter of Intent in term of the request for Resolution Plan and thereafter submit the application before the Hon''ble NCLT Court for final approval of the Resolution Plan. The application had been submitted before the Hon''ble NCLT Court on 3rd August, 2023. The Hon''ble National Company Law Tribunal, Kolkata bench-Court-I (NCLT) has approved the Resolution plan of the successful resolution applicant, namely M/s BTL EPC LTD vide its order dated 19.12.2023. However, the resolution plan submitted by BTL EPC Limited has not been implemented till date. Subsequently, the committee of creditors of the company filed an application with the Hon''ble NCLT to seek appropriate directions and recourse with respect to the approved resolution plan and the Corporate Insolvency Resolution Process(CIRP) of the Company. The matter is being heard by the Hon''ble NCLT and hearing has not been completed. The matter is currently Subjudice. Accordingly, the financial result of the company has been prepared on a going concern basis.

The Company’s ability to continue as a going concern is dependent upon many factors including continued support from the financial creditors, operational creditors, customers, and successful implementation of resolution plan respectively. In view of the opinion of the management, resolution and revival of the Company is possible in the foreseeable future and the monitoring committee shall also endeavor to protect and preserve the value of the property of the corporate debtor and manage the operations of the corporate debtor as going concern till the effective date yet to be identified by the resolution applicant. Accordingly, the financial statements of the company have been prepared on going concern basis.

There shall be moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 till the effective date of the NCLT order under sub-section (1) of section 31 of the IBC or adjudicating Authority passes an order for liquidation of corporate Debtors under section 33 of the IBC, as the case may be. The reolution plan is yet to be implemented. The company had received regulatory Enquiries/Notices/Summons/Show-Cause/Demand/Orders from various government authorities such as Goods and Services Tax, Income Tax. In view of Company’s admission under CIRP all existing civil legal proceedings will be kept in abeyance as moratorium u/s 14 of the Insolvency and Bankruptcy Code,2016 is applicable on the till the effective date of the NCLT order. Therefore, no impact has been considered in these results as of now.

The Company has been categorised as Non Performing Asset by the lender banks and majority of the lender banks have stopped debiting interest on their outstanding debts as per the Prudential Norms on Income Recognition issued by the Reserve Bank of India. Accordingly, the Company has not recognised interest expense on Bank borrowings and Inter-Corporate Borrowings till 31st March, 2022. In the previous year, the company has recorded interest expense till 31st March, 2023 on bank borrowing and inter corporate deposits based on the claims filed with the RP and Memorandum Statements, if provided by the bank. For the remaining, the company has charged interest assuming 16% rate of interest compounded quarterly.

In the current financial year the company has provisionally accounted for interest amounting to Rs. 73,333.91 Lakhs on the oustanding borrowings from under the head Finance Costs.

The operational creditors have also submitted claims to the IRP/RP amounting to Rs. 53,320.16 lakhs, out of which RP has admitted claims of Rs. 18,401.82 lakhs.

Trade Receivables, Other Current Assets and Other Financial Assets are subject to confirmation and reconciliation from respective parties and consequential reconciliation, outcomes of pending arbitration/settlements of claims and adjustments arising therefrom, if any. The management, however, does not expect any material variation, Management is also hopeful for recovery/realisation of trade receivables which include Rs. 41,093.12 Lakhs under Arbitration/ Proposed Arbitration in the normal course of business, hence no impairment has been considered at this stage.

Note: Profit/Loss for the year of Joint Ventures which are not material have not been considered in the Financial

Statements

Other Statutory Information

(i) There is no immovable property held in the name of the Company during the year.

(ii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(iii) The Company does not have any transactions with Companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956, during the year.

(iv) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender

(v) Borrowings from bank and financial institution has been classified as Non-Performing Assets. So, filing of quarterly statements are not required.

(vi) The Company does not have any charge or satisfaction of charge, which is yet to be filed with ROC beyond the statutory period.

(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(viii) The Company has not advanced or loaned to or invested funds in any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intemediary shall:

(a) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(x) The Company has no such transaction unrecorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessment under the Income tax Act, 1961 Such as , search or survey or any other relevant provision of the Income Tax Act, 1961.

As the powers of the Board of Directors have been suspended, the financial statements have not been adopted by the Board of Directors. However, the same have been reviewed and signed by the Chairman of the Monitoring Committee, Non-Executive director and KMPs of the Company.

There are no significant subsequent events that would require adjustments or disclosures in the Standalone Financial Statements as on the date of approval of these Standalone Financial Statements.

The Company has used accounting softwares for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same were operating throughout the year for all relevant transactions recorded in the softwares, except that audit trail feature is not enabled at the database level to log any direct data changes and in case of modification by certain users with specific access. Further there was no instance of audit trail feature being tampered with respect to the accounting softwares.

Previous year’s figures have been regrouped/ reclassified wherever necessary to correspond with the current year’s classification/ disclosure.

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Mar 31, 2018

1. Background

McNally Bharat Engineering Company Limited is a Company limited by shares, incorporated and domiciled in India. The registered office of the Company is located at 4, Mangoe Lane, Kolkata, 700001. The Company''s shares are listed on National Stock Exchange and Bombay Stock Exchange. The company is engaged in diversified construction activities primarily execution of Turnkey Projects.

Recent Accounting pronouncements

Appendix B to Ind AS 21, foreign currency transactions and advance considerations:

On March 28, 2018 the Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from April 01, 2018. The Company is in the process of assessing its effect on the financial statements and do not anticipate that the application of Appendix B to Ind AS 21 will have a significant impact on the financial position and/or financial performance of the Company.

Ind AS 115, Revenue from Contract with Customers:

On March 28, 2018, the MCA notified the Ind AS 115. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or service. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. Specifically, the standard introduces a five step approach to revenue recognition. The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.

- Modified Retrospective approach - Under this approach the standard will be applied retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch-up).

The effective date for adoption of Ind AS 115 is financial period beginning on or after April 01, 2018. The Company will adopt the Standard on April 01, 2018 by using the modified retrospective approach and accordingly, comparatives for the year ended March 31, 2018 will not be retrospectively adjusted. The Company is in the process of assessing its effect on the financial statements.

(i) Property, plant and equipment pledged as security

Refer to note 36 on property, plant and equipment and capital work in progress pledged as security by the company

(ii) Contractual obligations

Refer to note 28 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

* McNally Sayaji Engineering Limited (MSEL) was previously listed with Delhi Stock Exchange Limited (DSEL), Ahmedabad Stock Exchange Limited (ASEL) and Vadodara Stock Exchange Limited (VSEL). VSEL and ASEL stock exchanges have undergone compulsory / voluntary exit as per relevant SEBI circulars /orders. Further, SEBI has passed order for derecognition of DSEL. Considering the fact that the listing of MSEL was with the aforesaid stock exchanges, the market value of the quoted investments excludes the market value of the investment in MSEL in absence of availability of market quote.

** The Company has pledged its equity investment as security against loan taken by the Companies belonging to the same promoter group namely Babcock Borsig Limited, Williamson Magor & Co. Limited and Williamson Financial Services Limited.

*** The Company has pledged its investment to the extent of 23,37,211 equity shares as security against loan taken by its subsidiary Company namely McNally Sayaji Engineering Limited.

(i) Refer to note 36 on investments pledged as security by the company.

(ii) One of the subsidiaries of the Company i.e. McNally Sayaji Engineering Limited issued 36,00,000 Compulsorily Convertible Preference Shares (CCPS) on March 31, 2017 at face value of Rs. 10 each and premium of Rs. 65 thus totalling Rs. 27,00 lacs. This CCPS issue was in lieu of the money''s due by the subsidiary to the Company. On February 07, 2018, the Company has converted 18,00,000 CCPS into equity shares.

(i) Earmarked balances with bank represents balances held for margin money against issue of bank guarantees.

(ii) There are no repatriation restrictions with regard to cash and cash equivalents as at the end of the reporting period and prior periods.

Terms and rights attached to equity shares :

Each equity share has a par value of Rs. 10. It entitles the holder to participate in dividends, and to share in the proceeds of winding up the company in proportion to the number of shares held and amounts paid thereon. Every holder of equity shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Terms and rights attached to compulsorily convertible preference shares:

Each CCPS shall be compulsorily convertible into one equity share at any time within 18 months from the date of allotment. CCPS shall have priority with respect to payment of dividend or repayment of capital over equity shares of the company. The holders of CCPS would not participate in the surplus assets and profits on winding up which may remain after the entire capital has been repaid. Each CCPS would carry a dividend of 1% which would be non cumulative.

(ii) Shares of the company held by holding/ultimate holding company

The company does not have a holding company.

iii) Details of shareholders holding more than 5% of the aggregate equity shares in the company

v) Aggregate number of shares issued for consideration other than cash :

On March 26, 2018, the Company issued 1,20,00,000 Compulsorily Convertible Preference Shares (CCPS) of Rs.10 only per share at a premium of Rs. 52 per CCPS to the Promoter group Companies for part conversion of outstanding unsecured loan of Rs.7,440 lakhs. On March 31, 2018, the Company issued 3,21,51,515 Equity Shares of Rs.10 each at a premium of Rs.52 per share to the Promoter group companies pursuant to conversion of 3,21,51,515 CCPS which was allotted on March 30, 2017. Also, on March 31, 2018, the Company issued 3,70,29,273 Equity Shares of Rs.10 each at a premium of R 56 per share to Equity Shareholders and certain debenture holders of Vedica Sanjeevani Projects Private Limited (""Vedica"") pursuant to the conversion of 3,70,29,273 out of 4,16,21,273 CCPS allotted on March 30, 2017.

On March 30, 2017, the Company had issued Compulsorily Convertible Preference Shares (CCPS) at face value of Rs. 10 only per share and Rs. 56 only towards premium. CCPS totalling 4,16,66,666 numbers were issued to the promoter group companies for Rs. 27,499.99 and a further 4,16,21,273 numbers for Rs. 27,470.04 to the shareholders and debenture holders of Vedica Sanjeevani Projects Private Limited with whom the Company had entered into an agreement on February 17, 2017. Vide the same agreement entered into by the Company and Vedica Sanjeevani Projects Private Limited on February 17, 2017, the Company acquired 4,75,200 equity shares and 12,47,004 debentures of Vedica Sanjeevani Projects Private Limited.

Nature and purpose:

Securities premium reserve has arisen on issue of Equity Shares and Compulsorily Convertible Preference Shares (CCPS). The reserve will be utilised as per the provisions of the Companies Act, 2013.

Terms of repayment:

1. In case of loan having a nominal balance outstanding of Rs. 312 lakhs, repayable in 16 quarterly installments starting September 26, 2014. The last installment date being June 26, 2018.

2. In case of loan having a nominal balance outstanding of Rs. 7,000 lakhs, repayable in one prepayment installment and 12 quarterly installments starting May 15, 2017. The last installment date being February 18, 2020.

3. In case of loan having a nominal balance outstanding of USD 17.50 lakhs, repayable in 10 semi annual installments starting June 23, 2014. The last installment date being December 23, 2018.

4. In case of loan having a nominal balance outstanding of Rs. 10,000 lakhs, repayable in single bullet installment on January 7, 2019.

(ii) Leave obligations

The leave obligations cover the company''s liability for earned leave. The amount of the provision of Rs. 55.41 (March 31, 2017 — Rs. 91.05) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. The amount that the Company expects to fund within next 12 months is Rs. 143.

(iii) Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The plan liabilities are calculated using a discount rate set with reference to government bonds. If the plan assets under perform this yield, this will create a deficit. The plan asset investments is with the Life Insurance Corporation of India which administers the fund. The investments are expected to earn a return in excess of the discount rate and reduce plan deficit. The maturity profile of gratuity liability is as follows:

(iv) Provident fund

The company has an obligation to fund any shortfall on the yield of the trust''s investments compared to the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases, the actual return earned by the company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by the Actuarial Society of India and based on the assumptions provided below, there is no shortfall as at March 31, 2018 and March 31, 2017.

In accordance with actuarial valuation done for interest rate guarantee, the fund has sufficient assets against the defined benefit liability and hence no further liability arises for interest rate guarantee.

The plan assets have been primarily invested in government securities.

Assumptions used in determining the present value obligation of interest rate guarantee under the Deterministic approach:

The company contributed Rs. 338 lakhs and Rs. 337 lakhs during the years ended March 31, 2018 and March 31, 2017, respectively, and the same has been recognised in the Statement of Profit and Loss under the head employee benefit expenses.

Risks arising from defined benefit obligations

The defined benefit obligation plans typically expose the Company to actuarial risks i.e. investment risk, interest risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk: A decrease in bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan assets.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan liability.

The effective tax rate and the applicable tax rates for recognition of deferred tax income is same. The applicable tax rate is based on the enacted tax rates. There is no current tax liability as the Company has incurred losses in the current year.

The Company has recognised deferred tax assets on carried forward tax losses. The Company has concluded that the deferred tax assets will be recoverable using the estimated future taxable income based on the approved business plan and budget for the Company. The Company is expected to generate taxable income from 2019-20 onwards.

Capital management

The company strives to manage its capital efficiently with a view to safeguard its ability to continue as a going concern and to bring returns to its shareholders and stakeholders. The capital structure of the company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day to day needs. The amount of capital in proportion to risk is considered for capital structure management in light of changes in economic conditions and the risk characteristics of the underlying assets. The company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future developments and growth of its business. As a matter of prudence, the management brought in place infusion of capital by way of enhancement of Equity share capital and through issue of Share Warrants and Compulsorily Convertible Preference Shares during the current financial year.

Loan covenant

Under the terms of the major borrowing facilities, the Company is required to comply with various financial covenants. The Company has not complied with some of the covenants during the current as well as the previous year.

2. RISK MANAGEMENT

The company''s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The company''s risk management is carried out by a treasury department under policies approved by the board of directors. The treasury department identifies, evaluates and hedges financial risks in close cooperation with the company''s operating units. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(A) Credit Risk

Credit risk arises from cash and cash equivalents, investments and other financial assets carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables and due from customers.

(i) Credit risk management

The company assigns the following credit ratings to each class of financial assets based on assumptions, inputs and factors specific to the class of financial assets.

VL1: High-quality assets, negligible credit risk

VL2: Quality assets, low credit risk

VL3: Standard assets, moderate credit risk

VL4: Substandard assets, relatively high credit risk

VL5: Low quality assets, very high credit risk

VL6: Doubtful assets, credit impaired

Macroeconomic information (such as regulatory changes, market interest rate or growth rates) is incorporated as part of the internal rating model.

Financial assets are written off when there is no reasonable expectations of recovery, such as debtor failing to engage in a repayment plan with the Company or where payor/borrower does not have financial capability to repay its debts. Where loans or receivables have been written off, the Company continues to engage in enforcement activities to attempt to recover the receivable due.

ii Provision for expected credit losses

The Company provides for expected credit loss of trade receivables, due from customers and other financial assets based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Wherever required, past trend is adjusted to reflect the effects of the current conditions and forecasts of future conditions that did not affect the period on which the historical data is based, and to remove the effects of the conditions in the historical period that are not relevant to the future contractual cash flows.

The gross carrying amount of trade receivables is Rs.175,199.93 (March 31, 2017: Rs.170,483.57)

During the year, the Company has made write offs of trade receivables wherein it does not expect to receive future cash flows Rs.2,652.10 (March 31, 2017: Rs.1,351.14)

During the year, the Company has made write offs of expenses recoverable wherein it does not expect to receive future cash flows Rs.2,292,17 (March 31, 2017: R NIL)

Significant estimates and judgements

Impairment of financial assets

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, industry practices, existing market conditions and business environment as well as forward looking estimates at the end of each reporting period.

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close net market positions. Due to the dynamic nature of the underlying business, the Company''s treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities as below) and cash and cash equivalents on the basis of expected cash flows. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(i) Maturity of financial liability

The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for: all non-derivative financial liabilities, and net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows, balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(C) Market risk

(i) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to the USD and EUR. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the company''s functional currency (R). The risk is measured through the expected foreign currency cash flows based on the Company''s receipt and repayment schedule for recognised assets and liabilities denominated in a currency other than R . The objective of the hedging is to minimize the volatility of the R cash flows of such recognised assets and liabilities.

At the end of the reporting period the total notional amount of outstanding foreign currency forward contracts that the Company has committed to is USD 32.36 lakhs (March 31, 2017: USD 139.27 lakhs).

(ii) Cash flow and fair value interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During the year ended March 31, 2018 and March 31, 2017, the Company''s borrowings at variable rate were mainly denominated in INR and USD.

The Company''s borrowings are carried at amortised cost. The fixed rate borrowings are not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Indian accounting standard. An explanation of each level follows underneath the table.

Level 1 : It includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have net asset value calculated at the close of every day using observable inputs. The fair value of all equity instruments which are traded in stock exchange is valued using the closing price as at the reporting period.

Level 2 : The fair value of financial instruments that are not traded in the active market is determined using valuation technique which maximize the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs require to fair value an instruments are observable, the instrument is included in level 2.

Level 3 : If one or more of the significant input is not based on observable market data, the instrument is included in level

3. This is the case for unlisted equity securities and other financial instruments.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

(iii) Fair value of the financial assets and liabilities measured at amortised cost

Short-term financial assets and liabilities are stated at carrying value which is equal to their fair value.

The carrying amount of loans, advance to employees, cash and cash equivalents, other financial assets, trade payables, interest accrued, book overdraft in current accounts, capital creditors, employee benefits payable, security deposits, dividend accrued on preference shares, unpaid dividend and others are considered to be the same as their fair value, due to their short term nature.

The fair values for trade receivables, due from customers, security deposits and expenses recoverable are calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

Initial recognition of short term financial assets and liabilities are at fair value with subsequent measurement at amortised cost.

Note:

This does not include the impact of provision made on actuarial valuation of retirement benefit/ long term Schemes and provision made during the year towards Post employment benefits as the same are not separately ascertainable for individual directors.

3. DUES TO MICRO AND SMALL ENTERPRISES

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises are as below:

4. EXCESS REMUNERATION PAID TO KEY MANAGEMENT PERSONNEL

(A) Excess managerial remuneration paid for which the Company is yet to seek approval from the Central Government to regularize the same in terms of section 197(3) read with Schedule V to the Companies Act,2013 amounting to Rs. 40.82 lacs paid/payable to erstwhile one whole time director for the financial year ended March 31, 2018.

(B) Excess managerial remuneration paid for which approval in terms of section 197(3) read with Schedule V to the Companies Act,2013 is pending from the Central Government amounting to Rs.220.03 lacs paid/ payable to the managing director for the financial year ended March 31, 2018 and Rs.121.87 lacs paid/ payable to two erstwhile whole time directors for the financial year ended March 31, 2017.

Sale of equipments and contract revenue in respect of construction contracts as reported in this accounts is in proportion to the actual costs incurred on such contracts to their estimated cost. Here costs represent actual costs incurred inclusive of future losses based on estimates of future costs of all on going projects made by the engineers of the company and such estimates verified independently and certified by a Chartered Engineer. Unbilled revenue represents such contract sales values less actual billing done on the basis of costs incurred.

The company has made provision, as required under the Indian Accounting Standards, for material foreseeable losses on long term contracts.

The Company has made revisions in the cost to complete certain projects during the year as part of their periodical review of cost estimates.

5. SEGMENT INFORMATION

The company is primarily engaged in the business of construction and hence no separate disclosure has been made for segment reporting under Ind AS 108.

The company has earned its substantial revenue in 2017-18 and 2016-17 from India. All non current assets of the company are located in India.

Note:

Current assets except investments are pledged under first charge for working capital loans and under residual charge for rupee term loan of RBL Bank Limited. Investments amounting to R 262.18 lakhs are put under lien for loan taken from L&T Finance Limited. Refer Note 12(a).

Non-current assets are pledged under first charge for rupee term loan and ECB from ICICI Bank Limited and as second charge for working capital loans.

Refer Note 12(a) and 12(b) for details of assets charged as security.

6. As per the Scheme of Arrangement as sanctioned by the Hon''ble High Court at Calcutta vide its Order dated July 28, 2009 which was filed with the Registrar of Companies, West Bengal , Kolkata on September 01, 2009, for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) - the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of Jharkhand, Asansol, in the State of West Bengal and Bangalore, in the State of Karnataka has been transferred to MSEL with effect from the appointed date, i.e. April 01, 2008. As per the scheme of arrangement the transfer and vesting of Products Division of MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly, working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

7. The Company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghat from Patiram," (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs.1,517 lakhs towards receivable and Rs.1,133 lakhs on account of deposit against Performance Guarantee. Elsamex S.A. moved to arbitration and had claimed an amount of Rs.7,334 lakhs including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitral Board in their meeting held on October 25, 2010 has upheld Elsamex S A''s claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs. 3,535 lakhs is receivable by the Company. A claim has already been lodged with PWD. PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.

8. There are no significant subsequent events that would require adjustments or disclosures in the Financial Statements as on the Balance Sheet date.

9. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

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Mar 31, 2016

(c) Rights and restrictions attached to shares :

Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

Preference Shares: The Company has cumulative, non convertible redeemable preference shares of Rs 100 each at a coupon rate of 11.50% p.a.. Tenure of these Preference Shares is 7 years from the date of issue.

(d) The company does not have a holding company.

1 As per the Scheme of Arrangement as sanctioned by the Hon’ble High Court at Calcutta vide its Order dated 28th July 2009 which was filed with the Registrar of Companies, West Bengal, Kolkata on 1st September 2009 , for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) - the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of Jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Karnataka has been transferred to MSEL with effect from the appointed date, i.e. 01.04.2008 .As per the scheme of arrangement the transfer and vesting of Products Division of MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly, working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

2 The Company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in “West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghat from Patiram,” (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs. 1517 lacs towards receivable (included in Note No.18) and Rs.1133 lacs on account of deposit against Performance Guarantee (included in Note No.20). Elsamex S.A. moved to arbitration and had claimed an amount of Rs.7334 lacs including an additional claim on consequential losses as per guidelines of “Federation Internationale Des Ingenieurs-Conseils” (FIDIC). Arbitral Board in their meeting held on 25th October 2010 has upheldE Elsamex S A’s claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs.3535 lacs is receivable by the Company. A claim has already been lodged with PWD . PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.

3 MONEY RECEIVED AGAINST SHARE WARRANT

30 lacs convertible warrants were allotted to Williamson Magor & Company Limited, existing Promoters ofthe Company on 13.03.2015 against which the Company had received Rs.7.5 crores being the 25% upfront payment as per SEBI (Issue of Capital & Disclosure Requirement) Regulations, 2009. The Allotment Committee of the Company on 31.03.2016 has allotted 5 lacs equity shares on conversion of 5 lacs warrants to the said Williamson Magor & Co. Ltd. thereby reducing warrant application money by Rs. 1.25 cr representing 5 lakh warrants as on close of 31.03. 2016. The balance in Warrant Application Money Rs. 6.25 cr represents 25% application money for the 25 lakh warrants yet to be converted.

4 (a) Sale of MBE Coal & Minerals Technology, India Pvt. Ltd. (formerly Humboldt Wedag Minerals India Pvt. Ltd.)

During the year, the Company entered into an agreement with its subsidiary McNally Sayaji Engineering Ltd (MSEL) to sell the entire holding of 99.99% of MBE Coal Mineral Technology India Pvt. Ltd., to MSEL. The rationale behind this was to synergize the business of manufacturing products required in coal and mineral beneficiation turnkey project engineering. Subsequently, on October 23, 2015, the Board of Directors of both the Companies have approved of the sale and purchase of MBE Coal and Mineral Technology India Pvt. Ltd., at a consideration of Rs. 27 crores.

(b) Creation of Joint Venture EMC MBE Contracting Company LLC in Oman

The Company entered into a joint venture agreement on September2, 2015 with EMC Limited in a participation ratio of 50:50 and incorporated a Limited Liability Partnership Company under the name EMC MBE Contracting Company LLC in Oman. The Board of Directors of the Company had adopted the resolution towards formation of this joint venture company at its meeting held on August 13, 2015. Thereafter, investment of Rs. 152.31 lacs was made in the said LLC in Oman on December 11, 2015.

5 PROVISION FOR ONEROUS CONTRACTS

The Company is engaged in the business of executing projects on turnkey basis. Progress in some such contracts had suffered for various reasons and mostly beyond the control of the Company. Against these contracts, the Company as a measure of abundant precaution decided to make an omnibus provision of Rs. 75 Crores in 2013-14 to take care of any future losses that may arise. During the years 2014-15 and 2015-16 expenses amounting to Rs. 61 and Rs. 14 crores respectively have been incurred on these projects. Consequently, the respective project costs have increased and provision on onerous contract written back.

(ii) Sale of equipments and contract revenue as reported in this accounts is in proportion to the actual costs incurred on such contracts to their estimated cost. Here costs represent actual costs incurred inclusive of future losses based on estimates of future costs of all on going projects made by the engineers of the company and such estimates verified independently and certified by a Chartered Engineer. Unbilled revenue represents such contract sales values less actual billing done on the basis of costs incurred.

(iii) The company has made provision, as required under Accounting Standards, for material foreseeable losses on long term contracts.

C The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investment of funds during the estimated term of the obligation..

D The fair value of plan asset have been segregated between the Company and the erstwhile product division of MBECL now a part of McNally Sayaji Engineering Limited on the basis of the present value of the obligations as at the end of the year.

E Provident Fund

Provident fund for certain eligible employees is managed by the Company through the “McNally Bharat Employees Provident Fund” in line with the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of their separation from the company or retirement, whichever is earlier. The benefits vest immediately on rendering of the services by the employee. The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employers established provident funds, which require interest shortfalls to be compensated are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation and there is no additional liability as at 31st March, 2016, in respect of interest rate guarantee . The Company has contributed amount of Rs. 412.88 Lacs towards Provident Fund during the year 2015-16 (2014 15 Rs. 473.42 Lacs)

6 The Board of McNally Bharat Engineering Co. Ltd., along with the respective Boards of EMC Ltd. McNally Sayaji Engineering Ltd and Kilburn Engineering Ltd in their meetings held on March 31, 2016 have decided to amalgamate all the companies into Kilburn Engineering Ltd.

The new merged entity under the scheme shall be renamed as McNally Bharat Engineering Limited and shall emerge as total Engineering Solution Provider.

The merger have been decided to achieve 1)Lesser susceptibility to economic downturn and business slump to be derived from consolidation entities and diversification of expertise under single entity, 2) combining resources to attain economies of scale, 3) increased efficiency by eliminating duplication of costs and creating common pool of resources, 4) increasing productivity through streamlining of resources and focus, 5) attaining critical size required for prequalification for bidding in large infrastructure projects, 6) create a large asset pool and increase balance sheet size to pool cash flow and improving capital raising prospect.

The required application for permission have already filed with Competition Commission of India and relevant stock exchanges. Respective secured lenders have in-principle agreed to support the scheme in the consortium meetings called by all the companies and formal application for no objection from each of the secured lenders have been made.

The scheme will be filed to the honorable High Court of Calcutta on receipt of approval from stock exchanges expected in middle of June 2016

7 SEGMENT REPORTING

The Company has considered the business segment as the primary reporting segment on the basis that the risk and returns of the Company is primarily determined by the nature of activities. There is no geographical segment.

The business segment have been identified on the basis of the nature of activity the risks and returns, internal organization and management structure and the internal performance reporting systems.

The business segment comprises of the following:

(i) Sale of Steel-Trading.

(ii) Construction Contracts.

8 Previous year’s figures have been rearranged and / or regrouped wherever necessary to make them comparable with that of current year. Signatories to notes 1 to 52

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Mar 31, 2015

1. As per the Scheme of Arrangement as sanctioned by the Hon'ble High Court at Calcutta vide its Order dated 28th July 2009 which was filed with the Registrar of Companies, West Bengal, Kolkata on 1st September 2009 , for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) - the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of Jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Kamataka has been transferred to MSEL with effect from the appointed date, i.e. 01.04.2008 .As per the scheme of arrangement the transfer and vesting of Products Division of MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly, working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

2. The Company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghat from Patiram," (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs. 1517 lacs towards receivable (included in Note No. 19) and Rs.1133 lacs on account of deposit against Performance Guarantee (included in Note No.21). Elsamex S.A. moved to arbitration and had claimed an amount of Rs.7334 lacs including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitral Board in their meeting held on 25th October 2010 has upheld Elsamex S As claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs.3535 lacs is receivable by the Company. A claim has already been lodged with PWD. PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.

3. RELATED PARTY DISCLOSURES

Related party disclosures as required by Accounting Standard 18 on "Related Party Disclosures" are given below: Relationships

(a) Subsidiaries of the Company:

(i) MBE Coal & Minerals Technology, India Pvt. Ltd. (formerly Humboldt Wedag Minerals India Pvt. Ltd.)

(ii) McNally Sayaji Engineering Limited ( MSEL)

(iii) McNally Bharat Equipments Limited (MBEL)

(iv) McNally Bharat Infrastructure Limited (MBIL)

(v) MBE Mineral Technologies Pte Limited (formerly MBE Holdings Pte Limited)

(vi) MBE Minerals Zambia Ltd

(vii) McNally Bharat Engineering (SA) Proprietary Ltd

(b) Subsidiaries of MBE Mineral Technologies Pte Limited : (i) MBE EWB Technologies Kft

(ii) MBE Cologne Engineering Gmbh*

(c) Associates of MBE Mineral Technologies Pte Limited : (i) MBE Coal & Minerals Technologies GmbH**

(d) Subsidiaries of MBE Coal & Minerals Technologies GmbH : (i) MBE Mineral Processing Technology (Beijing) Co.Ltd . (ii) MBE Mineral Processing of Brazil LTDA

(iii) PT MBE Coal & Minerals Technology , Indonesia

(iv) MBE Minerals S.A Pty Limited.

(v) OOO MBE OUM, Russia

(vi) Coal & Mineral Technology Holding Gmbh, Germany

(e) Key Management Personnel:

(i) Mr. Deepak Khaitan - Executive Chairman***

(ii) Mr. Prasanta Kumar Chandra - Whole-time Director & COO

(iii) Mr. Prabir Ghosh- Whole-time Director & Group CFO

* 90% stake of the subsidiary has been sold on 30th April 2014. ** 70% stake of the subsidiary has been sold on 24th March 2015. *** Expired on 9th March 2015

4. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investment of funds during the estimated term of the obligation..

5. The fair value of plan asset have been segregated between the Company and the erstwhile product division of MBECL now a part of McNally Sayaji Engineering Limited on the basis of the present value of the obligations as at the end of the year.

6. Provident Fund

Provident fund for certain eligible employees is managed by the Company through the "McNally Bharat Employees Provident Fund" in line with the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of their separation from the company or retirement, whichever is earlier. The benefits vest immediately on rendering of the services by the employee. The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standard Board (ASB) states that benefits involving employers established provident funds, which require interest shortfalls to be compensated are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation and there is no additional liability as at 31st March, 2015, in respect of interest rate guarantee . The Company has contributed amount of Rs. 473.42 Lacs towards Provident Fund during the year 2014-15 (2013- 14 Rs. 485.03 Lacs)

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Mar 31, 2014

1 General Information

McNally Bharat Engineering Company Ltd (MBE) is a leading Engineering Turnkey Project Execution Company in India. The Company''s shares are listed on National Stock Exchange and Bombay Stock Exchange.

2 As per the Scheme of Arrangement as sanctioned by the Hon''ble High Court at Calcutta vide its Order dated 28th July 2009 which was filed with the Registrar of Companies, West Bengal, Kolkata on 1st September 2009, for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of Jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Kamataka has been transferred to MSEL with effect from the appointed date, i.e. 01.04.2008 .As per the scheme of arrangement the transfer and vesting of Products Division of the MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

3 There are no dues payable to Micro enterprises and Small enterprises on the basis of information available with the company regarding Micro and Small Enterprises under Micro, Small and Medium Enterprises Development Act, 2006.

4 The company had entered in September 2003 a joint venture agreement with Elsamex S.A where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghat from Patiram," (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs. 1517 lacs towards receivable (included in Note No. 19) and Rs.1133 lacs on account of deposit against Performance Guarantee (included in Note No.21). Elsamex S.A. moved to arbitration and had claimed an amount of Rs.7334 lacs including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitral Board in their meeting held on 25th October 2010 has upheld Elsamex S As claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs.3535 lacs is receivable by the company. A claim has already been lodged with PWD PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.



(All figures in Rs. Lacs, unless otherwise stated)

As at March As at March 31,2014 31,2013

5 CONTINGENT LIABILITIES

(a) Claims against the company not acknowledged as debt 100 100

(b) Other money for which the Company is contingently liable:

(i) Excise Duty matters pending in appeal related to 130 130 issues of applicability and classification

(ii) Sales Tax/VAT matters pending in appeal relating to disputes 957 922 regarding assessable value and exemptions claimed

(iii) Service Tax Matters pending in appeal relating to issues of applicability 27 21

(iv) Income Tax Matters pending in appeal relating to disputes regarding 1,340 - the taxable value and the deductions claimed

(v) Corporate guarantees given in favour of Subsidiary Companies 12,997 32,912

(vi) Other guarantees given 1,732 3,200

(vii) Standby letter of credit 3,252 1,670

(viii) Liquidated damages relating to contract sales Amount not readily Amount not readily ascertainable ascertainable

The probable cash outflow in respect of the above matters is not determinable at this stage

6 PROVISION FOR ONEROUS CONTRACTS

The Company is engaged in the business of executing projects on turnkey basis. Progress in some such contracts have suffered for various reasons and mostly beyond the control of the Company. Against these contracts which are now being considered as onerous in nature, the Company as a measure of abundant precaution has decided to make an omnibus provision of Rs. 75 Crores to take care of any future losses that may arise.

7 RELATED PARTY DISCLOSURES

Related party disclosures as required by Accounting Standard 18 on "Related Party Disclosures" are given below:

Relationships

(a) Subsidiaries of the Company:

(i) MBE Coal & Minerals Technologies, India Pvt. Ltd. (formerly Humboldt Wedag Minerals India Pvt. Ltd.)

(ii) McNally Sayaji Engineering Limited ( MSEL)

(iii) McNally Bharat Equipments Limited (MBEL)

(iv) McNally Bharat Infrastructure Limited (MBIL)

(v) MBE Mineral Technologies Pte Limited (formerly MBE Holdings Pte Limited)

(vi) MBE Minerals Zambia Ltd

(vii) McNally Bharat Engineering (SA) Proprietary Ltd

(b) Subsidiaries of MBE Mineral Technologies Pte Limited : (i) MBE Coal & Minerals Technology GmbH

(ii) MBE Cologne Engineering GmbH (iii) MBE EWB Technologies Kft

(c) Subsidiaries of MBE Coal & Minerals Technology GmbH : (i) MBE Mineral Processing Technology (Beijing) Co.Ltd . (ii) MBE Mineral Processing of Brazil LTDA

(iii) PT MBE Coal & Minerals Technology, Indonesia

(iv) MBE Minerals S.A Pty Limited.

(v) OOO MBE OUM, Russia

(vi) Coal & Mineral Technology Holding Gmbh, Germany

(d) Key Management Personnel:

(i) Mr. Deepak Khaitan - Executive Chairman

(ii) Mr. Prasanta Kumar Chandra - Whole-time Director & COO

(iii) Mr. Prabir Ghosh- Whole-time Director & Group CFO

8 LEASES

As a Lessee

The company has significant operating leases for premises. These lease arrangements include both cancellable and non-cancellable leases. Most of the leases are renewable for further period on mutually agreeable term. The aggregate lease rentals payable are charged as Rent under Note No. 28. With respect to non- cancellable operating leases, the future minimum lease payments are as follows:

Not later than one year

9 A. GRATUITY (FUNDED)

The Company operates a gratuity plan through the "McNally Bharat Executive Staff Gratuity Fund". Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.

10 Change in the estimate of contract revenue or contract costs have an effect on the current period and/or subsequent periods. It is impracticable to quantify the impact of such change in estimate.

11 RESEARCH AND DEVELOPMENT (R&D) EXPENDITURE

Expenditure on R & D - In pursuit of R & D endeavors the company is continuously incurring R&D expenditure both on Capital and Revenue, which has not been separately reflected but is being shown as part of regular heads of accounts in fixed assets and in Statement of Profit and Loss respectively. Accordingly R&D revenue expenditure incurred during the year debited to various account heads is Rs. 143.17 Lacs (2012-13: Rs 230.32 Lacs) and on account of capital expenditure is Rs 18.12 Lacs (2012-13: Rs. 101.63 Lacs).

12 The company has only one "Business segment" and one "Geographical segment" as defined in Accounting Standard -17 on "Segment Reporting".

13 Previous year''s figures have been rearranged and / or regrouped wherever necessary to make them comparable with that of current year.

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Mar 31, 2013

1 General Information

McNally Bharat Engineering Company Ltd (MBE) is a leading Engineering Turnkey Project Execution Company in India. The Company''s shares are listed on National Stock Exchange and Bombay Stock Exchange.

2 As per the Scheme of Arrangement as sanctioned by the Hon''ble High Court at Calcutta vide its Order dated 28th July, 2009, which was filed with the Registrar of Companies, West Bengal, Kolkata on 1st September 2009, for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of Jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Karnataka has been transferred to MSEL with effect from the appointed date, i.e. 01.04.2008 .As per the scheme of arrangement the transfer and vesting of Products Division of the MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly, working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

3 There are no dues payable to Micro enterprises and Small enterprises on the basis of information available with the company regarding Micro and Small Enterprises under Micro, Small and Medium Enterprises Development Act, 2006.

4 The company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghatfrom Patiram," (the project). However, consequent to considerable delay in execution of the project, the Public Works Department of Government of West Bengal (PWD) had unilaterally terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs. 1517 lacs towards receivable (included in Note No.19) and Rs.1133 lacs on account of deposit against Performance Guarantee (included in Note No.21). Elsamex S.A. moved to arbitration and had claimed an amount of Rs.7334 lacs including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitral Board in their meeting held on 25th October 2010 has upheld Elsamex S As claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs.3535 lacs is receivable by the company. A claim has already been lodged with PWD . PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.

(All figures in Rs. Lacs, unless otherwise stated)

As at As at March 31, 2013 March 31, 2012

5 CONTINGENT LIABILITIES

(a) Claims against the company not acknowledged as debt 100 100

(b) Other money for which the Company is contingently liable:

(i) Excise Duty matters pending in appeal related to issues 130 130 of applicability and classification

(ii) Sales Tax/VAT matters pending in appeal relating to disputes 922 944 regarding assessable value and exemptions claimed

(iii) Service Tax Matters pending in appeal relating to issues of applicability 21 72

(iv) Corporate guarantees given in favour of Subsidiary Companies 32,912 29,070

(v) Other guarantees given 3,200 3,200

(vi)Standby letter of credit 1,670 4,860

(vii) Liquidated damages relating to contract sales Amount not Amount not readily readily ascertainable ascertainable

The probable cash outflow in respect of the above matters is not determinable at this stage.

6 RELATED PARTY DISCLOSURES

Related party disclosures as required by Accounting Standard 18 on Related Party Disclosures are given below:

Relationships

(a) Subsidiaries of the Company:

(i) MBE Coal & Minerals Technologies India Pvt. Ltd. (formerly Humbolt Wedag Minerals India Pvt. Ltd.)

(ii) McNally Sayaji Engineering Limited (MSEL)

(iii) McNally Bharat Equipments Limited (MBEL)

(iv) McNally Bharat Infrastructure Limited (MBIL)

(v) MBE Mineral Technologies Pte Limited (formerly MBE Holdings Pte Limited)

(vi) MBE Minerals Zambia Ltd

(vii) McNally Bharat Engineering (SA) Proprietary Ltd

(b) Subsidiaries of MBE Mineral Technologies Pte Limited (i) MBE Coal & Minerals Technologies Gmbh

(ii) MBE Cologne Engineering Gmbh (iii) MBEEWBTechnologiaiKft

(c) Associate of MBE Mineral Technologies Pte Limited (i) Hayward Tyler Group Pic.

(d) Subsidiaries of MBE Coal & Mineral Technology GmbH

(i) MBE Mineral Processing Technology (Beijing) Co.Ltd .

(ii) MBE Mineral Processing of Brazil LTDA

(iii) PT MBE Coal & Minerals Technology, Indonesia

(iv) MBE Minerals SAPty Limited.

(v) OOO MBE OUM, Russia

(vi) Coal & Mineral Technology Holding Gmbh, Germany

(e) Key Management Personnel

(i) Mr. Deepak Khaitan - Executive Chairman

(ii) Mr. Prasanta Kumar Chandra - Whole-time Director & COO

(iii) Mr. Prabir Ghosh - Whole-time Director & Group CFO

7 Research and Development (R&D) Expenditure

Expenditure on R & D - In pursuit of R & D endeavors the company is continuously incurring R&D expenditure both on Capital and Revenue which has not been separately reflected but is being shown as part of regular heads of accounts in fixed assets and in Statement of Profit and Loss respectively. Accordingly R&D revenue expenditure incurred during the year debited to various account heads is Rs. 230.32 Lacs (2011-12: Rs 222.53 Lacs) and on account of capital expenditure is Rs 101.63 Lacs (2011-12: Rs. 179.55 Lacs)

8 The company has only one "Business segment" and one "Geographical segment" as defined in Accounting Standard-17 on "Segment Reporting".

9 Previous year''s figures have been rearranged and / or regrouped wherever necessary to make them comparable with that of current year.

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Mar 31, 2012

1 General Information

McNally Bharat Engineering Company Ltd (MBE) is a leading Engineering Turnkey Project Execution Company in India. The Company's shares are listed on National Stock Exchange and Bombay Stock Exchange.

2 As per the Scheme of Arrangement as sanctioned bythe Hon'ble High Court at Calcutta vide its Order dated 28th July 2009 which was filed with the Registrar of Companies, West Bengal, Kolkata on 1st September 2009, for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of Jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Karnataka has been transferred to MSEL with effect from the appointed date, i.e. 01.04.2008 .As per the scheme of arrangement the transfer and vesting of Products Division of the MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly working capital demand loans, cash credit facilities, term loans and other non fund based facilities ofthe Company are secured by assets which include those of the Product Division of MSEL.

3 There are no dues payable to Micro enterprises and Small enterprises on the basis of information available with the company regarding Micro and Small Enterprises under Micro, Small and Medium Enterprises DevelopmentAct, 2006.

4 The company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section ofSH 10 with a link to Balurghat from Patiram, " (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had unilaterallyterminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of encumbrance free land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs. 1517 lacs towards receivable (included in Note No.19) and Rs.1133 lacs on account of deposit against Performance Guarantee (included in Note No.21). Elsamex S.A. moved to arbitration and had claimed an amount of Rs.7334 lacs including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitral Board in their meeting held on 25th October 2010 has upheld Elsamex S.A's claim and has given award in favour of Elsamex S A. Under the award, a total amount of Rs.3535 lacs is receivable bythe company. A claim has already been lodged with PWD . PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.

(All figures in Rs. Lacs, unless otherwise stated)

As at As at March 31, 2012 March 31,2011

5 Contingent Liabilities

(a) Claims against the company not acknowledged as debt 100 100

(b) Other money for which the Company is contingently liable:

(i) Excise Duty matters pending in appeal related to 130 129 issues of applicability and classification

(ii) Sales Tax/VAT matters pending in appeal relating to disputes 944 980 regarding assessablevalue and exemptions claimed

(iii) Service Tax Matters pending in appeal relating 72 3,004 to issues of applicability

(iv) Corporate guarantees given in favour of Subsidiary Companies 29,070 28,814

(v) Other guarantees given 3,200 3,200

(vi) Standby letter of credit 4,860 4,236

(vii) Liquidated damages relating to contract sales Amount not readily Amount not readily ascertainable ascertainable

The probable cash outflow in respect of the above matters is not determinable at this stage

6 Related party disclosures

Related party disclosures as required by Accounting Standard 18 on Related Party Disclosures are given below: Relationships

(a) Subsidiaries of the Company :

(i) MBE Coal & Minerals Technologies India Pvt. Ltd. (formerly Humbolt Wedag Minerals India Pvt. Ltd.)

(ii) McNallySayaji Engineering Limited ( MSEL )

(iii) McNally Bharat Equipments Limited (MBEL)

(iv) McNally Bharat Infrastructure Limited (MBIL)

(v) MBE Mineral Technologies Pte Limited (formerly MBE Holdings Pte Limited)

(vi) MBE Minerals Zambia Ltd

(b) Subsidiaries of MBE Mineral Technologies Pte Limited

(i) MBE Coal & Minerals Technologies GmbH

(ii) EWB Kornyezetvedelmi Limited

(iii) MBE Cologne Engineering Gmbh

(iv) MBE Minerals ( S.A.) (Proprietory) Limited Subsidiaries of MBE Coal & Mineral Technologies GmbH:

(v) MBE Mineral Processing Technology (Beijing) Co.Ltd .

(vi) MBE Mineral Processing of Brazil LTDA

(vii) PT MBE Coal & Minerals Technology, Indonesia (c ) Key Management Personnel :

(i) Mr. Deepak Khaitan - Executive Chairman

(ii) Mr. Prasanta Kumar Chandra - Whole-time Director & COO

(iii) Mr. Prabir Ghosh - Whole-time Director & Group CFO

7 Change in the estimate of contract revenue or contract costs have an effect on the current period and/or subsequent periods. It is impracticable to quantify the impact of such change in estimate.

8 Research and Development (R&D) Expenditure

Expenditure onR&D - In pursuit ofR & D endeavors the company is continuously incurring R&D expenditure both on Capital and Revenue which has not been separately reflected but is being shown as part of regular heads of accounts in fixed assets and in Statement of Profit and Loss respectively. Accordingly R&D revenue expenditure incurred during the year debited to various account heads is Rs. 222.53 Lacs (2010-11: Rs 286.62 Lacs) and on account of capital expenditure is Rs 179.55 Lacs (2010-11: Rs. 107.91 Lacs)

9 The company has only one "Business segment" and one "Geographical segment" as defined in Accounting Standard -17on "Segment Reporting".

10 The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

---

Mar 31, 2011

1. As per the Scheme of Arrangement as sanctioned by the Hon'ble High Court at Calcutta vide its Order dated 28th July 2009 which was filed with the Registrar of Companies, West Bengal, Kolkata on 1st September 2009 , for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Kamataka has been transferred to MSEL with effect from the appointed date, i.e. 01.04.2008. As per the scheme of arrangement the transfer and vesting of Products Division of the MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing charges on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

2. The company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghatfrom Patiram," (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs.15,16,90,568 towards receivable and Rs.11,33,09,901 on account of deposit against Performance Guarantee. Elsamex S.A. moved to arbitration and had claimed an amount of Rs.73,34,03,024 including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitral Board in their meeting held on 25th October 2010 has upheld Elsamex S.A.'s claim and has given favourable award in favour of Elsamex S.A. Under the award, a total amount of Rs. 35-35 crores is receivable by the company. A claim has already been lodged with PWD. PWD has preferred to challenge the verdict of the Arbitrators and has appealed to the High Court for a stay in the matter of payment of award money.

3. There are no dues payable to Micro enterprises and Small enterprises on the basis of information available with the Company regarding Micro and Small Enterprise under Micro, Small and Medium Enterprises Development Act, 2006.

4. The Company has leasing arrangements in respect of operating leases for premises (residential, office, etc.). These leasing arrangements which are not non-cancellable are for a period of 3 years, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule 16.

Notes:

(a) The estimates of future salary increases, considered in actuarial valuations, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investment of funds during the estimated term of the obligation.

(b) The fair value of plan asset have been segregated between the company and the erstwhile product division of MBECL now a part of McNally Sayaji Engineering Limited on the basis of the present value of the obligations as at the end of the year.

(c) Amount recognized as an expense:

(i) Contribution to Salaries, wages, bonus include charge on account of Leave Enachment Rs.26,030,114/- (2009-10-Rs. 19,925,293/-).

(ii) Contribution to Provident and other Funds includes charge on account of Gratuity Rs.17,809,426/- (2009-10-Rs. 13,778,311).

(iii) Contribution to Workmen and staff welfare includes charge on account of Long Service Award of Rs. 111,921/- (2009- 10-Rs. 271,692/-) Sick Leave of Rs. 5,968,034/- (2009-10-Rs. 10,369,023/-) and on account of post Retriement Medical Benefit Rs. (72,130/-) (2009-10- Rs. 194,885/-).

(iv) Contribution to provident and other funds in Schedule 16 includes Rs. 36,090,932/- (2009-10 Rs. 37,515,218/-) towards contribution to Defined Contribution plans viz. Provident Fund, Pension Fund and Superannuation Fund.

5. Related party disclosures as required by Accounting Standard 18 on Related Party Disclosures are as given below:

Relationships

a) Subsidiaries of the Company

(i) EWB Kornyezetvedelmi Limited

(ii) McNally Sayaji Engineering Limited (MSEL)

(iii) McNally Bharat Equipments Limited (MBEL)

(iv) McNally Bharat Infrastructure Limited (MBIL)

(v) MBE Mineral Technologies Pte Limited (formerly MBE Holdings Pte Limited)

(vi) MBE Minerals Zambia Ltd (w.e.f 21.07.10)

b) Subsidiary ofMBE Mineral Technologies Pte Limited

(i) MBE Coal & Minerals Technology Gmbh

(ii) MBE Cologne Engineering Gmbh

(iii) MBE Minerals (S.A.) (Proprietory) Limited

(iv) McNally Humbolt Wedag Minerals India (Private) Limited. [formerly HumboltWedag Minerals India (Private) Limited]

Subsidiaries of MBE Coal & Mineral Technologies GmbH

(v) MBE Mineral Processing Technology (Beijing) Co. Ltd

(iv) MBE Mineral Processing of Brazil LTDA

c) Key Management Personnel:

Mr. Prasanta Kumar Chandra - Wholetime Director & COO (14.02.11 - 31.03.11)

Mr. Srinivash Singh - Managing Director (01.04.10 -17.06.10)

6. Pursuant to the Announcement on Accounting for derivatives issued by the Institute of Chartered Accountants of India in March , 2008 , the company has accounted for during the year net loss amounting to Rs 3,31,00,641 (31.3.10-52,826,056) in respect of outstanding derivative contracts at the balance sheet date by marking them to market as indicated in Note 1 (viii) above. The aforesaid mark to market loss was included in "Gain on Exchange Fluctuation" in Schedule 14 to accounts .

7. Expenditure on R & D - In pursuit of R & D endeavors the company is continuously incurring R&D expenditure both on Capital and Revenue which has not been separately reflected but is being shown as part of regular heads of accounts in fixed assets and in Profit and Loss account respectively. Accordingly R & D revenue expenditure incurred during the year debited to various account heads is Rs. 28,662,473 (2009-10: Rs. 86,77,129) and on account of capital expenditure is Rs. 10,790,594 (2009-10: Rs. Nil).

8. Previous years figures have been regrouped or rearranged where considered necessary Signatories to Schedule 1 to 19

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Mar 31, 2010

1. As per the Scheme of Arrangement as sanctioned by the Honble High Court at Calcutta vide its Order dated 28th July 2009 which was filed with the Registrar of Companies, West Bengal, Kolkata on 1 st September 2009, for reconstruction of McNally Bharat Engineering Company Limited (MBECL) and its subsidiary viz McNally Sayaji Engineering Ltd (MSEL) the Products Division of MBECL engaged in the business of manufacture and/or procuring equipments for various engineering and infrastructure projects and having its units at Kumardhubi, in the State of jharkhand and Asansol, in the State of West Bengal and Bangalore, in the State of Karnataka has been transferred to MSEL with effect from the appointed date, i.e. 01 04.2008. As per the scheme of arrangement the transfer and vesting of Products Division of the MBECL to MSEL shall be subject to the existing charges, mortgages and encumbrances, if any, over the assets or any part thereof, provided however, that such charges, mortgages and/or encumbrances shall be confined only to the assets of MBECL or part thereof on or over which they are subsisting on transfer to and vesting of such assets in MSEL and no such charges, mortgages and/ or encumbrances shall extend over or apply to any other asset(s) of MSEL. Thus the existing char|es on the assets of the Products Division for facilities enjoyed by MBECL will continue and vice versa. Accordingly working capital demand loans, cash credit facilities, term loans and other non fund based facilities of the Company are secured by assets which include those of the Product Division of MSEL.

2. The company had entered in September 2003 a joint venture agreement with Elsamex S.A. where officially it was appointed as a subcontractor in "West Bengal Corridor Development Project - Improvement of Gazole Hilli Section of SH 10 with a link to Balurghat from Patiram," (the project). However consequent to considerable delay in execution of the project the Public Works Department of Government of West Bengal (PWD) had terminated the contract in January 2006. The company and Elsamex S.A. felt that such delay in execution was due to the inability of PWD to hand over the stretch of land for widening of road and non-availability of construction drawings on time by PWD. The company has a legitimate claim of Rs.15,16,90,568 towards receivable and Rs.11,33,09,901 on account of deposit against Performance Guarantee. Elsamex S.A. has already moved to arbitration and has claimed an amount of Rs.73,34,03,024 including an additional claim on consequential losses as per guidelines of "Federation Internationale Des Ingenieurs-Conseils" (FIDIC). Arbitration proceedings are almost complete and the company is confident in recovering at least an amount not less than the recoverable shown in its books and considers that no provision towards such amounts recoverable is necessary at this stage.

3. There are no dues payable to Micro enterprises and Small enterprises on the basis of information available with the Company regarding Micro and Small Enterprise under Micro, Small and Medium Enterprises Development Act, 2006.

4. The Company has leasing arrangements in respect of operating leases for premises (residential, office, etc.). These leasing arrangements which are not non-cancellable are for a period of 3 years, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule 17.

5. Related party disclosures as required by Accounting Standard 1 8 on Related Party Disclosures are as given below: Relationships

a) Subsidiaries of the Company

(i) EWB Kornyezetvedelmi Limited

(ii) McNally Sayaji Engineering Limited (MSEL)

(iii) McNally Bharat Equipments Limited (MBEL)

(iv) McNally Bharat Infrastructure Limited (MBIL)

(v) MBE Holdings Pte Limited

b) Subsidiary of MBE Holdings Pte Limited

(i) MBE Coal & Minerals Technology Gmbh

(ii) MBE Cologne Engineering Gmbh

(iii) MBE Minerals ( S.A.) Proprietory Limited

(iv) Humbolt Wedag Minerals India ( Private) Limited

8. Pursuant to the Announcement on Accounting for derivatives issued by the Institute of Chartered Accountants of India in March, 2008, the company has accounted for during the year net loss amounting to Rs 52,826,056 (31.3.09-Nil) in respect of outstanding derivative contracts at the balance sheet date by marking them to market as indicated in Note 1 (viii) above. The aforesaid mark to market loss was included in "Loss on Exchange Fluctuation" in schedule 17 to accounts.

9. During the year the company has set up a wholly owned subsidiary company, MBE Holdings Pte Limited in Singapore. MBE Holdings Pte Limited has in turn acquired the Coal and Mineral Technology division of KHD Humboldt Wedag GmbH. The Coal and Mineral Technology division operates through four legal entites which are subsidiaries of MBE Holdings Pte Limited viz MBE Coal and Mineral Technologies GmbH, MBE Calogne Engineering GmbH, MBE Minerals SA Pty Ltd. and Humboldt Wedag Minerals India Private Limited.

10. Previous years figures have been regrouped or rearranged where considered necessary.