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44 ok¡ okf"kZd izfrosnu44th Annual Report

esdkWu fyfeVsMMECON LIMITED

2016-17

Shri Atul Bhatt, CMD MECON Ltd. welcoming Hon'ble Shri Chaudhary Birender Singh, Union Minister of Steel at MECON.

Hon'ble Shri Vishnudeo Sai, Union Minister of State for Steel alongwith Ms Urvilla Khati, Joint Secretary, Ministry of Steel and Shri Atul Bhatt, CMD, MECON Ltd.during SMART INDIA HACKATHON 2017 at Indore

Hon'ble Shri Chaudhary Birender Singh, Union Minister of Steel along with Dr. Aruna Sharma, Secretary, Ministry of Steel and Shri Atul Bhatt, CMD MECON Ltd. during India Steel Exhibition at Mumbai.

Hon'ble Shri Chaudhary Birender Singh, Union Minister of Steel along with Shri Atul Bhatt, CMD MECON Ltd. and Shri Anupam Prakash, Director, Ministry of Steel, during launching of ANGARA 7.1 and LOHA 4250 at MECON, Ranchi.

VISION

MISSION

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

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

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

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

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

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

Board of Directors

Shri Atul BhattCMD

(w.e.f. 01.10.2016)

As on 21.09-2017

Shri P. K. SarangiDirector (Technical)(w.e.f. 01.01.2017)

Shri Goutam ChatterjeeDirector (Commercial)

(w.e.f. 20.03.2017)

Shri Syedain Abbasi, IASGovernment Director

Shri Sisir Kumar AppikatlaIndependent Director

Shri Saraswati Prasad, IASGovernment Director

(w.e.f. 08.02.2017)

MANAGEMENT DURING THE YEAR

CMD

Shri A. K. Tyagi, (upto 30.09.2016)

Shri Atul Bhatt (w.e.f. 01.10.2016)

WHOLE TIME DIRECTORS

Shri Subir Chattopadhyay, Director (Project) (upto 31.08.2017)

Shri Deepak Dutta, Director (Commercial) (upto 31.10.2016)

Shri S. R. Sengupta, Director (Technology) (upto 31.12.2016)

Shri A. P. Singh, Director (Engineering) (upto 31.12.2016)

Shri P. K. Sarangi, Director (Technical) (w.e.f. 01.01.2017)

Shri Goutam Chatterjee, Director (Commercial) (w.e.f. 20.03.2017)

GOVERNMENT DIRECTORS

Smt. Bharathi S. Sihag, IAS (upto 30.11.2016)

Shri Saraswati Prasad, IAS (w.e.f 08.02.2017)

Shri Syedain Abbasi, IAS

INDEPENDENT DIRECTOR

Shri Sisir Kumar Appikatla

REFERENCE INFORMATION

COMPANY SECRETARY

Shri Ravi Bambha

GENERAL MANAGER (FINANCE)

Shri R.H. Juneja

STATUTORY AUDITOR

M/s V. Rohatgi & Company,

Chartered Accountants,

1st Floor, Sarjana Building,1,

Main Road, Ranchi – 834001

Jharkhand

BANKERS

State Bank of India Bank of India

Union Bank of India IDBI Bank

Indian Overseas Bank Bank of Baroda

United Bank of India YES Bank

Andhra Bank HDFC Bank

Canara Bank Axis Bank

ICICI Bank IndusInd Bank

CONTENTSParticulars Page No.

Chairman’s Speech 6-10

Board Report 11-36

Extract of Annual Return in Form MGT - 9 37-44

Disclosure of particulars of contracts / arrangements with related parties 45

Details on CSR & Sustainability activities during 2016-17 46-63

Particulars with respect to Technology Absorption 64-65

Management Discussion & Analysis Report 66-74

Report on Corporate Governance 75-81

Statutory Auditor's Report for the Financial Year 2016-17 82-90

Comments of the Comptroller & Auditor General of India 91

Balance Sheet as at 31.03.2017 92

Profit & Loss Account for the year ended 31.03.2017 93

Cash Flow Statement for the year ended 31.03.2017 (Indirect Method) 94-95

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

96-136

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MECON Limited

CHAIRMAN’S SPEECH

Dear Fellow Shareholders,

I am delighted to welcome you all to the 44th Annual General Meeting of your Company. This is my first Annual General Meeting as the Chairman and Managing Director of your Company. I would like to reflect on the year gone by and share with you glimpses of the future direction of your Company. But before all that, I, with your permission take the Directors’ Report, audited annual accounts along with Independent Auditor’s Report and comments of the Comptroller and Auditor General of India thereon, which are already with you, as read

MECON – TAKING CHARGE

I take this opportunity to reminisce of the day I took over the reins of your Company – I was seized with the prospect of not only spearheading the wide spectrum of business activities of MECON from EPC/ Turnkey jobs to Project Consultancy in diversified sectors of Iron and Steel, Non-ferrous metals, Power, Oil & Gas and Infrastructure, but also to be a part of a Company whose legacy of technological and engineering excellence has contributed significantly to self reliance in

engineering consultancy and industrial growth of our nation.

Your Company has provided the technological impetus in virtually every venture of steel making in the country since the ‘60s and has played a stellar role in projects of national importance – be it the space programmes of ISRO - 2nd Launch Pad at Sriharikota, during a regime of technological denial, the Integrated Engine Testing Facility of IPRC, Mahendragiri, and Pay Load Assembly Building , Ahmedabad; Project Seabird Karwar Phase-I and now Phase-II for the Indian Navy, the CRGO Pilot Plant at NML for Ministry of Steel or the ambitious Urja Ganga Project of the Prime Minister - the list is long and commendable.

As someone who has not experienced growing up the ranks of MECON, the hugely varied nature of the Company’s business was indeed a revelation. I was faced with a lot of legacy issues and uncertainties looming in the minds of the employees. My focus is to transform the Company from within, make breakthrough improvements and radical changes through creating, communicating and embedding new approaches and empowering all to act on this vision.

The impact that disruptive technologies are having on market scenario around the world is creating new business opportunities – capitalizing on which requires focus on collaborations and embracing technology to reconfigure processes, procedures and boost efficiencies. We are in the process of articulating a business strategy to turnaround our Company and have set ourselves aggressive and ambitious targets which I strongly believe are achievable through adoption of tactical business models. I speak for the entire Board when I say that we are committed to ensure sustenance of growth momentum gained, through continuous evolution of our business strategy.

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44th Annual Report 2016-17

A house of engineering excellence ...aiming beyond

MECON - CONTRIBUTION TO NATION BUILDING

The start of my journey with MECON has been very encouraging, as evidenced by the performance during the last fiscal year, both in quantitative and qualitative terms. With focused drive and discipline, new initiatives are beginning to show tangible results.

During the just concluded fiscal year, the Company secured a record order booking of `1419 Crores (all time high in the history of the Company) of which more than `1300 Crores was booked in the second half of the year alone. With the metals sector under stress, Company’s intense focus on augmenting its non-metal sector business has met with considerable success and business worth ` 783 Crore has been secured from the diversified sectors of Infrastructure, Oil & Gas, Power, Defence and Space, which is 55% of total order booking.

Your Company has shouldered various responsibilities entrusted by Ministry of Steel, Govt. of India, wherein the Company has provided valuable technical inputs to contribute towards rapid National development on all fronts, which have a long term value, not only for the region or industry, but across several sectors and economy at large. Few assignments of National importance have been :

The National Steel Policy, wherein your Company provided inputs for its preparation. This policy aims at steering the industry to achieve its full potential, enhance steel production with focus on high end value added steel, while being globally competitive.

Vision Document of Ministry of Steel (MoS) : MECON provided various inputs and clarifications for preparation of this document.

With GoI’s thrust on Increasing Steel Demand, your Company is contributing

in implementation of Domestically Manufactured Iron and Steel Products (DMI&SP) Policy, providing preference to ‘Make in India’ over imported Iron & Steel.

Minimum Import Price (MIP) reports were prepared for various grades of stainless steel products and Aluminium products.

Your Company was entrusted by MoS in September 2016, for coordination of the activities of CPSEs under MoS in the world’s largest digital nation building initiative - Smart India Hackathon 2017 - a 36 hours non-stop digital programming competition for students of Technical Institutions, to provide sustainable innovative solutions to real time challenges/ problems faced by the industries. Diligent coordination by us, ensured the successful culmination of the mega event, organised from 1st to 2nd April 2017 at Indore, where 56 teams from engineering colleges across India participated. MoS lauded MECON for organizing, coordinating and smooth implementation of the event.

Your Company with its contribution directly impacting the nation, has passionately pursued its compelling vision to create a national Consultancy institution. In continued efforts towards this, the Company is privileged to be associated with GAIL, as Engineering Consultant, in implementation of Urja Ganga, the highly ambitious project of our Prime Minister. This gas pipeline project aims to provide piped cooking (PNG) gas to residents of the eastern region of the country and CNG gas for the vehicles as well as industries.

Today, your Company is a multi disciplinary force to reckon with, both in national and international arena, encompassing diversified areas of activities. Its growth has been steady, selective and firmly rooted in technology, to serve the nation’s multifarious requirements. A stepping stone

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MECON Limited

towards this has been the branding of MECON’s Coke Ovens and Blast Furnace: Hon’ble Minister of Steel during his visit to MECON on 21st December 2016, launched your Company’s indigenously designed 7 mt. tall 1 MTPA Coke Oven Battery ‘Ángara 7.1’ & 4250 m3 Blast Furnace ‘Loha 4250’. The Company took design development of such challenging technologies to contribute towards the ‘Make in India’ campaign, reduce India’s dependence on import in the field of Steel and build domestic expertise in areas of speciality in which indigenous skills were lacking or not up to international standards.

As a technologically driven company, we believe that investment in technology is imperative to sustainable growth of the company and that employees must engage in enhancement and reinforcement of technological skills and competencies. With the derived confidence of breaking into arenas of non-metal sectors your Company will continue way forward to greater heights by conquering the frontiers of engineering and technological excellence.

FINANCIAL PERFORMANCE

The last few years, in retrospect, have been extremely challenging for your Company due to adverse changes in business environment. Strategic initiatives have been taken to review several internal/operational issues including rationalization of manpower deployment, productivity augmentation plans, reduction in avoidable expenditure, increase in working hours, rationalization of various operational processes, development of norms/guidelines/time scales etc. Though the Company is still going through a financial turmoil, I am glad to inform that things have started looking up.

To give a coherent picture of our efforts and results achieved, a few figures and highlights are enumerated below :

(a) Comparative Financial Figures of 1st Half of 2016-17 vs 2nd Half of 2016-17

(` Crores)

Particular

2016-17

For the 1st half year ended 30.09.2016

For the 2nd half year ended 31.03.2017

Turnover 93.93 249.00

Total Income 127.00 279.98

Total Expenditure

205.87 289.25

PAT -78.65 -5.19

Order Booking 96.43 1322.25

The company was able to reduce its losses after tax from ` 78.65 Crores to ` 5.19 Crores by increasing its turnover by 165%.

(b) Comparative Financial Figures of FY 2015-16 against FY 2016-17 are as follows:

(` Crores)

Particular 2015-16 2016-17

Turnover 317.28 342.93

Total Income 399.87 406.98

Payment to subcontractors 94.33 79.85

Payment to subconsultants 53.31 33.61

Employee Benefits Expenses 310.77 291.78

Other Expenses and Provisions 107.81 76.70

Total Expenditure 574.58 495.12

Cash and Bank Balance 539.44 550.43

Order Booking 683.40 1,418.68

Highlights of performance are :

Improvement in Order booking by 107% over last year.

Reduction in Expenditure by 13.8% over last year.

Given the context of turbulent operating environment in the sector in which we

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operate, your company registered an 8% increase in turnover during the FY 2016-17 as compared to the FY 2015-16.

In comparison to our loss of ` 162 Crores in 2015-16, the loss of ` 84 Crores in 2016-17 was a reduction of almost 50%.

Dear Shareholders it gives me pleasure in informing you that since inception your Company has paid/provided cumulative Income tax to the exchequer amounting to ` 352.23 Crores and paid cumulative dividend on equity and preference (including tax) to the tune of ` 68.36 Crores.

PHYSICAL PERFORMANCE

It gives me immense pleasure in inform you that the fiscal year 2016-17 has been marked with a number of achievements. Notable among these are:

Few notable assignments completed successfully:

Coke Oven Battery #9, Universal Rail Mill (URM) & Bar & Rod Mill (BRM) of Bhilai Steel Plant, Skin Pass Mill (SPM) & Electrolytic Cleaning Line (ECL) of CRM-III of Bokaro Steel Plant, New Coal Handling Plant & RH Degasser of SMS-II of Rourkela Steel Plant were successfully commissioned.

The Study Report on Fixing of Minimum Import Price (MIP) of Aluminium & its products in the country, which was awarded to MECON by Aluminium Association of India (AAI), Mumbai is completed and submitted to AAI.

Significant progress has been made for City Gas Distribution Network at Bengaluru, for which MECON has been providing EPMC Services for GAIL Gas Ltd.

Successfully completed Design & Engineering services for the revolving dome for 2.5m diameter Telescope at Mount Abu, Rajasthan for ISRO, Bangaluru.

Few of the notable work orders secured for providing:

EPC services for setting-up of an External Coal Handling Plant Package at North Karanpura STPP (3 x 660 MW) for NTPC Limited, Noida.

Preparation of TEFR for setting up a Mini Steel Plant for Al Jazeera Steel Products Co. SAOG, Oman.

PMC services for Bokaro-Angul-Dhamra Pipeline Section along with Spurlines of Jagdishpur-Haldia-Bokaro-Dhamra Pipeline (JHBDPL) Project for GAIL (India) Ltd., Noida.

PMC services to execute Payload Fabrication & Testing Facility (PFTF) Building at 39 Acres New SAC Campus at Bopal, Ahmedabad ISRO, Ahmedabad.

ENVIRONMENT & SOCIAL CONTRIBUTION

Your Company’s Social and Sustainability initiatives are driven by the conviction that organizations play a significant role in contributing to build a better society. Evolving from your Company’s abiding vision to pursue sustainable and inclusive growth, the CSR strategies are primarily focused on education, healthcare, women empowerment, community development and upgrade of infrastructural facilities in the selected villages of Jharkhand. This multi- dimensional effort has transformed many a life and contributed towards a sustainable environment for future India.

MECON’s REAL ASSETS - HUMAN RESOURCE

Your Company is of the firm belief that the heart and soul of Company’s potential and success are the human resource and as such growth of the organization is linked to the development of its employees and equipping them with the right

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MECON Limited

competencies. Continual learning is essential to build this, which is why we make learning, from basic skills to industry-specific requirements, available to our employees. We understand that today’s business challenges present a new wave of organizational priorities and focus on trainings, encompassing Technical, Managerial and Soft skills.

Succession Planning is vital for organizational sustainability and we have commenced on development of the same to ensure smooth leadership transition at different levels. Transparent and regular communication facilitates synergy across levels, thereby building a strong and focussed organization. Towards this intent, I have had a number of interactions with MECONians at all levels. Their earnestness and wholehearted co-operation in embracing the changes brought about by our efforts of streamlining the company’s processes and procedures, further instills in me the confidence of realizing the strategic vision and business plan being articulated for the Company.

STEPS TOWARDS GOOD GOVERNANCE Your Company understands the importance of good corporate governance practices in its functioning.

Like the past years, this year also your Company scored an ‘Excellent’ rating in compliance to the Guidelines on Governance issued by the Government of India which in itself sets a record of bagging Excellent rating in each year right from the beginning. Best industrial practices, transparent financial dealings, e- tendering processes and smooth channel for information flow aids to good governance in the Company.

ACKNOWLEDGEMENT

Before I conclude, I would like to place on record my deepest appreciation for dedicated efforts of employees at all level all in support of my endeavor to bring the Company back on track of sustained growth. I also extend my sincere gratitude to the members of the Board for the richness of their counsel, supervision and commitment to the vision and values of the Company. I gratefully acknowledge the support extended to us by the Ministry of Steel, Govt. of India, various other Ministries and thank them for the confidence and trust bestowed upon the Company. Finally , a special word of thanks to you, our valued shareholders for your continued support and goodwill that is critical to the success of our company.

Thank you & Jai Hind.

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BOARD REPORTDear Members,

Your Directors have the pleasure in presenting 44th Annual Report on the operations of the Company and the Statements of Accounts for the Financial Year ended on 31st March, 2017.

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

Your Company has contributed significantly in major initiatives of Ministry of Steel having impact at national level such as:-

1. National Steel Policy (NSP-2017)

2. Domestically Manufactured Iron & Steel Products (DMI&SP) Policy

3. Minimum Import Price (MIP) of various grades of steel and aluminium

1.0 PERFORMANCE HIGHLIGHTS

It has been another year marked by subdued activities in company’s traditional and niche business areas resulting in unrelenting stress on top & bottom lines. The company has attempted to overcome the challenges by stepping up its efforts in new business opportunities coming out of governmental initiatives Power For All (PFA 24x7), NSP-2017. The company has significantly strengthened its position in its Oil & Gas business area. This coupled with stepped up efforts in other sectors has resulted in a healthy order booking by your company, thanks to concerted marketing efforts, strategic planning and business resolve of the employees & management collective. Nevertheless, relentless efforts and focus would be imperative to translate this order booking into tangible business values.

Major prestigious projects of national importance completed / under progress during the year include:

Metals Sector

Your company has successfully provided Detailed Engineering & Consultancy services including Designer’s Supervision during Erection, Testing and Hot trials for 4.2 Mtpa Crude Steel Expansion of SAIL/Rourkela Steel Plant and following are the major achievements:

New Coal Handling Plant (Package 091) commissioned on 12.07.2016 and Performance Guarantee held on 21.09.2016.

RH Degasser of SMS-II (Package 026B) has been successfully commissioned on 18.05.2016.

Your Company has been entrusted by SAIL/Rourkela Steel Plant for repair, restoration, rectification of Uptakes, Downcomer, Dust Catcher, Scrubber, Cast House and Top Structures of Blast Furnace No. # 4. The furnace was commissioned in the month of October, 2016.

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MECON Limited

Detailed Engineering & Consultancy services for 7.0 Mtpa Expansion Plan of SAIL/Bhilai Steel Plant have been provided by your company and following are the major achievements:

Installation of 4,060 m3 (Useful Volume) Blast Furnace No. # 8 is under completion phase. Heating up of Hot Blast Stove started in March, 2017.

Universal Rail Mill (URM) has been successfully commissioned & has started commercial production.

Bar & Rod Mill (BRM) initial trial run & commissioning has been successfully carried out in March, 2017.

Commissioning of Coke Oven Battery No. 9 of BSP, Bhilai has been successfully done on 30.03.2017.

Detailed Engineering & Consultancy services for 2.2 Mtpa Expansion Plan of SAIL/Durgapur Steel Plant have been provided by your company and following are the major achievements:

"Balance work for Debottlenecking of RMHP" has been successfully commissioned on 30.05.2016.

Your company has been entrusted by SAIL/Durgapur Steel Plant for carrying out Extended Category-II Capital Repair of Blast Furnace#4. Blast Furnace shutdown was taken on 03.03.2017. Job is under full swing and BF blowing-in has being done successfully.

Detailed Engineering & Consultancy services for installation of 1.2 Mtpa CRM-III Complex of SAIL/Bokaro Steel Plant have been provided by your company and following are the major achievements:

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Skin Pass Mill (SPM) in CRM-III complex has been successfully commissioned in October, 2016.

Electrolytic Cleaning Line (ECL) in CRM-III complex has been commissioned in March, 2017.

Server based telephone exchange (ECL) in CRM-III complex has been commissioned in February, 2017.

Detailed Engineering & Consultancy including Project Management Consultancy services for 2.5 Mtpa Expansion Plan of SAIL/IISCO Steel Plant, Burnpur have been provided by your company and the following have achieved Performance Guarantee parameters as per contract:

Sinter Plant (Down-draught off-strand cooling type) with 2 Machines, having 204

m2 sintering area, rated capacity 600 tph, in the month of June, 2016.

Blast Furnace No. # 5 (4,160 m3 Useful Volume), in the month of December, 2016.

Coal Pulverization & Injection System for 4,160 m3 Blast Furnace, in the month of December, 2016.

Hot Metal Handling System for 4,160 m3 Blast Furnace, in the month of October, 2016.

Detailed Engineering & Consultancy services including Project Management Consultancy services are being provided by your company for setting up of 3.0 Mtpa Integrated Steel Plant of NMDC Limited at Nagarnar. The project is under execution and packages like Coke Oven Battery No. 1, Sinter Plant, Blast Furnace and Oxygen Plant are in advanced stage of execution.

Consultancy services for installation of BOF#3 and CCM#4 along with associated equipment cum auxiliary & services in SMS-2 shop of RINL/Visakhaptnam Steel Plant, Visakhapatnam.

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MECON Limited

BOF#3 has been successfully commissioned on 07.11.2016.

SLR Metaliks Limited had entrusted the job for rendering Engineering & Consultancy services for Steel Melt Shop (including Billet caster) along with associated Utilities & Services. 0.3 Mtpa Steel Melt Shop consisting of 1x35T EoF, 1x35T LRF, 1x35T VD and Two Strand Billet Caster has been commissioned on 28.07.2016.

Jindal Steel & Power Limited (JSPL), Raigarh has entrusted your company to design Hydraulic Rocking Runner and Transfer Car System for movement of Ladles for their BF # 1 (686 m3 Useful Volume). The design, first of its kind in India is already developed and submitted to JSPL.

Srikalahasthi Pipes Limited (SPL), Chittoor has entrusted your company for providing Design, Engineering & Consultancy services for

upgradation of their Mini Blast Furnace along with supply of SGI Stave Coolers. All the jobs have been completed on schedule and the Blast Furnace was commissioned in September, 2016.

Tata Metaliks Limited (TML), Kharagpur has entrusted your company for providing Design, Engineering & Consultancy services for capacity enhancement of their Mini Blast Furnace along with design improvement of Hot Blast Stoves and installation of MECON’s in-house designed Cyclone. All the jobs were completed on schedule and the Blast Furnace has been successfully commissioned in March, 2017.

In order to meet the challenges of tomorrow posed by uncertain raw material qualities & sourcing, your company has fully developed the in-house design of a 1.2 Mtpa Pellet Plant. The In-House Design Development Document of 1.2 Mtpa Pellet Plant was launched by the Hon'ble Minister of Steel at our Ranchi office in September, 2016.

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Draft report was prepared and submitted in February, 2017 for Benchmarking Study of NMDC Limited, Hyderabad.

Draft report was prepared and submitted in January, 2017 for Benchmarking Study of MSTC Limited.

Draft report was prepared and submitted in December, 2016 for Benchmarking Study of MOIL Limited, Nagpur.

Non Ferrous Sector

The Public Sector aluminium company, viz. National Aluminium Company Ltd. (NALCO) had awarded consultancy job to your company for carrying out Pre-Feasibility Report (PFR) to set up a 4.0 Lac Tonnes /annum Greenfield Aluminium Smelter project in the State of Madhya Pradesh. The Final Report had been submitted to Client on 31st March 2017.

Earlier, NALCO had also awarded your Company for the preparation of TEFR for 0.5 Mtpa Alumina Refinery in Kutch Gujarat, which has been successfully completed and submitted on 21.02.2017.

The Aluminium Association of India (AAI), Mumbai had awarded your company with the preparation of Study Report on Fixing of Minimum Import Price (MIP) of Aluminium & its products in the country. The complete assessment report for fixing up the MIP values for primary aluminium as well as downstream products had been submitted to Client during end of December, 2016.

During the current year, Tata Steel Limited has entrusted your company to render Consultancy services for preparation of Detailed Project Report (DPR) for extraction of Nickel through a 1000 TPA Nickel Extraction – Demonstration Plant through hydrometallurgical processing of Sukinda Mines’s Chromite Overurden (COB) available at Bamnipal, Odisha. The DPR shall be based on a unique process developed by a

Canadian R & D institution through processing of Sukinda COB. The DPR is under preparation.

Your company carried out the Owner’s engineering services for preparation of budgetary cost estimation report for Zinc Ferrite Treatment Plant at Chanderiya, Rajasthan for Hindustan Zinc Ltd.

Adani Limited had entrusted your company for the preparation of Concept Study Report for proposed 4 Ltpa copper smelter complex based on imported copper concentrate at Mundra, Gujarat, Adani Ltd. The job has been completed during FY 16-17. Further the preparation of Bankable Feasibility Study assignment has been awarded to MECON during March, 2017.

Power Sector

Detailed Engineering and Consultancy services including Project Management services have been provided to NLC Tamil Nadu Power Limited (NTPL) for installation of 2x500 MW coal based Thermal Power Plant at Tuticorin. PG Test has been successfully completed for Unit 2.

Preparation of Road Map for providing 24x7 Power for All (PFA) in various States and UTs (total 9 nos.) of India was entrusted by Power Finance Corporation (PFC). Final reports for all the states/UTs have already been signed by respective state and Ministry of Power (MoP) and uploaded on the MoP site.

Detailed Engineering Consultancy services including designer supervision have been provided to SAIL/Rourkela Steel Plant for Power and Blowing Station, Turbo Blower Station and TRT has been successfully completed.

Detailed Engineering Consultancy services including designer supervision have been provided to SAIL/Durgapur Steel Plant for Durgapur Compressed Air Station and commissioning certificate has been issued to the contractor.

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MECON Limited

Final Techno Economic Feasibility Report has been submitted to Gallant Ispat limited, Gorakhpur for 100 TPD rolling mill project.

Final Detailed Project Report for Implementation of Zero Discharge System for Tenughat Vidyut Nigam Limited has been submitted.

Final Detailed Project Report for Mandira Small Hydro Electric Project has been submitted to Green Energy Development Corporation of Odisha Limited.

Detail Engineering and consultancy services have been provided to Visakhapatnam Steel Plant (RINL) for Power Plant in CO Battery No. 4 area Phase-II and has been successfully completed.

Engineering & Consultancy services have been provided to National Aluminum Company for additional coal handling system (Pkg A-02) at NALCO and has been successfully completed.

Final Technical Due diligence study report of Stage-I & Stage-II each of 2x270 MW units of Corporate Power Limited (CPL), Latehar, Jharkhand was to be carried out for Govt. of Jharkhand. The Due diligence report has been submitted to GoJ.

RLA Study, Uprating Study on Turbine, Generator, and other auxiliary on one unit of Moyar Power House was entrusted by Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) and is under final stage of completion.

Consultancy services for third party delay analysis of BTG and BOP works of Khaperkheda project (1x500 MW) was entrusted by Maharashtra State Power Generation Co. Limited and is under final stage of completion.

Consultancy Services for balance work & supply, change in specification and mandatory spares status for Koradi project (3x660 MW) was entrusted by Maharashtra State Power Generation Co. Limited and is under final stage of completion.

Total consultancy services for replacement of High Pressure Feed Water Pipeline of Power & Blowing Station of Bhilai Steel Plant is under final stage of completion.

Consultancy Services for Installation of 300t/h Boiler & 36MW BPTH for Bokaro Power Supply Company Limited (BPSCL) is under final stage of completion.

Oil & Gas Sector

Engineering & Project Management Consultancy services for City Gas Distribution Network at Bengaluru for GAIL Gas Ltd.

Achieved - Laying 1358 Inch-Km

Achieved PNG Domestic Connections of 1973 nos.

3 nos. CNG Stations and 2 nos. de-compression units have been commissioned.

EPMC Services for Up-gradation of SCADA, APPS & Telecom Systems for Visakha-Vijayawada-Secundarabad Pipeline (VVSPL) (cross country pipeline) of Hindustan Petroleum Corporation Limited (HPCL). Project is completed successfully and systems are operating smoothly from the day of commissioning. HPCL has issued a completion certificate and they are satisfied with company’s performance and rated as “EXCELLENT”.

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EPMC services for Bokaro-Angul-Dhamra Pipeline Section alongwith Spurlines of Jagdishpur-Haldia- Bokaro-Dhamra Pipeline for GAIL (India) Ltd., Noida has been started and the project is progressing well within the very tight schedule. This is prestigious project under “Urja Ganga Pariyojna”.

It includes Laying and installation of 36”/ 30” / 12” /6” /4” X 1063 km approx. pipeline from Bokaro–Angul–Dhamra Pipeline Section alongwith Spurlines & 7 CGDs enroute Jagdishpur–Haldia & Bokaro–Dhamra Pipeline viz Varanasi, Patna, Ranchi, Bhubaneswar, Cuttack, Kolkata and Jamshedpur.

Mainline: 30” x 345 km, (Phulpur – Dobhi) -759 km Line

Spurline : 24” / 18” / 12” / 8” x 414 Km (Gorakhpur, Varanasi, Patna, Barauni)

EPMC services for construction of one of the highest altitude POL Depot at Leh, J&K for Hindustan Petroleum Corporation Ltd., Mumbai has been started

Infrastructure Sector

Employees’ State Insurance Corporation, New Delhi has appointed your company as Project Management Agency to execute the construction of 4 (Four) hospitals including Architect & Engineering Consultancy works. These projects are under execution.

Successfully completed the Design & Engineering services for the revolving dome for 2.5 m diameter Telescope at Mount Abu, Rajasthan for Indian Space Research Organisation, Bangalore.

Preparation and submission of Techno Economic Feasibility Report (TEFR) for setting-up of 10 MGD (45 MLD) Desalination Plant at Visakhapatnam Steel Plant, Visakhapatnam.

Preparation and submission of Detailed Project Report alongwith Detailed Engineering for Modernisation of four numbers of Central Ordnance Depots at COD Delhi Cantt, CASD

Delhi Cantt, CAFVD Kirkee Pune & COD Chheoki Allahabad on 30.05.2016.

Preparation and submission of Detailed Project Report along with Detailed Engineering for Modernisation of Naval Aircraft Yards at Goa & Kochi was completed on 23.03.2017.

Construction of buildings as “Deposit Works” on “Total Turnkey basis” for Corporation Bank, Mangalore is under progress.

Bharat Electronics Limited has awarded a job to your company for Project Management Consultancy services for construction of underground and overground specialized integrated EMP protected hardened structures at 5(five) locations in India. This project is under execution. Civil works are in full swing.

Detailed Engineering & Designers’ supervision for Mini Indoor Stadium DID Lines School and Rain Water Harvesting System along Maud Road for Delhi Cantt. Board. The project was completed on 16.02.2017

The Institute of Microbial Technology, Chandigarh a unit of CSIR awarded the job of “Expansion and Modernisation of Microbial type Culture Centre and Gene Bank (MTCC)” under deposit works as project Management Consultant. The job involved conceptualisation, Basic & Detailed Engineering alongwith procurement services and project execution on “Total Turnkey Basis”. It was successfully completed and handed over to Client and is under successful operation since then.

18

MECON Limited

Project Management and Consultancy services for establishment of 100 Bedded Homeopathy Hospital at Narela, Delhi for Ministry of Ayush has been started.

Your Company has successfully completed Engineering Consultancy services in replacing the "British designed lock gate system” to “oil hydraulic winch drive operated lock gate system” for Kolkata Port Trust in December, 2016.

Your company has also completed the feasibility study for development of additional facilities in existing Mechanised Coal Handling Plant (MCHP) of Paradip Port Trust (PPT) satisfactorily. Based on MECON’s performance in the Feasibility Study, PPT has further awarded the job of implementing effective dust control system in the MCHP area on nomination basis.

Your Company is serving a large number of clients in the Public and Private Sectors. Some of the major clients in Public Sector include SAIL, GAIL, NMDC, NINL, RINL/VSP, KIOCL, HCL, NML, RINMOIL, SAILMOIL, MIDHANI, Corporation Bank, BEL, GoJ, RPTPL, PFC, HPCL, BPCL, OPTCL, UPPCL, UPRVUNL, TANGEDCO, OMDC, OMCL, MRPL, TVNL, FCRI, IPICOL, NALCO, BPSCL, NLC, NSPCL, NPCIL, WBSEB, WBPDCL, WBSEDCL, BESCOM, OHPC, PFC, CMWSSB, UCIL, HPCL, BGL, OMCL, APPGCL, IOCL, HPGCL, ONGC, CPCB, KPCL, VPT, KPT, PPT, GGL, IGL, BGL, TNGCL, DVC, MSTC, NHPC, NMPT, IDCOL, IREL, BARC, SBI besides Ministry of Power, Govt. of India, the State Electricity Boards in Jharkhand, West Bengal, Madhya Pradesh, Chhattisgarh, Rajasthan, Tamil Nadu, Uttaranchal, Uttar Pradesh, Odisha. Jindal Group, Bhushan Group, Tata Group, UML, ESSAR, STEMCOR, ESSEL, KIC METALIKS, AXIS BANK, UML, ULTRATECH, MONNET, BMM, UGSL, MEL, BRPL, SESA GOA, ADHUNIK, HINDALCO, TML, BIL, MNGL, IL&FS, TOPWORTH, ADANI, MSPL, IIL, SLR, etc. are some of the major clients in the private sector.

In addition to above, some of the major clients to whom your company has been rendering services during this year include NTPC, ESIC, NSPCL, JBVNL, MAHAGENCO, Ministry of AYUSH, ISRO, HAL, MRPL, HEC, BARC, HINCOL, APMDCL, ISRO, JBVNL, JSW, Tata Steel, EIPL, UGSL,

19



Electrosteel, TATA METALIKS, etc. The Company is also providing services for Defence Sector.

Business procurement in the area of Engineering Consultancy & PMC services was `335.88 Crore in previous year and 343.29 Crore during this financial year. In Supply / Turnkey projects it was 347.53 Crore in previous year and `1075.36 Crore during this year

2.0 BUSINESS DIVERSIFICATIONMECON already has three business verticals namely, Metals, Energy [Oil & Gas and Power] and Infrastructure. Metals & Mining being the traditional core-competence area of MECON, other business verticals were carved out of a necessity to compensate for market downturn due to an inherent cyclic behaviour of metals sector and to insulate the company from the perils of business cycles.

MECON has successfully established its presence in above diversified sectors (Infrastructure & Energy) by widening its reach to areas such as, CNG & City Gas Distribution networks, Long Distance Gas Pipelines in Energy sector and from Steel plant infrastructure to iconic infrastructure projects, which are steadily bringing consolidation for the company.

20

MECON Limited

During this fiscal year, business procurement from the diversified sectors (other than Metals) has been significant. In Engineering and Consultancy, the Company’s order booking is 71.83% (previous year 76.54%) in Non-Metal sectors and 28.17% (previous year 23.46%) in Metal sector. In case of supply / turnkey projects, it is 49.88% (previous year 79.23%) in the diversified sectors and 50.12% (previous year 20.77%) in Metals Sector.

3.0 MANAGEMENT INITIATIVESYour company being an organisation with strong fundamentals, focused marketing approach and ready to meet up to challenges, have been able to moderate its business strategy to focus on areas like engineering in allied fields, Infrastructure, Power and Oil & Gas sectors and to improve its presence in non-metal sectors as well in terms of business procurement and has also ventured into newer areas of business with strategic partners to meet challenges emerging from changed business scenario.

With the derived confidence of breaking into areas hitherto unchartered, your company will continue to carry forward the momentum to transcend into niche products/service areas as a way forward.

To continue as a profitable organization with a greater market share and to maintain the growth momentum, your company has taken initiatives such as portfolio analysis to identify profitable business areas, retraining & redeployment of manpower based on project profitability, increasing office working hours to improve productivity, engagement of domain experts to complement in-house expertise and corporate brand building.

In order to strengthen marketing functions of the organization and explore new business opportunities, reorganization of marketing team is in place with the induction of young executives in this group.

Your company is eyeing at International market for business potential and is participating in overseas projects particularly in Africa, Middle East, South East Asia and Indian sub-continent region. Recently, your company has completed one project for a Client based in Nigeria & is executing another project in Oman and we are expecting a few more projects in Iron and Steel sector.

4.0 MOU WITH MINISTRY OF STEEL ON PERFORMANCE

Like in the previous years, your Company has signed a MoU with Ministry of Steel for the Financial Year 2016-17. The Company achieved “Good” rating in the year 2015-16 and is likely to achieve “Good” rating in 2016-17.

0

100

200

300

400

500

2012-13 2013-14 2014-15 2015-16 2016-17

in

Cror

es

Year

Business Procured (Consultancy)

Metal Non-Metal

0100200300400500600

2012-13 2013-14 2014-15 2015-16 2016-17

in

Cro

res

Year

Business Procured (Supply)

Metal Non-Metal

21



5.0 ISO 9001:2008 CERTIFICATION

Your Company is the first consultancy organization in the country to be certified for ISO 9001 Quality Management System in the year 1994. The certificate has been awarded by M/s TUV NORD CERT Gmbh. The scope of Company’s certification includes Consultancy, Design & Engineering, Procurement of Plant & Equipment, Inspection, Construction & Project Management Services and Erection of Turnkey Projects. The re-certification audit by TUV has been completed in November, 2014 and Company’s QMS has been recertified for ISO 9001: 2008 for further period of three years with validity till 29.01.2018.

The surveillance audit of Vigilance function was conducted by TUV in December, 2016. With no Non-Conformity observed by TUV the ISO 9001:2008 certificate for Vigilance function of the Company is revalidated upto September, 2018.

6.0 INDIAN ASSIGNMENTS

Your company has procured following major work orders during 2016-17:

Metals Sector

Engineering, Procurement and Construction (EPC) services for Battery Proper (Pkg-1) for Rebuilding of Coke Oven Battery No. 8 at SAIL/Bokaro Steel Plant, Bokaro.

Project Management & Consultancy services for Rebuilding of Coke Oven Battery No.1 and Revamping of CDCP # 1 and part of Coal Chemical Plant and Dust Extraction System at RINL/Visakhapatnam Steel Plant, Viakhapatnam.

Project Management & Consultancy services (additional services) for Expansion Project of SAIL/IISCO Steel Plant, Burnpur for 2.5 MT Stream.

Additional Consultancy & Engineering services for Balance Works of Water Supply Packages 078, 077-01 & 077-02 of SAIL/Bhilai Steel Plant, Bhilai.

Engineering, Procurement and Construction (EPC) services for extended Category-II Repair of Blast Furnace # 4 for SAIL/Durgapur Steel Plant, Durgapur.

Preparation of Techno-commercial Viability Report for Parbatpur and Sitanala Coal Blocks for SAIL, Collieries Division, Kulti.

Project Monitoring & Control Activities for execution of Modernisation Project of Heavy Engineering Corpn. Ltd. (HEC), Ranchi.

Third Party Inspection services for installation of 3.0 Mtpa New Hot Strip Mill at SAIL/Rourkela Steel Plant, Rourkela.

Detailed Engineering & Consultancy services for Tinning Line Complex at Tarapur for JSW Steel Coated Products Ltd., Mumbai.

Preparation of Detailed Project Report (DPR) for 1000 Tpa Nickel Extraction Plant at Sukinda Mines for Tata Steel Ltd., Jamshedpur.

Preparation of report for assistance to Joint Working Group (JWG) & carrying out Technical Audit, Due Diligence & Valuation of 2 x 850 Tpd Air Separation Plant (BOO to BOT) for RINL/Visakhapatnam Steel Plant, Visakhapatnam.

Preparation of Pre-Feasibility Study Report for proposed Special Purpose Vehicle (SPV) for Rail Project in India for NMDC Limited, Hyderabad.

Detailed Engineering & Consultancy services for Pickling, Coil Annealing and Bar Annealing alongwith associated facilities in existing Bar and Rod Mill Complex of JSW Steel Ltd., Salem.

Detailed Engineering & Consultancy services for installation of New 110T Crane by replacing 65T existing Crane in BF # 1 Cast House & other Modification in BF # 2 area for JSW Steel Ltd., Salem.

Consultancy services for Civil and Structural Work for Simultaneous Blowing of BOF Converter at SMS-II (Pkg. 018) under the RSP Expansion Project for SAIL/Rourkela Steel Plant, Rourkela.

22

MECON Limited

Preparation of Detailed Project Report (DPR) for Development of Coal Blocks of Andhra Pradesh Mineral Development Corpn. Ltd., Hyderabad.

Preparation of Study Report for Benchmarking Study of NMDC Limited, Hyderabad.

Preparation of Techno-Economic Feasibility Report (TEFR) for proposed Steel Plant at Joda, Odisha for Tata Sponge Iron Ltd., Joda, Odisha.

Preparation of Techno Economic Viability (TEV) Report for Essar Steel India Ltd. comprising Beneficiation Plant, Slurry Pipeline, Pellet Plant and Steel Plant for State Bank of India, Mumbai.

Detailed Engineering & Consultancy services for installation of Rocking Runner at Blast Furnace-1 for Jindal Steel & Power Ltd., Raigarh.

Preparation of Techno Economic Viability (TEV) Report for Integrated Steel Plant of Electrosteel Steels Ltd., Bokaro.

Energy Sector

Engineering, Procurement and Construction (EPC) services for setting-up of an External Coal Handling Plant Package at North Karanpura STPP (3 x 660 MW) for NTPC Limited, Noida.

Project Management & Consultancy (PMC) services for Bokaro-Angul-Dhamra Pipeline Section along with Spurlines of Jagdishpur-Haldia-Bokaro-Dhamra Pipeline (JHBDPL) Project for GAIL (India) Ltd., Noida.

Project Management & Consultancy (PMC) services for Kochi-Koottanad-Bangalore-Mangalore (KKBMPL) Natural Gas Pipeline Project (Phase-II) for GAIL (India) Ltd., Noida.

Engineering & Project Management Consultancy (EPMC) services for City Gas Distribution Network at Bengaluru for GAIL Gas Ltd., Noida.

Detailed Engineering & Consultancy services for Coal based Thermal Power Plant (1 x 250 MW) at Rourkela (Phase-II) for NTPC-SAIL Power Co. Pvt. Ltd., New Delhi.

Project Management & Consultancy (PMC) services for Construction of 51 nos. of 33/11 kv Sub-stations with associated Lines for Pkg-2, within the jurisdiction of DISCOM-SOUTHCO, under Phase-III, ODSSP for Odisha Power Transmission Corporation Ltd., Bhubaneswar.

Change Order for Engineering, Procurement and Construction (EPC) services for Conversion of 132 KV Overhead Line to 132 KV Underground Cable - Power Supply System for Sinter Plant-II (Package No. 4) of SAIL/Bokaro Steel Plant, Bokaro.

Project Management & Consultancy (PMC) services for Construction of 34 nos. of 33/11 KV Substations, Pkg-1 (27 nos. of Substations) & Pkg-5 (7 nos. of Substations) within DISCOM-CESU & SOUTHCO under Phase-III, ODSSP for Odisha Power Transmission Corporation Ltd., Bhubaneswar

Engineering & Project Management Consultancy (EPMC) services for setting-up of CNG & CGD installation in North Goa for GAIL Gas Ltd., Noida.

Project Management & Consultancy (PMC) services for implementation of works under Integrated Power Development Scheme (IPDS) for all 40 selected Statutory Towns of Jharkhand for Jharkhand Bijli Vitran Nigam Ltd., Ranchi.

Engineering & Project Management Consultancy (EPMC) services for City Gas Distribution Network in Haridwar GA for a period of 3 years for Haridwar Natural Gas Pvt. Ltd. (A JV of BPCL & GAIL Gas Ltd.).

Engineering, Procurement & Construction Management (EPCM) services for Pet Coke Silos for Trucks & Wagon Loading alongwith associated Conveying System, Covered Shed for Sulphur Yard and DCU Coke Pit for Mangalore Refinery & Petrochemicals Ltd., Mangalore.

Engineering, Procurement & Construction Management (EPCM) services for Construction of MS, HSD, ATF Day Tanks Loading Facilities,

23



Truck Parking Terminal (Marketing Terminal) and Flare Gas Recovery System (FGRS) Project for Mangalore Refinery & Petrochemicals Ltd., Mangalore.

Detailed Engineering & Consultancy services for Modernisation of IOCL's Lube Blending Plant at Paharpur, Kolkata for Indian Oil Corporation Ltd., Kolkata.

Engineering & Project Management Consultancy (EPMC) services for Construction of POL Depot at Leh, Jammu & Kashmir for Hindustan Petroleum Corporation Ltd., Mumbai.

Engineering, Procurement & Construction Management (EPCM) services for Construction of Additional Tankages - Naphtha (2 tanks), VG-40 (2 Tanks), Inlet Receiving Tanks WWTP3 (2 Tanks) for Mangalore Refinery & Petrochemicals Ltd., Mangalore.

Engineering Consultancy services for Emission Control Systems for Tank Truck Gantries at Jaipur, Palanpur, Loni, Vashi, Wadala, Kolkata, Irumpanam and Chennai Terminals of Hindustan Petroleum Corporation Ltd., Mumbai.

Composite Consultancy Services for Delay Analysis, Balance Work Assessment, Material Specification Change Assessment and Reconciliation of Mandatory Spares at Chandrapur Project (2 x 500 MW) of Maharashtra State Power Generation Co. Ltd. (MAHAGENCO), Mumbai.

Engineering & Project Management Consultancy (EPMC) services for Augmentation of Facilities for Three Terminals of IOCL at Mourigram, Rajbandh & Siliguri under West Bengal State Office for Indian Oil Corporation Ltd., Kolkata.

Engineering & Project Management Consultancy (EPMC) services for setting-up of New Bitumen Emulsion Plant at Visakhapatnam for Hindustan Colas Pvt. Ltd. (HINCOL), Mumbai (A JV of HPCL with Colas SA, France).

Engineering & Consultancy services for Replacement of 100 ata & 39 ata Stem Pipeline

inside the Power Plant of Bokaro Power Supply Co. (P) Ltd., Bokaro.

Consultancy services for Balance Work & Supply, Change in Specification and Mandatory Spares Status for Koradi Project (3 x 660 MW) of Maharashtra State Power Generation Co. Ltd. (MAHAGENCO), Mumbai.

Composite Consultancy Services for Delay Analysis, Balance work Assessment, Material Specification Change Assessment & Reconciliation of Mandatory Spares at Parli Project (1 x 250 MW) of Maharashtra State Power Generation Co. Ltd. (MAHAGENCO), Mumbai.

Preparation of Detailed Project Report (DPR) & Basic Engineering services for Waste Heat Recovery based Power Plant at SP#3 & SP#4 of Tata Steel Limited, Jamshedpur.

Preparation of Market Survey & Detailed Feasibility Report (DFR) for Three Cities i.e. Varanasi, Cuttack and Bhubaneswar for GAIL Gas Limited.

Preparation of Market Survey & Detailed Feasibility Report (DFR) for three Cities i.e. Patna, Ranchi and Jamshedpur for GAIL Gas Limited.

Consultancy services for Surge Analysis at 19 Locations for Hindustan Petroleum Corporation Ltd., Mumbai.

Preparation of Detailed Feasibility Report (DFR) for Modernization of Lube Plants for Indian Oil Corporation Ltd., Mumbai.

Detailed Engineering services on MB Lal Committee Recommendations for East India Petroleum Pvt. Ltd., Visakhapatnam.

Extension of Contract for rendering Consultancy services for installation of 300 TPH Boiler & 36 MW BPTG Project for Bokaro Power Supply Co. (P) Ltd., Bokaro.

Preparation of Detailed Feasibility Report (DFR) for Vizag Refinery Evacuation Project for Hindustan Petroleum Corporation Ltd., Mumbai.

24

MECON Limited

Infrastructure Sector / Other Engineering

Additional work for execution on LSTK Basis for Construction of Buildings as "Deposit Works" on "Total Turnkey Basis" for Corporation Bank, Mangalore.

Construction of 100 Bedded ESIC Hospital, Staff Quarters and SRO Building at Surat, Gujarat as "Deposit Works" on "Total Turnkey Basis" for Employees' State Insurance Corporation, New Delhi.

Construction of 100 Bedded ESIC Hospital at Vizianagaram, Andhra Pradesh as "Deposit Works" on "Total Turnkey Basis" for Employees' State Insurance Corporation, New Delhi.

Construction of 100 Bedded ESIC Hospital at Phulwari Sharif, Bihar as "Deposit Works" on "Total Turnkey Basis" for Employees' State Insurance Corporation, New Delhi.

Construction of ESI Dispensary with 6 Beds Facilities and SRO at Bhelupur, Varanasi, Uttar Pradesh as "Deposit Works" on "Total Turnkey Basis" for Employees' State Insurance Corporation, New Delhi.

Project Management & Consultancy (PMC) services for establishment of All India Institute of Homeopathy at Narela, Delhi for Govt. of India, Ministry of AYUSH, New Delhi.

Project Management & Consultancy (PMC) services to execute Payload Fabrication & Testing Facility (PFTF) Buillding at 39 Acres New SAC Campus at Bopal, Ahmedabad for Indian Space Research Organisation (ISRO), Ahmedabad.

Preparation of Master Plan and Detailed Project Report (DPR) for establishing the Integrated Infrastructure Facilities for New HAL Helicopter Factory at Bidrehalla Kaval, Gubbi Taluk, Tumakuru Dist. for Hindustan Aeronautics Ltd., Bangalore.

Consultancy services for Recycling of Domestic Sewage of RSP Township for SAIL/Rourkela Steel Plant, Rourkela.

Preparation of Detailed Project Report (DPR) for Modernization of Naval Aircraft Yard for Kochi & Goa for Ministry of Defence, Govt. of India.

Preparation of Environmental Impact Assessment (EIA), Environmental Clearance & Environmental Management Plan (EMP) for Advanced Heavy Water Reactor Project & Residential Colony at Tarapur for Bhabha Atomic Research Centre (BARC), Mumbai.

Preparation of Feasibility Report (FR) for 6000 Tpd Uranium Mining Project comprising of Rohil Mines, Ore Processing Plant and Tailing Pond at Khandela Tehsil, Sikar Distt., Rajasthan for Uranium Corporation of India Ltd., Jaduguda.

Preparation of Detailed Project Report (DPR) for installation of Statue of Swami Vivekananda at Ranchi Lake for Department of Tourism, Art & Culture, Sports & Youth, Govt. of Jharkhand.

Detailed Engineering & Project Management Consultancy services for Dust Control System at Mechanised Coal Handling Plant of Paradip Port Trust, Odisha.

7.0 FOREIGN ASSIGNMENTS

Overseas assignment bagged by your company is highlighted below:

Preparation of Techno Economic Feasibility Report (TEFR) for setting up a Mini Steel Plant through MBF-BOF-CC Route for Al Jazeera Steel Products Co. SAOG, Oman.

8.0 FINANCIAL RESULTS

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

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

25



Particulars(` in Lakhs)

2016-17 2015-16

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

Nil Nil

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

(Add.) During the year

(Less) Utilized during the year

Closing Balance

21,726.12

(8,384.35)

2218.26 ________

11,123.51

37,992.14

(16,241.38)

24.64________

21,726.12

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

519.52 # 519.52 #

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

Nil Nil

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

9.0 DIVIDEND

This year your Directors have not recommended any dividend.

9.1 Cumulative Dividend & Tax Paid

Your company which had paid up capital of `4,013.84 lakh (previous year `4,013.84 lakh)

including Bonus Shares worth `40.31 lakh, has paid cumulative dividend including tax (Equity & Preference) of `6,836.59 lakh till 2015-16 and has not made any provision towards Dividend on Equity Shares in 2016-17. The cumulative income tax to the exchequer amounting to `35,222.96 lakh has been paid / provided till 2016-17.

10.0 EARNING PER EMPLOYEE

Operating Turnover per employee per year is as follows:

11.0 FUTURE BUSINESS VISION

The changing business scenario in the country, the subdued growth outlook for domestic and global steel market has posed strong challenges before the company. On the other hand this has provided impetus to reorganize the business portfolio and initiate measures to work for other promising options coming its way through multiprong governmental approach for stepping up economic revival process and tone up the business investment scenario. Your company is fully geared up to capitalize on strengths gained through past operations while shifting focus towards new opportunities through redefining existing business practices, reorganizing human resources and recalibrating the approach to gain foothold in new areas entailing emphasis on technologically oriented EPC projects, Mining & Mineral, Infrastructure and Energy sectors, which are experiencing resurgence in alignment with the governmental initiatives. Your company has consolidated its presence in Oil & Gas sector while making strong inroads into Infrastructure

Year

Turnover

2013-14 2014-15

400

300

200

100

0

2015-16 2016-17

in `

Cro

re

341.

29

389.

92

317.

28

342.

93

Year

OPERATING TURNOVER PER EMPLOYEE

2013-14 2014-15

3025201510

50

2015-16 2016-17

in `

Lak

h15.79 18.75

11.35 15.99

26

MECON Limited

sector. Your company also plans to venture into newer areas of business with strategic partners to meet challenges emerging from changed business scenario and envisions to emerge as a formidable force to reckon within its existing as well as new focused areas. By adopting smart business practices, through assimilation of modern technology and by utilizing intellectual capital, your Company is prepared to cope with the vagaries of steel cycle.

12.0 RESEARCH & DEVELOPMENT

R&D plays an important role in the innovation process. R&D results in valuable inventions, ideas and designs which can be a source of potential value when it comes to gaining competitive advantage. Your Company’s R&D activities are carefully planned so that all inventions are patented to protect these valuable assets.

The Company’s R&D mostly undertakes Applied Research and Experimental Development in the core area of business such as Iron and Steel as well as focused areas of national importance such as Defense, Environment etc. Your Company is engaged in R&D works sponsored by its own resources as well as other external funding agencies such as DRDO, DST, Ministry of Environment, Ministry of Steel and private sectors also. Collaborative efforts in R&D with academic institutions like Jadavpur University, Kolkata and Industrial house like TATA Steel – Jamshedpur are undertaken by Company’s R&D to strengthen the research potential and application domain.

Projects Completed

Design optimization of NEST IN roof structure with cold formed Steel section

This is a collaborative project with TATA Steel where design optimization has been carried out for low cost housing model called NEST IN. The structural design team provided an economic design which costs 26% less than the original,

without making any compromise on the safety aspect.

Design Development of 4,250 m3 Blast Furnace (Loha)

Development of indigenous technology for large Blast Furnaces that can take care of the problems faced by Indian operators and produce hot metal in a more environment friendly, efficient & economic way led to design and development of 4250 m3 BF by your Company. It is proudly informed that this prestigious development work has been successfully completed and ‘LOHA 4250’ was launched by the Hon’ble Minister of Steel, GoI, Shri Choudhary Birender Singh in Company’s Head Office on 21st December, 2016. In order to acquire intellectual protection over the development, a patent application has already been filed.

Improved 7m Tall 1.0 MTPA Coke Oven Battery with 49.8 m3 hot oven volume (ANGARA 7.1)

A 7 m tall 1 MTPA top charged Recovery type Coke Oven Battery has been designed for higher productivity with lesser requirement of resources. This battery can feed Blast Furnace with capacity of 4000 m3 or more. This prestigious development work – ‘ANGARA 7.1’ was also launched by the Hon’ble Minister of Steel, GoI, Shri Choudhary Birender Singh in Company’s Head Office on 21st December, 2016. In order to acquire intellectual protection over the development, a patent application has already been filed.

27



Design development of 1.2 MTPA Pellet Plant

Design development for 1.2 MTPA Pellet Plant based on travelling grate process is achieved. This indigenous pellet plant will have a price advantage and will reduce dependence on foreign technology providers. With better understanding of critical design aspects under Indian raw material condition, this effort will result in optimum yield.

gases, twin flue, under jet type. Each battery is of 69 ovens in single block. The batteries have double collecting mains with ovens having 3 nos. of charging holes each and the battery will have double gas collecting mains, one each on pusher side and coke side. There will be two waste heat tunnels on pusher side and coke side with common tunnel leading to chimney located on pusher side in the middle of the battery. The heating walls will have 15 pairs (30 nos.) of vertical flues.

Company’s developed prototype Ozone Monitoring System has been used by R&D team to provide services in the following projects:-

1. Measurement of real time ozone concentration in and around industrial area of Ranchi.

2. EIA/EMP study for Ozone Monitoring at Eight AAQ Locations in and around Mosabani Uranium Recovery Plant (MURP) of Uranium Corporation of India Limited, Ghatsila, W. Singhbhum District, Jharkhand.

3. Ozone Monitoring at seven AAQ location in and around SAIL- Bokaro Steel Plant, Bokaro

On-going Projects

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

This project is to establish the Friction Stir Welding in high temperature material such as P91 in supercritical & ultra-supercritical power plant that will enable thermal power plant to operate at higher pressure & temperature (beyond critical point of water). This is a collaborative project with Jadavpur University. The project is funded by Ministry of Steel from Plan Fund. Project is in progress.

MECON Designed 5m Tall Coke Oven Batteries

The coke oven complex consists of byproduct recovery type coke oven batteries with associated coal, coke and gas handling facilities. These batteries are of compound, regenerative with partial recirculation of waste

28

MECON Limited

Localized Heat Treatment of Steel Blank for Automotive application with R&D division, TATA Steel.

This project is to develop Lab scale tailored made blank with different combination of microstructure and mechanical properties to produce automotive components using localized heat treatment technique so that complex heat treated sections can be produced during this special process within a single blank. This is a collaborative project with TATA Steel. Patent application is in progress.

Development of Torpedo Ladle Car monitoring system using Infrared Imaging

In order to achieve minimum failure of Torpedo ladles and to increase the average life of Torpedo ladles, the best solution is online thermography using automation to locate the hotspot and to know the history of the spot for maintaining its data base at refectory maintenance for

management. The project is funded by Ministry of Steel from Plan fund and will be implemented at RSP, Rourkela

Preparation of DPR for 1000 TPA Nickel Extraction Demonstration Plant at Bamnipal, Odisha.

The DPR is under preparation based on available data from Client (Tata Steel Ltd) as well as technology provider. The job is progressing satisfactorily.

No. of Patents Under Process

1 Hybrid thermoelectrically cooled / heated Back-packed Air Circulating Helmet System

2 Thermoelectrically Direct Cooled / Heated Helmet for Various Industrial Applications

3 Improved 5.0 m tall Coke Oven Battery

4 Infrared Camera based ladle Condition Monitoring System

5 Continuous Multi Component Gas Analyzer using NDIR Method

6 Improved 1.0 MTPA Coke Oven Battery with 49.8 m3 hot oven volume (Angara)

7 1.2 MT/Year Pellet Plant

8 Improved Blast Furnace and Operation thereof, Design Development of 4250 m3 Blast Furnace (Loha)

9 Improved 7.0 meter tall coke oven battery.

29



Recognition of MECON R&D

Renewal of recognition of MECON, R&D by DSIR, Govt. of India has been obtained vide letter No. TU/IV-RD/1191/2016 dated 01.04.2016 for Three years (upto 31.03.2019).

13.0 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

13.1 Conservation of Energy

Efforts are being undertaken to change Steel plant configuration by eliminating energy intensive outdated technologies and introducing state of the art energy efficient technologies in iron and steel plants of CPSEs.

Over the years, your company has suggested a number of established energy saving measures / technologies to various steel plants projects in India, resulting in saving in scarce, high priced coking coal, saving in import of coking coal and resultant reduction in production costs. In addition to these measures, the company has suggested few more energy saving measures / technologies in various area of steel production, during 2016-17, which are summarised below:

Iron Making: Installation of in addition to primary dust catcher Cyclone to reduce dust load on gas cleaning plant for efficient gas cleaning.

Steelmaking and continuous casting: Adoption of Dry GCP in SMS Shop for upcoming project

Electrical

Use of variable frequency drive with low THD factor with the product pumps in POL Terminals to reduce power consumption by pumps

Use of roof top Solar power at Green building/Control room building as well as solar street light at various SV terminals of Oil & gas Projects to reduce Grid Power consumption

Use of Timer control lighting which optimizes the power consumption as per actual need

Apart from the technological measures mentioned above, your Company has taken steps towards use of Solar Energy by installing and commissioning a line Grid connected 20.0 kwp Roof Top Solar Power Plant for its Office Complex.

13.2 Technology Absorption

The detailed information on efforts made and benefits derived like products improvement, cost reduction, product development or import substitution from technology absorption along with technology imported and expenditure incurred on R&D as per Section 134(3) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules 2014 is enclosed at Annexure - I to this Report.

14.0 FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has earned ` 86.29 lakh Foreign Exchange during the year 2016-17. The expenditure in Foreign Exchange remitted/actually spent during the year is ` 241.04 lakh as per details given below.

Particulars (` in Lakh)• Professional & Consultation Fees. 104.67• Other matters 136.37

Total 241.04

15.0 HUMAN RESOURCE DEVELOPMENT

In light of your Company’s objective to focus and sustain a competent and highly responsive workforce with adequate domain expertise, the HRD department has undertaken the following activities during FY 2016-17, in the areas of Performance Management, Career Advancement, Contract Closure and Risk Analysis & Mitigation in Projects, Knowledge Management, Personality and Leadership Development, which are as detailed below:-.

30

MECON Limited

Technical In-house Programs conducted for our executives include ‘Training on Selection of technology & product Mix for Steel Plants’, ‘WS on formulation of Technical Eligibility criteria and preparation of TAR’, ‘Risk Analysis & Mitigation in Projects’, ‘Sensitization on preparation of TS excluding commercial clauses and Generation of Unit rates & costing for the projects’, ‘Green Corridor Connectivity’, ‘Training on SolidEdge Software’, ‘Training on Strata Control in Underground Mines’, ‘MEP training on Plumbing’, ‘Workshop on Oil and Gas Projects’, ‘Workshop on Steel Making and Casting’, ‘Internal Auditor Recertification Program for ISO 9001: 2015’, ‘Workshop on Service Tax Law and GST’.

Knowledge Sharing sessions have been conducted through domain experts of several sections on ‘Workshop on Delegation of Power’, ‘Talk on Sustainable Development’, ‘Workshop on Learnings from various executed Projects, along with senior officials from NISP’, ‘Strengthening Indian Steel Demand’, ‘Recent Developments in the Power Plant Operation & Abatement of Environmental Issues’

In-house soft skills trainings were conducted to focus on personality and leadership development on ‘Professionalism and communication’, ‘Personal Effectiveness’, ‘Success Conducive Attitude’, ‘Writ-ing Management and Presentation Skills’. Further a workshop on ‘Public Speaking and Presentation Skills’ was conducted by faculties from XIMB.

Our executives have been deputed to several reputed institutes for Technical and Skill related trainings in various business domains. Few prominent External trainings undergone by employees are ‘WS on Rain Water harvesting & Ground Water management’, ‘WS on Pumping System Optimization for Water Supply/Lift irrigation’, ‘LEO on Maintenance of Belt Convenor Systems’, ‘Herkules CNC Roll turning Lathe Made in India’, ‘Implementation of Uniform online Appraisal System in all the CPSEs’ under MoS’, ‘Course on Certified Welding Inspectors’, ‘Leadership Development

for Women Executives’, ‘Setting up Professional Goal Oriented Targets & Performance Evaluation’, ‘Surge Analysis & Design of Surge Protection Systems’, ‘3 Dimension LASER Land Scanners for Mining & other Application’, ‘Low Cost Prefabricated/Precast Mass Housing’, ‘Practical Use & Administration of FIDIC Conditions of Contract’, ‘Inclusion in Steel & Clean Steel Technology’, ‘Recruitment Rules & Reservation in Service’, ‘Water Management, Water Utilities & Industrial Waste Management’, ‘Functional Skill Development Program for Vigilance Officers’, ‘Training on GRIHA V 2015’, ‘Innovation in Clean Air Technologies & Process Solutions’, ‘Training on Corporate Governance’, ‘WS on High Rise & ICONIC Building Designing in ETABS V2016’

Our employees have also been a part of various Seminars and Symposiums of national and international repute in the areas of Iron & Steel, Mining, R&D, HR, Marketing, Procurement, Engineering & Design, Technologies & Business Strategies etc.

Regarding rationalized utilization of capabilities of Non-Executives, in-house training programs on, ‘Quality of Life’ and ‘Retirement Benefit Pension Fund’ were conducted.

Technical presentations by reputed companies were organized. Expert talks and workshops were organized to celebrate Fire Safety Week, Public Sector Week, World Environment Day, International Yoga Day, Vigilance Awareness Week, Productivity Week, International Women’s Day, Daughter’s Day.

Additionally, regular Employee Engagement programs were conducted such as ‘Workshop on Life after Retirement - Planning through investment in health and wealth’, ‘Managing Depression - the major impediment of life’, ‘Accomplishment Exhibition- to showcase the accomplishments & Scope of services of each section’, ‘In-house Quiz Competition- MANTHAN’, ‘Case study Competition’, ‘Wellness Sessions’, ‘Intersection Slogan and Painting Competition’, ‘Intersection Photography Competition’.

31



16.0 PERSONNEL & WELFARE

Employee strength of your Company at the end of the year i.e., as on 31.03.2017 was 1384. Out of the total strength of 1384, 259 belong to SC, 138 belong to ST categories & 10 belong to PWD category. Out of the total strength of 1384 employees, 139 are female employees.

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

Number of Cases filed Number of cases disposed.Nil Nil

16.2 As per DEP Gudielines, women in Public Sector (WIPS) Cell was established in your Company in November, 2015 for development of women employees and for promoting their interactions with women employees of other public sector units.

17.0 INDUSTRIAL RELATIONS

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

18.0 ACTIVITIES / STEPS TAKEN FOR THE WELFARE OF SC / STs IN THE COMPANY

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

are indicated below:

Cat./Group

Man-power as on 31st

March2017

No of SC

% age of SC

No of ST

% age of ST

No of

PWD

% of

PWD

A 1223 233 19 74 6 6 0.49

B 54 9 17 19 35 0 0

C 107 17 16 45 42 4 3.74

Total 1384 259 19 138 10 10 0.72

The Company has adopted adequate measures for safeguarding their interests and welfare, such as promotion as per general trend, proper regard for human rights, equality and impartiality in all spheres of activities and providing abundant opportunities for self development through sports, cultural, educational and recreational facilities. Scheduled Caste / Scheduled Tribe employees and their families residing in Shyamali Township enjoy all the facilities available to others. In order to implement the Government of India Directives and Post-based Rosters with regard to recruitment and promotion of SCs /STs, an SC / ST Cell has been formed with Assistant General Manager as Liaison Officer. The SC / ST Cell maintains proper record regarding recruitment and promotion and statistics of SC / ST employees and furnishes reports to the Ministry of Steel on regular basis. The Company has made consistent efforts to accommodate SC / ST candidates in all recruitments in MECON as well as in promotion to the next higher grade as per Government Directive.

All possible steps are taken to fill up the post in reserved category as per Government Directives issued from time to time.

19.0 CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT (CSR & SD)

With limited fund, your Company has focused on education, women empowerment, healthcare, community development and upgradation of infrastructure facilities in some villages of

32

MECON Limited

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

20.0 OFFICIAL LANGUAGE POLICY (USE OF RAJBHASHA)

Company is effectively implementing the Official Language Policy of Govt. of India in its official work. The company is also making all out efforts to achieve the targets fixed in the Annual Programme issued by Rajbhasha Vibhag, Ministry of Home Affairs, Govt. of India. For this purpose, there is an Official Language Implementation Committee under the Chairmanship of CMD. Hindi workshops are being organised for the employees. Your Company is an important member of Town Official Language Implementation Committee, Ranchi and actively participates in all the programmes.

Your Company has been awarded with 'Sarvotkrishta Rajbhasha Shree Shield' & Certificate by the Mahanagar Samanvay Samiti, Kolkata under the agies of Kendriya Sachiwalaya Hindi Parishad, New Delhi in the Rajbhasha conference, 2016 held in Kolkata on 12th August, 2016.

Dy. Director (OL), Regional Implementation Officer, Ministry of Home Affairs, Joint Director (OL) & Director, Ministry of Steel, Govt. of India, New Delhi inspected the progressive use of Hindi in Bhilai, Ranchi, Rourkela, Delhi & Hyderabad Offices of the company.

Your Company participated in the review meeting called by Secretary, Rajbhasha Vibhag, Govt. of India, Ministry of Home Affairs in connection with the implementation of Official Language Hindi in Central Public Sector Undertakings held on 17th January, 2017 in New Delhi.

"Hindi Pakhwara" was observed at Head Office as well as in all the site offices of the company from 14.09.2016 to 28.09.2016. On this occasion all employees took a pledge to increase use of Hindi in their day to day official work. During the "Hindi Pakhwara" competitions of various nature

were also organized at Head Office and other offices of the Company. These include Hindi Essay and Extempore Speech competitions in Hindi. A special Hindi workshop and one Rajbhasha symposium on "Unicode ke jariye Hindi me Kam-Kaj" were organised during the Pakhwara. Besides, the company also observed 'Rashtrakavi Ram Dhari Singh "Dinkar" Jayanti' during Hindi Pakhwara.

A Hindi House Magazine - "MECON BHARATI" is also being published by the company. This magazine provides a platform for Employees for creative writing in Technical field in Hindi.

21.0 VIGILANCE ACTIVITIES

The Vigilance set up of the Company is functioning under Smt. Supriya Jaiswal, ITS, Chief Vigilance Officer (CVO) who provides a link between the organization and the Administrative Ministry, CVC and CBI and also acts as a special assistant / advisor to CMD and reports directly to him in all matters pertaining to vigilance.

Efforts are on to continuously enhance transparency in various business activities of the company with use of computerization and leveraging of technology. Emphasis is laid on preventive vigilance, spreading awareness, surveillance and analysis of system & procedures in detail to ensure optimum utilization of resources, appropriate & timely decisions, corrective action against defaulters and transparency & accountability in the system. In this direction relevant circulars and guidelines from CVC and statutory authorities, as and when issued, are put in the in-house intranet 'meconinfo' for wider circulation among the employees. Various programmes, seminars, workshops, talks, interactive sessions and quiz competitions are organized by Vigilance department on vigilance aspects for employees on regular intervals. Vigilance articles are also published in the in-house publications whenever possible.

Complaints are investigated promptly by Vigilance department as and when received after checking their veracity. Sensitive sections / areas in the organization have been identified and thrust is

33



laid on conducting surprise inspections, regular inspections, scrutiny of files and studies in these areas. An Annual Action Plan is drawn for these activities and it is ensured that targets set in the Action Plan are achieved. Suitable suggestions are given for improvement in the system/eliminate discrepancies found, if any, during the above activities. A number of suggestions given by Vigilance Department for systemic improvement and streamlining various procedures have been implemented and the process is continuing. Job rotation is an ongoing process in the Company based on job requirement with specific reference to officials working in the sensitive areas.

Online Vigilance Clearance System for the purpose of vigilance clearance / status of employees in case of promotion, resignation, retirement etc. has been implemented in November, 2012 for which Vigilance Department maintains a computerized database of vigilance records of individual employees of the Company.

Online system for submission of Annual Property Returns has been implemented in the Company. APRs for the year 2016 have been submitted by the employees. The database of APRs of employees is maintained by Vigilance Department which is continuously scrutinized and monitored.

Integrity Pact (IP) is functional in MECON since 2007 and MECON enters into Integrity Pact with vendors / suppliers / contractors for orders of Rs. 1.0 Crore & above for EPC Projects and for orders of Rs. 25.0 Crore & above for Town Administration and in-house procurement. The draft Integrity Pact forms part of tender documents, wherever applicable. Till March, 2017, MECON has signed Integrity Pact (IP) with 132 suppliers / contractors. So far no representation / complaints / disputes have been received in the matters of tenders and contracts under IP. An Independent External Monitor (IEM) is in position to oversee the process of procurement and transactions where Integrity Pacts are signed between MECON and counterparties.

Vigilance Awareness Week-2016 was observed at MECON Head Office, Ranchi and at various Site

Offices commencing from 31st October, 2016 in which the employees participated with enthusiasm. The theme for observing Vigilance Awareness this year was “Public Participation in Promoting Integrity and Eradicating Corruption”. Various programmes /activities organized on this occasion were Pledge Ceremony by employees, Integrity Pledge by employees and individuals of corporate / entities /firms, Release of Booklet on “Vigilance in Project Management – Do’s and Don’ts in today’s concept” (containing messages of Shri KV Chowdary, CVC and Shri Atul Bhatt, CMD), Talks and sensitization programmes for employees and for students from various colleges and schools at Ranchi and at other cities all over India (a total of 24 academic institutions has been covered including 6 at Ranchi and 18 outside Ranchi), Mobile App uploaded in Intranet for accessing CVC circulars, Quiz Competition through Mobile App on the Vigilance/ Anti-corruption topics for MECON employees working at various locations, Display of Banners, Interview given by CVO, MECON in All India Radio, Ranchi on 04.11.2016 in the programme – MECON ke CVO se mulakat, Distribution of Pamphlets, Vigilance Walk, Nukkad Natak, Special Caller Tune for all mobile telephones provided by MECON, Documentary film “SANKALP” for spreading awareness against Corruption, Newspaper coverage and Prize / Memento distribution ceremony etc.

Complaint Handling Policy has been uploaded on Company’s website with a provision of lodging complaint online which is accessible to common individuals. Contact details of CVO and Senior Officials of Vigilance department, Organizational Structure of Department, Vigilance Quality Policy of the Company and ISO Certificate of Vigilance Department have been uploaded on Company’s website www.meconlimited.co.in. Whistle Blower Policy and Fraud Prevention Policy, The Handbook of CVC Circulars & Guidelines, Resolution on Public Interest Disclosures & Protection of Informer (PIDPI), Integrity Pact and RTI Manual have been uploaded in the Vigilance tab available on the Company’s website.

34

MECON Limited

Your Company is pleased to inform you that Vigilance Department follows a well-established Quality Management System (ISO 9001:2008) which has been certified by M/s TUV India Pvt. Ltd. (a subsidiary of TUV NORD CERT Gmbh, Germany).

22.0 DEVELOPMENT AND IMPLEMENTA-TION OF RISK MANAGEMENT

Your Company is committed to the continual identification, assessment / monitoring and management of risks associated with its overall business processes and operations. Management is accountable to the Board of Directors for effective deployment of risk management strategies in all relevant areas of company operations.

The Company’s risk management policies and procedures cover regulatory, legal, property, treasury and financial reporting. A clear organizational structure exists detailing lines of authority and control responsibilities. Each business unit is responsible and accountable for implementing procedures and exercise controls to manage risks within its business domain.

The objective of the Company’s risk management policy is to manage and in the long term, achieve a substantial reduction in its risk exposure and maintain it at acceptable levels. The aim is to maintain the balance between compliance and performance.

Based on the probable impact and likelihood of occurrence of the risk, requisite controls and mitigation action plans have been designed for risk treatment. Further, Company has established within its management and reporting systems, a number of internal controls to mitigate the risks. These internal controls / processes are duly managed by the Company’s Board of Directors, management and other personnel, designated to provide reasonable assurance regarding the achievement of organization’s business objectives.

To cover all the elements of risk at enterprise level, risks have been divided into five categories as shown in the following diagram.

Throughout the year, regular reviews are held at both the corporate and operational levels to identify and prepare action plans to address any new opportunities or risks that have arisen or likely to emerge since the previous review. The management discusses all categories of risks with members of the Audit Committee. Risks associated with compliance and financial reporting is also shared with the Audit Committee. On quarterly basis, the management reviews actual performance against the targeted budget and forecast are held with all supplementary data / documents. The well established risk management and control systems thus described and adopted provide a reasonable assurance as to the realization of strategic objectives. Also, the framework is subject to constant monitoring and review to prevent / eliminate the instances of non-compliance with rules and regulations.

Risk Management Committee:

In compliance with the observation made by the Board of Directors in its 216th Meeting held on 15th March, 2016, the Risk Management Committee was constituted at management level in the company in June, 2016.

Technical

Marketing

Contracts

Financial

HumanResource

RiskCategories

35



The role of Risk Management Committee was to review the existing risk management policy and suitably design & updating the framework of existing policy.

23.0 RIGHT TO INFORMATION

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

All quarterly and annual returns are timely e-filed with the Statutory Authorities.

24.0 CHANGES IN BOARD OF DIRECTORS

Shri A.K.Tyagi, CMD retired from the services of the Company on attaining the age of superannuation on 30.09.2016.

Shri Atul Bhatt, was appointed as Chairman and Managing Director of the Company w.e.f 01.10.2016.

Shri Deepak Dutta, Director (Commercial) retired from the services of the Company on attaining the age of superannuation on 31.10.2016.

Consequent upon transfer to Ministry of Fertilizer, Govt. of India as Officer on Special Duty, Smt Bharathi S. Sihag, IAS, Government Director and SS&FA, Ministry of Steel, cease to be the Director of the Company w.e.f. 30.11.2016.

Shri S.R. Sengupta, Director (Technology) retired from the services of the Company on attaining the age of superannuation on 31.12.2016.

Shri A.P.Singh, Director (Engineering) retired from the services of the Company on attaining the age of superannuation on 31.12.2016.

Shri P. K. Sarangi, was appointed as Director (Technology) of the Company w.e.f 01.01.2017. Later on he was redesignated as Director (Technical) by the order of Ministry of Steel.

Shri Saraswati Prasad, IAS, AS&FA to the Govt. of India, Ministry of Steel was appointed as Government Director on the Board of the Company w.e.f 08.02.2017.

Shri Goutam Chatterjee was appointed as Director (Commercial) of the Company w.e.f. 20.03.2017.

25.0 MANAGEMENT DISCUSSION & ANALYSIS REPORT

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

26.0 CORPORATE GOVERNANCE

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

27.0 AUDITORS

M/s. V. Rohatgi & Co, Chartered Accountants, 1st Floor, Sarjana Building, 1, Main Road, Ranchi – 834001 (Jharkhand) were appointed as Statutory Auditors by the Comptroller & Auditor General of India to audit the accounts of the Company for the financial year 2016-17. They have also been assigned to carry out the audit under Section 44AB of the Income Tax Act, 1961 for the year 2016-17.

28.0 DIRECTOR’S RESPONSIBILITY STATEMENT

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

36

MECON Limited

i) In the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

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

iv) The Directors had prepared the annual accounts for the financial year 2016-17 on a going concern basis; and

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

29.0 ACKNOWLEDGEMENT

Your Directors are pleased to place on record their appreciation for the contribution of all concerned towards the successful working of the Company during the year. The Directors also express their sincere and grateful thanks to the Company’s trusted clients, suppliers, sub-contractors and other partners & stakeholders in business for enabling it to perform up-to the expectations of the customers.

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

Your Directors also place on record their appreciation and also acknowledge the dedicated efforts of its employees at all levels for smooth functioning of the Company.

For and on behalf of the Board of Directors

Atul Bhatt

Chairman and Managing Director

Place: RanchiDate : 29/08/2017

37



Appendix - I

FORM NO. MGT 9EXTRACT OF ANNUAL RETURNAs on financial year ended on 31.03.2017

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

I. REGISTRATION & OTHER DETAILS:

1 CIN U74140JH1973GOI001199

2 Registration Date 31.03.1973

3 Name of the Company MECON LIMITED

4 Category/Sub-category of the Company PRIVATE COMPANY

GOVERNMENT COMPANY

5 Address of the Registered office & contact details

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

6 Whether listed company NO

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

NIL

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

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

Sl. No.

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

% to total turnover of the company

1 CONSULTANCY SERVICES 76.33%

2 CONSTRUCTION CONTRACTS 23.67%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl No Name and address of the Company CIN/GLN

Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1 METALLURGICAL & ENGINEERING CONSULTANTS (NIGERIA) LTD.

JOINT VENTURE

50% 2(6) OF COMPANIES

ACT, 2013

38

MECON Limited

IV. SHARE HOLDING PATTERN

(Equity share capital breakup as percentage of total equity)

(i) Category-wise Share Holding

Category of Shareholders

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

the year Demat Physical Total % of Total

Shares Demat Physical Total% of Total

Shares

A. Promoters

(1) Indian

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

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

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

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

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

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

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

(2) Foreign

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

b) Other Individuals

- - - 0.000% - - - 0.000% 0.000%

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

d) Banks / FI - 0.000% - - 0.000% 0.000%

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

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

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

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

B. Public Shareholding

1. Institutions

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

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

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

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

e) Venture Capital Funds

- - - 0.000% - - - 0.000% 0.000%

f) Insurance Companies

- - - 0.000% - - - 0.000% 0.000%

g) FIIs - - - 0.000% - - - 0.000% 0.000%

h) Foreign Venture : \Capital Funds

- - - 0.000% - - - 0.000% 0.000%

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

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

39



2. Non-Institutions

Category of Shareholders

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

Change during

the year Demat Physical Total % of Total Shares Demat Physical Total

% of Total

Shares

a) Bodies Corp.

i) Indian - - - 0.000% - - - 0.000% 0.000%

ii) Overseas - - - 0.000% - - - 0.000% 0.000%

b) Individuals

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

- - - 0.000% - - - 0.000% 0.000%

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

- - - 0.000% - - - 0.000% 0.000%

c) Others (specify)

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

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

C. Shares held by Custodian for GDRs & ADRs

- - -

0.000% - - - 0.000% 0.000%

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

(ii) Shareholding of Promoters

SN Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change in share-holding

during the year

No. of Shares

% of total Shares of the

company

% of Shares Pledged/

encumbered to

total shares

No. of Shares

% of total Shares of the com-

pany

% of Shares Pledged / encum-

bered to total shares

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

2 Govt. Director 120 0.0003% NIL 120 0.0003% NIL 0.000%

3 CMD, MECON 120 0.0003% NIL 120 0.0003% NIL 0.000%

TOTAL 40,138,360 100.000% 40,138,360 100.000% 0.000%

40

MECON Limited

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

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

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

At the beginning of the year

- NO CHANGE -Date wise Increase /Decrease in Promoters Shareholding during the year specifying

At the end of the year

(iv) Shareholding Pattern of top ten Shareholders

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

SN For each of the Top 10 shareholders

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

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

At the beginning of the year

- NIL -

Date wise Increase /Decrease in Promoters Shareholding during the year specifying

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

(v) Shareholding of Directors and Key Managerial Personnel:

SN For each of the Directors and Key

Managerial Personnel

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

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

1 GOVT. DIRECTOR

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

Date wise Increase 0.000% 0.000%

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

2 CMD

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

Date wise Increase 0.000% 0.000%

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

41



V. INDEBTEDNESS

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

(Amt. Rs./Lacs)

Particulars Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount - - - -

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 2.54 - - 2.54

Total (i+ii+iii) 2.54 - - 2.54

Change in Indebtedness during the financial year - -

Addition - - - -

Reduction 2.54 - - 2.54

Net Change 2.54 - - 2.54

Indebtedness at the end of the financial year - -

i) Principal Amount - - - -

ii) Interest due but not paid - - - -

iii) Interest accrued but not due NIL - - NIL

Total (i+ii+iii) NIL - - NIL

42

MECON Limited

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

Sl. No.

Particulars of Remuneration Name of Managing Director / Whole time Director / Manager (Shri)

Atul Bhatt

S. Chattopahyay

P. K. Sarangi

Gautam Chatterjee

Deepak Dutta

AK. Tyagi

A P Singh

S R Sengupta

Period

From 01-10-16

to 31-03-17

From 01-04-16

to 31-03-17

From 01-01-17

to 31-03-17

From 20-03-17

to 31-03-17

From 01-04-16

to 31-10-16

From 01-04-16

to 30-09-16

From 01-04-16

to 31-12-16

From 01-04-16

to 31-12-16

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 10,55,920.00 28,21,377.00

5,77,157.00

78,063.00 30,60,200.00 31,01,156.00

19,75,819.00

20,40,142.00

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

79,282.00

2,01,794.00

60,217.00

5,602.00

1,18,038.00

1,09,914.00

1,40,520.00

1,42,811.00

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

2 Stock Option

3 Sweat Equity

4

Commission

- as % of profit

- others, specify

5 Others, please specify

Total (A) 11,35,202.00 30,23,171.00 6,37,374.00 83,665.00 31,78,238.00 32,11,070.00 21,16,339.00 21,82,953.00

Ceiling as per the Act

43



B. Remuneration to other Directors

SN. Particulars of Remuneration Name of Directors Total Amount


1 Independent Directors

Fee for attending board committee meetings 1,10,000.00

Commission -

Others, please specify -

Total (1) - 1,10,000.00

2 Other Non-Executive Directors Shri Saraswati Prasad, IAS & Shri Syedani Abbasi, IAS

Fee for attending board committee meetings - -

Commission - -

Others, please specify - -

Total (2) - -

Total (B)=(1+2) - 1,10,000.00

Total Managerial Remuneration 1,10,000.00

Overall Ceiling as per the Act

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (*)

SN. Particulars of Remuneration Name of Key Managerial Personnel Total Amount

Name

Designation CEO Company Secretary CFO

1 Gross salary

- NA -

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

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

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

2 Stock Option

3 Sweat Equity

4

Commission

- as % of profit

- others, specify

5 Others, please specify

Total

(*) NOTE: Since MECON Limited is a Private Limited Company, the provision related to appointment of KMP is not applicable.

44

MECON Limited

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

TypeSection of the

Companies Act

Brief Description

Details of Penalty / Punishment /

Compounding fees imposed

Authority [RD / NCLT /

COURT]

Appeal made, if any (give

Details)

A. COMPANY

Penalty

Punishment NIL

Compounding

B. DIRECTORS

Penalty

Punishment NIL

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment NIL

Compounding

45



Annexure - A

FORM AOC- 2

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

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

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

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

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

(b) Nature of contracts/arrangements/transactions NA

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

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

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

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

(g) Amount paid as advance, if any NA

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

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

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

(b) Nature of contracts/arrangements/transactions NA

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

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

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

(f) Amount paid as advance, if any NA

Atul Bhatt Chairman and Managing Director

46

MECON Limited

Appendix - II

CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY DEVELOPMENT (CSR&SD)

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

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

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

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

The CSR plans are formulated and approved by Board Level Committee (*) and ratified by Board of Directors, as per Companies Act’ 2013 and DPE guidelines.

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

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

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

All the CSR activities are implemented in project mode.

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

The implementation and monitoring of CSR activities are overseen by the Board Level Committee.

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

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

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

Note: (*) # Headed by an Independent Director and two full-time Directors (till 31st December’2016)

# Reconstituted as – An Independent Director as Chairman, a part-time Independent Director as member & one full-time Director as member.

47



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

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

ii) Rural Development Projects

iii) Preventive Healthcare and Drinking Water Projects

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

v) Promotion & Development of Traditional Arts

vi) Environmental Sustainability

vii) Other welfare activities/ Miscellaneous Programs

2. COMPOSITION OF THE CSR COMMITTEE

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

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

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

The Board Level CSR & Sustainability Committee was once again reconstituted vide Memorandum of Circulation to the Board of Directors ref. no. 11/78/4(3)/593 dated 03.11.2014. The Committee consisted of the following Directors :

i) Shri Syedain Abbasi, IAS

Director – MECON & Joint Secretary,

Govt. of India, Ministry of Steel

ii) Shri S.R. Sengupta

Director (Technology)

MECON Limited

(Till 31.12.2016)

iii) Shri A.P. Singh

Director (Engineering)

MECON Limited

(Till 31.12.2016)

Thereafter, the Board Level CSR & Sustainability Committee was again reconstituted and approved vide Item No. 223/3833 in the 223rd meeting of the Board of Directors held on 22.02.2017.

48

MECON Limited

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

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

ii) Shri Sisir Kumar Appikatla Part-time Independent Director MECON Limited

iii) Shri Pradipta Kumar Sarangi Director (Technical) MECON Limited

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

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

2013-14 : ` 6,842.54 Lakhs

2014-15 : ` 3,273.95 Lakhs

2015-16 : ` (-)17,496.18 Lakhs

b) Average Net Profit for the last 3 financial years : ` (-) 2,459.90 Lakhs

4. Prescribed CSR expenditure (2%) of the : NIL amount for Financial Year 2016-17 is

5. Details of CSR fund spent during the financial year 2016-17, are indicated in Annexure-II. Manner in which the amount spent are as given below :

a) Total amount to be spent for the financial year 2016-17 : :

i) Carry-over fund of previous years : ` 270.43 Lakhs

ii) Allocation for financial year 2016-17 : ` 000.00 Lakhs

______________

Total amount : ` 270.43 Lakhs ______________

b) Total amount spent on CSR activities : ` 67.31 Lakhs during financial year 2016-17

c) Amount unspent (to be carried to next : ` 203.12 Lakh

financial year, i.e., FY 2017-18)

6. Reasons for not spending the amount :

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

49



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

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

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

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

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

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

v) Transportation of building materials in extremism affected remote villages of Jharkhand.

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

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

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

i) Providing 2 nos. Mortuary Refrigerator (Freezer Box) to Local NGOs/ Societies of Ranchi (Sl. No.1 (iv) of List of New Projects for FY 2016-17) :

The tender was cancelled as the price quoted by the parties for Mortuary Boxes was much higher than the approved CSR Budget.

ii) Providing Ceramic and Pottery unit for Skill development program at Ispat Mahila Vikas Sahyog Samiti Ltd., Ranchi (Sl. No.2 (ii) of List of New Projects for FY 2016-17) :

The above project could not be started due to terms of payments given by the different suppliers.

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

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

Sd/- Sd/-

P. K. SarangiDirector (Technical)

Syedain Abbasi, IASChairman (CSR Committee)

50

MECON Limited

Annexure - I of Appendix - II

Summary of Planned Expenses for on-Going Regular / Carry Over Projects under Implementation and New Projects for FY 2016-17

Sl. No.

Projects Item no. of

Schedule-VII

Planned Recurring

expenses on On-going Regular

(Committed) activity (In Rs. Lakhs)

Planned Expenses on Carry-

over projects (In Rs. Lakhs)

Planned Expenses on New

Projects of 2016-17 (In Rs. Lakhs)

Total Planned Expenses

(In Rs. Lakhs)

Remarks

1

Swachh Vidyalaya – Swachh Bharat Abhiyan : Construction/Maintenance of Toilets in MHRD Schools, Construction of Tubewells/Borewells etc.

(i) 0.000 10.660 0.000 10.660

2Healthcare, Sanitation and Drinking Water projects

(i) 8.000 11.000 16.000 35.000

3

Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects

(ii) 11.020 8.305 8.000 27.325

4Projects for Old Age Homes, Orphanage, Differently Abled etc.

(iii) 0.000 27.000 0.000 27.000

5 Rural development projects (x) 0.000 121.511 0.000 121.511

6Other Activities/Miscellaneous Programs

9.242 38.862 0.000 48.104

TOTAL 28.26 217.34 24.00 269.60 Note :• The overall expenditure on On-Going Regular Projects/Carry-Over Projects/New Projects shall be limited to the total fund avaiable ` 270.43 lakhs.

51



List of “on going Regular Projects” under Implementation for FY 2016-17

Sl. No.

Projects

Item no. of

Schedule-VII

Financial Progress

Target (%) in FY 2016-17

Project Cost

(In Rs. Lakhs)

Planned Recurring

expenses on On-going Regular (Committed)

activity (In Rs. Lakhs)

Remarks

From To

1 Healthcare, Sanitation and Drinking Water projects

i) Organising Health camps/Health Awareness Programs etc.

(i) 0 100 3.0003.000

On-going regular activity

ii) Engagement of Doctors etc. on Contract Basis for Health Camps

(i) 0 100 5.0005.000

On-going regular activity

Sub-Total 8.000 8.000

2 Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects

Honorarium to Teachers of 13 Community Education Centres

(ii) 0 100 3.432 3.432 On-going regular activity

Study Materials, Stationery etc. for Community Education Centres


Honorarium to Teachers of 10 Stitching Centres


Cloth, Stitching Materials for Students of Stitching Centres for Training


Annual Examination of 10 Stitching & Embroidery Centres


Honorarium to Staff members of VTI, Ranchi


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


Sub-Total 11.020 11.020

Other Activities / Miscellaneous Programs

Engagement of Photographer, Messenger etc. as supporting staff

3.242 3.242 On-going regular activity

Tours & travels for monitoring, site supervision etc. of projects


Training of CSR employees & associated personnel for capacity building


Printed stationery, Banners, Signboards etc.


Miscellaneous programmes 2.000 2.000 On-going regular activity

Sub-Total 9.24 9.24

TOTAL 28.26 28.26

3

i)

ii)

iii)

iv)

v)

vi)

vii)

i)

ii)

iii)

iv)

v)

52

MECON Limited

SINo


Schedule -VII

Financial Progress


Project Cost

(in Rs. Lakhs)

Expenses done in

FY 12-13, 13-14,

14-15 & 15-16 (in

Rs. Lakhs)

Under Initiation

stage/ Man-

agement Approval

stage

Planned Expenses on Carry-over projects (In Rs. Lakhs)

Remarks

Under Tendering / Ordering

stage

Under construction

stage / billing stage

Sub-Total

From To Active Less Active

1. Swachh Vidyalaya – Swachh Bharat Abhiyan : Construction/Maintenance of Toilets in MHRD Schools, Construction of Tubewells/Borewells etc.

i) Construction of 53 nos. new Toi-let Blocks/ Repair of dis-function-al Toilets in MHRD schools

(i) 84.72 100 57.33 48.67 8.660 8.660

Project of FY 2014-15

ii) Maintenance of 36 Nos. Bio-Toilets

(i) 0 100 2.00 2.00 2.000Project of FY 2014-15

Sub-Total 59.33 0.000 0.000 8.660 10.660

2. Healthcare, Sanitation and Drinking Water projects

i) Providing 3 (three) nos. Ambulances in Rural areas of Jharkhand

(i) 0 100 10.00 10.00 10.000Project of FY 2015-16

ii) Providing a Ambulance to Bharat Sevashram Sangh

(i) 0 100 1.00 1.00 1.000

Additional fund requirement for Sl. No. 2 i) to meet the expenses of the vehicle (Already approved project of FY 2015-16) (Fund provision in FY 2014-15 : ` 10.0 lakhs)

Sub-Total 11.00 0.000 0.000 0.000 11.000

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

List of Carry-Over Projects under Implementation for FY 2016-17

53



SINo


Schedule -VII

Financial Progress


Project Cost

(in Rs. Lakhs)

Expenses done in

FY 12-13, 13-14,

14-15 & 15-16 (in

Rs. Lakhs)

Under Initiation

stage/ Man-

agement Approval

stage


Remarks


stage

Under construction


Sub-Total


3. Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects

i) Augmen-tation of Anganwadi Centre at Vil-lage-Pancha, Dist.-Ranchi

(ii) 0 100 2.00 2.000 2.000Project of FY 2015-16

ii) Augmentation of Infrastruc-ture facilities at Livelyhood generation centres in Ranchi

(ii) 0 100 4.00 4.000 4.000Project of FY 2015-16

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

(ii) 95 100 24.70 23.47 1.235 1.235

Project of FY 2012-13; Balance fund relates to Lightning protection system

iv) Construction of Office-cum-Training & Dormitory (2nd floor) for Blind Girls in Ranchi

(ii) 95 100 19.78 18.91 0.870 0.870Project of FY 2014-15

v) Augmentation of Anganwadi Centre at Village-Pancha, Dist.-Ranchi (ii) 0 100 0.20 0.200 0.200

Additional fund require-ment for Sl. No. 3 i) for completion of work of already approved project of FY 2015-16 (Fund pro-vision in FY 2015-16 : ` 2.0 lakhs)

Sub-Total 50.68 0.000 0.000 8.305 8.305

54

MECON Limited

SINo


Schedule -VII

Financial Progress


Project Cost

(in Rs. Lakhs)

Expenses done in

FY 12-13, 13-14,

14-15 & 15-16 (in

Rs. Lakhs)

Under Initiation

stage/ Man-

agement Approval

stage


Remarks


stage

Under construction


Sub-Total


4. Projects for Old Age Homes, Orphanage, Differently Abled etc.

i) Construction of Boys Hostel in Orphanage at Vill.-Sungi, Khunti

(iii) 0 100 15.00 15.000 15.000Project of FY 2015-16

ii) Construction of Boys Hostel in Orphanage at Vill.-Sungi, Khunti (iii) 0 100 12.00 12.000 12.000

A d d i t i o n a l fund require-ment for Sl. No. 4 i) for c o m p l e t i o n of already ap-proved project of FY 2015-16 (Fund pro-vision in FY 2015-16 : ` 15.0 lakhs)

Sub-Total 27.00 27.000 0.000 0.000 27.000

5. Rural development projects

i) Construction of Toilet Block in Village School of Adopted Village-Pancha

(x) 74.54 100 42.07 31.40 10.672 10.672Project of FY 2012-13

ii) Construction of Toilet Complex in Adopted Village-Pancha

(x) 79.53 100 59.14 47.04 12.098 12.098Project of FY 2012-13

iii) Construction of Toilet Complex in Adopted Village-Parsa Toil, Pancha

(x) 36.99 100 59.14 21.88 37.258 37.258Project of FY 2012-13

iv) Construction of Toilet Block for Girls in Orphanage of Adopted Village - Sungi

(x) 70.87 100 35.37 25.07 10.304 10.304Project of FY 2013-14

55



SINo


Schedule -VII

Financial Progress


Project Cost

(in Rs. Lakhs)

Expenses done in

FY 12-13, 13-14,

14-15 & 15-16 (in

Rs. Lakhs)

Under Initiation

stage/ Man-

agement Approval

stage


Remarks


stage

Under construction


Sub-Total


v) Construction of Toilet Block for Boys in Orphanage of Adopted Village - Sungi

(x) 38.78 100 35.57 13.80 21.770 21.770Project of FY 2014-15

vi) Construction of Class rooms in Rural areas of UP

(x) 97 100 15.21 12.36 1.930 1.930Project of FY 2012-13

vii) Construction/Upgradation of Village roads of UP

(x) 97.57 100 24.64 22.18 0.500 0.500Project of FY 2012-13

viii) Construction of Akhra and Roof slab of Community Centre at Village-Pandu Toli

(x) 0 100 2.98 2.980 2.980Project of FY 2014-15

ix) Construction of Drinking water system at Vill.-Lalpur, Block-Kairabera, Dist.- Simdega

(x) 0 100 15.00 15.000 15.000Project of FY 2015-16

x) Construction of Drinking water system at Vill.-Lalpur, Block-Kairabera, Dist.-Simdega

(x) 0 100 9.00 9.000 9.000

Ad d i t i o n a l fund require-ment for Sl. No. 5 xi) as per site re-quirement for completion of already a p p r o v e d project of FY 2015-16 (Fund pro-vision in FY 2015-16 : ` 15.0 lakhs)

Sub-Total 298.12 24.000 0.000 97.511 121.511

56

MECON Limited

SINo


Schedule -VII

Financial Progress


Project Cost

(in Rs. Lakhs)

Expenses done in

FY 12-13, 13-14,

14-15 & 15-16 (in

Rs. Lakhs)

Under Initiation

stage/ Man-

agement Approval

stage


Remarks


stage

Under construction


Sub-Total


6. Other Activities / Miscellaneous Programs

i) Construction of Community Centre in UP

18.98 100 40.00 6.69 33.310 33.310Project of FY 2013-14

ii) Exhibition - cum - Craft Mela

4.00 4.000 4.000Project of FY 2015-16

iii) Impact assessment report

5.00 1.000 1.000Project of FY 2015-16

iv) Construction of Community Centre at Akbarpur, Kanpur Dehat in UP

0.55 0.552 0.552

Additional fund re-quirement for Sl. No. 6 i) to cover additional foundation work done at site for completion of already a p p r o v e d project of FY 2013-14 (Fund pro-vision in FY 2013-14 : ` 40.00 lakhs)

Sub-Total 49.55 0.000 0.000 38.862 38.862

TOTAL 51.000 0.000 153.338 217.338

57



List of "New Projects" for FY 2016-17

Sl. No.

Projects Item no. of Schedule-VII

Financial Progress


Project Cost

(in Rs. Lakhs)

Planned Expenses on New

Projects of 2016-17 (In Rs. Lakhs)

Remarks

From To

1 Healthcare, Sanitation and Drinking Water projects

i) Project Smile : Cleft lip and Palate surgery for poor/downtrodden/needy patients

(i) 0 100 3.00 3.000 New project

ii) Providing a Hearse vehicle (Vehicle for carrying Coffin for Funeral) to Local NGO/Society of Ranchi

(i) 0 100 11.00 11.000 New project

iii) Providing medical care equipment / instruments in mobile unit (Ambulance) of Lutheran Health Care Society, Ranchi

(i) 0 100 1.00 1.000 New project

iv) Providing 2 nos. Mortuary Refrigerator (Freezer Box) to Local NGOs/Societies of Ranchi

(i) 0 100 1.00 1.000 New project

Sub-Total 16.00 16.00

2 Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects

i) Providing play items to Rose Bud Preparatory School, Ranchi (ii) 0 100 2.00 2.000 New

project

ii) Providing Ceramic and Pottery unit for Skill development program at Ispat Mahila Vikas Sahyog Samiti Ltd., Ranchi

(ii) 0 100 3.00 3.000 New project

iii) Construction of an additional Classroom at Pramathanath Madhya Vidyalaya, Hinoo, Ranchi

(ii) 0 100 3.00 3.000 New project

Sub-Total 8.00 8.000

TOTAL 24.00

58

MECON Limited

Annexure - II of Appendix - II

Manner (Details of the Project) in which the amount spent during the Financial Year 2016-17

(As on: 31.03.2017)

1 2 3 4 5 6 7 8 9

Sl.No.

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

Projects or Programmes1. Local area or Others2. Specify the state and district(where projects or programmes were undertaken)

Amount outlay (Budget)Project or Programme wise

Amount spent on the projects or programmes

Sub-heads : 1.Direct expenditure on projects or programmes

2.Overheads

Cumulative expenditure upto the reporting period

Amount spent: Direct or through imple-menting agency

Status of the Project

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

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

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

(Carry-over project of FY 2015-16)

[Project Cost : (Toilets + Borewells) : ` 57,33,000/-]

Start date (SD) & Completion Date (CD) as per Work Order :

• 2 nos. new toilets in Ranchi – 21.01.2015 (SD)/ 20.03.2015 (CD) (2 months)

• 05 nos. new toilets in Khunti - 21.01.2015 (SD)/20.03.2015 (CD) (2 months)

• 04.nos. new toilets in Deoghar - 03.02.2015(SD)/02.04.2015 (CD) (2 months)

• 02 nos. dis-functional toilets in Deoghar & 04 nos dis-functional toilets in Ranchi - 24.04.2015(SD)/ 30.06.2015 (CD) (2 months 1 week)

• 09 nos. Borewells in Lohardaga & Hazaribagh- 12.05.2015 (SD)/ 02.06.2015 (CD) (3 weeks)

Infrastructure Development Programme

- Sanitation Programme

1) Ranchi district – 6 nos.

2) Khunti district – 5 nos.

3) Deoghar district – 6 nos.

4 Hazaribagh district – 12 nos.

5) Lohardaga district – 24 nos.

8,66,000 8,33,490 1,80,040

(in FY 14-15) +

46,22,850

(in FY 15-16)+

8,33,490

(in FY 16-17)

= 56,36,380

Direct 1) Work completed for 53 nos. Toilets

a) Physical progress – 100%

b) Financial progress – 98.31%

c) Bills under scrutiny.

Sub-Total (1) 8,66,000 8,33,490 56,36,380

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2. Rural Development Projects:

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

Start date: 08.03.2013 (LOI)Completion date: 07.09.2013 (6 months)(As per Work Order)

Infrastructure Development Programme - Sanitation Programme

1) Village Residential School (Pranavanand Vidya Mandir), Pancha– (14-seater toilet)

2) Village – Pancha (10-seater toilet)

3) Village –Parsa Toli, Pancha (10-seater toilet)

All the above in Block – Bundu, Dist – Ranchi, State - Jharkhand

60,03,800 5,01,735 18,27,745(in FY 12-13) +

37,31,740(in FY 13-14) +

7,65,200(in FY 14-15) +

37,52,600(in FY 15-16)+

5,01,735(in FY 16-17)

= 1,05,79,020

Direct 1) Village School – Work completed.a) Physical progress – 100%b) Financial progress – 75.53%c) Final bill under scrutiny.

2) Vill.- Pancha – Work completed. a) Physical progress – 100%b) Financial progress – 80.20%c) Final bill under scrutiny.

3) Vill – Parsa Tolia) Physical progress – 65.76%b) Financial progress – 44.19%c) Balance work: Plumbing, Sanitary, Electrics, Finishing, Solar PV System, etc.

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

Start date: 27.09.2013Completion date: 26.03.2014 (6months)(As per Work Order)



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

10,30,280 23,895 7,95,590(in FY 13-14) +

9,92,240(in FY 14-15) +

7,19,295 (in FY 15-16)+

23,895(in FY 16-17)= 25,31,020

Direct 1) Work completed a) Physical progress – 100%b) Financial progress – 71.55%c) Bill of Solar PV System under scrutiny.d) Final bill under processing in Finance.

iii) Construction of 1 no.Toilet Complex (5-seater toilet) for Boys at Orphanage Hostel (Anmol Basera)(Project cost: ` 35,57,005/-)(Carry-over project of FY 2014-15)

Start date: 04.09.2014Completion date: 03.03.2015 (6 months) (As per Work Order)



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

21,77,435 7,64,150 11,53,045(in FY 14-15) +

2,26,525(in FY 15-16)+

7,64,150(in FY 16-17)= 21,43,720

Direct Work completeda) Physical progress – 100%b) Financial progress – 60.27%c) Final bill under scrutiny.

iv) Augmentation of Anganwadi Centre in adopted village (Project cost : ` 2,18,686/-)(Carry-over Project of FY 2015-16)

Start date: 13.01.2016Completion date: 12.03.2016 (2 months) (As per Work Order)

InfrastructureDevelopment Programme

Village – Pancha, Block – Bundu, Dist - Ranchi

2,20,000 2,18,685 2,18,685(in FY 16-17)

Direct Work completeda) Physical progress – 100%b) Financial progress – 100%

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v) Augmentation of infrastructure facilities at Livelihood Generation Centre in Ranchi(Approved Project of FY 15-16)(Project Cost : ` 3,82,051/-)Start date : 03.02.2016Completion date: 02.05.2016 (3 months)(As per Work Order)

InfrastructureDevelopment Programme

Vikas Bharti, Research & Study Centre,19, Gramaytan, Arogya Bhawan-1, Bariatu Road, Dist – Ranchi, State - Jharkhand

4,00,000 2,66,500 2,66,500(in FY 16-17)

Direct Work completeda) Physical progress – 100%b) Financial progress – 69.75%c) Final bill under scrutiny.

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

Start date(SD) & Completion date (CD) (As per Work Order) : 1. Patel Gyan Vidyapeeth - 04.10.2012 (SD)/ 1.03.2013 (CD)2. Madarsa Ahle Sunnat - 27.11.2012 (SD)/ 31.03.2013 (CD)

Infrastructure Development Programme – Construction

of Classrooms

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

1,93,000 -- 4,94,075(in FY 12-13) +

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

2,03,840(in FY 14-15)

=12,35,540

Direct 1) Work completed for Patel Gyan Vidya Peeth; Some Electrical work, glass fitting, floor repair, painting of grill, window & building, etc. for Madarsa Ahle Sunnat is pending.a) Physical progress – 100%b) Financial progress – 81.21%

2) Confirmation regarding completion of work awaited from villagers/ Gram Pradhan.

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

Start date: 05.06.2013Completion date: 04.10.2013 (4 months)(As per Work Order)


of Road

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

50,000 50,220 6,89,265(in FY 12-13) +

13,55,030(in FY 13-14) +

1,73,305(in FY 14-15)

50,220(in FY 16-17)= 22,67,820

Direct 1) Work completed.a) Physical progress – 100%b) Financial progress – 100%

viii) Construction of Akhra and construction of Roof slab & finishing work of Community building in adopted village (Project cost : ` 2,98,130/-)(Carry-over project of FY 2014-15)



of Akhra & Repair of Community

Building

Village-Pandu Toli, Nagri,Dist.-Ranchi, State - Jharkhand

2,98,130 2,98,130 2,98,130(in FY 16-17)

Direct 1) Work completed.a) Physical progress – 100%b) Financial progress – 100%

Sub-Total (2) 1,03,72,645 21,23,315 1,95,40,435

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3. Preventive Healthcare and Drinking Water projects

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

Community Healthcare

i) Mobile Health camps with a team of doctors, paramedical staff etc. alongwith medicine for free health check-up & medicines were given to the poor & needy patients at CSR Pavilion, Pundag, Boreya Kanke, Jagannathpur, Ganyor Toli Hatia, Pundag, Bariatu, Vill - Pandu Toli, Nagri,, Vill – Deouri/ Pundidiri, Tamar; Vill – Rupru, Angara, Vill – Pahar Singh Birhore, Angara; Vill – Kherwa kocha, Angara in Ranchi District; Vill – Rai, Vill – Sungi & Vill – Bingaon in Khunti district and Vill – Barki Champi in Lohardaga district of Jharkhand

8,00,000 7,77,170 7,77,170 (in FY 16-17)

Direct 1) Regular on-going projecta) Physical progress – 100%b) Financial progress – 100%

2) No. of Health Camps : 77 No. of Patients: Around 5,260 patients

ii) Project Smile : Cleft Lip and Palate Surgery for poor/downtrodden/needy Patients

Community Healthcare

Akila Bharatha Mahila Seva Samaja, Koramangala, Bangalore, State - Karnataka

3,00,000 3,00,000 3,00,000(in FY 16-17)

Direct 1) Work completed.a) Physical progress– 100%b) Financial progress – 100%

Sub-Total (3) 11,00,000 10,77,170 10,77,170

4. Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects

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

• Honorarium to teachers

• Dress/Uniform for children of Education centres

Community Education Scheme

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

3,43,200

90,000

3,12,000

1,58,190

3,12,000(in FY 16-17)

1,58,190(in FY 16-17)

Direct

Direct

1) Regular on-going projecta) Physical progress – 100%b) Financial progress – 100%

ii) Free Stitching training for under privileged women at 10 stitching Centres

• Honorarium to teachers

• Purchase of stitching materials for providing to the students for practice stitching

• Annual Examination (2014-15 batch)



Women Empowerment Scheme (Employment/ Livelihood Enhancing Vocational Skills)

Mani Tola, Doranda Urdu Library, Hinoo, Argora, Pathar Kocha, Kishoreganj, and Jagannathpur; Vill-Pancha, Bundu, Vill-Kuchhu, Ormanjhi in Ranchi District & Vill – Sungi of Khunti district of Jharkhand.

2,64,000

75,000

85,000

2,20,000

-

33,300

38,340

26,750

2,20,000(in FY 16-17)

-

33,300 (in FY 16-17)

38,340 (in FY 16-17)

26,750(in FY 16-17)

Direct

Direct

Direct

Direct


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

• Honorarium to staff members

Vocational Training Scheme (Employment/Livelihood Enhancing Vocational Skills)

VTI, Dist – RanchiState - Jharkhand

1,94,820 46,200 46,200(in FY 16-17)

Direct


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


Projects for “Divyang”

Brajkishore Netraheen Balika Vidyalaya, Bargain, Dist – Ranchi, State - Jharkhand

1,23,500 1,23,500 12,35,000(in FY 12-13) +

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

2,47,000(in FY 14-15)+

1,23,500(in FY 16-17) = 24,70,000

Direct 1) Work completeda) Physical progress – 100%b) Financial progress – 100%

v) Construction of Dormitory at 2nd floor for Blind Girls (Project cost : ` 19,77,649/-)(Carry-over project of FY 2014-15)


Projects for “Divyang”

Brajkishore Netraheen Balika Vidyalaya, Bargain, Dist – Ranchi, State - Jharkhand

87,000 86,915 18,90,730(in FY 15-16)+

86,915(in FY 16-17)

=19,77,645

Direct 1) Work completed a) Physical progress – 100%b) Financial progress – 100%

vi) Providing play items to Government Schools of Jharkhand (Vidyalaya Chalen Abhiyan)(Project cost : ` 50,000/-)(Carry-over project of FY 2015-16)

Start date: 02.01.2016 Completion date: 09.01.2016 (7 days)(As per Work Order)

Promoting Education

Middle School, Vill – Nagri, Ranchi

13,170 13,170 Direct 1) Work completeda) Physical progress – 100%b) Financial progress – 100%c) Balance fund : ` 36,830/-

vii) Construction of one no. additional Class Room (Project cost: ` 3,94,885)

Promoting Education

Pramathanath Middle School, Hinoo, Ranchi

4,00,000 1,77,700 1,77,700( in FY 16-17)

Work completeda) Physical progress – 100%b) Financial progress – 45%

Sub-Total (4) 16,62,520 12,36,065 54,73,295

5. Training to promote Rural Sports/ Promotion & Development of Traditional Arts

i) Tribal Folk and Traditional Painting Camp(Carry-Over Project of FY 2015-16)

Promoting Traditional Arts

Jawaharlal Nehru Kala Kendra, District-Ranchi, State - Jharkhand

49,300 49,300(in FY 16-17)

Direct Work completed in FY 15-16a) Physical progress – 100%b) Financial progress – 100%

Sub-Total (5) 49,300 49,300

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6. Other activities/Miscellaneous programs

i) Construction of Community Centre(Project cost: ` 40,55,000)(Carry-over project of FY 2013-14)

Start date: 07.06.2013Completion date: 06.04.2014 (10 months)(As per work order)


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

33,86,385 6,62,930 6,11,370(in FY 13-14)

+ 57,450(in FY 15-16)+

6,62,930 (in FY 16-17)= 13,31,750

Direct Construction work under progressa) Work done upto Roof level.b) Physical progress – 61.79%c) Financial progress – 32.84%d) Bills awaited.e) Balance work: Doors, Stair’s Railing, Plumbing, Sanitary, Plastering, Roofing, Electrical, Painting, Septic tank, Soak Pit, Boundary wall, Gate, etc.

ii) Miscellaneous Expenses (Tour, local tours, Transport, Engagement of Photographer & Messenger, etc.)

14,24,200 7,48,335 7,48,335 (in FY 16-17)

Direct

Sub-Total (6) 48,10,585 14,11,265 20,80,085

Grand Total 1,88,11,750 67,30,605

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MECON Limited

Annexure – I

TECHNOLOGY ABSORPTION

I. INDIGENOUSLY DEVELOPED TECHNOLOGY

Sl. No

Efforts made towards technology absorption.

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

1. Design Development of 4,250 m3 Blast Furnace (Loha)

Large Blast Furnace technologies in the country have been coming from international sources causing dependency on foreign suppliers and resulting in loss of foreign exchange.

Under the aegis of Governments flagship “Make in India” program, MECON is capable of complete design & engineering of 4,250 m3 Blast Furnace, entirely based on indigenous technology acquired over the years, vast in-house database and know-how.

2. Improved 1.0 MTPA Coke Oven Battery with 49.8 m3 hot oven volume (ANGARA 7.1)

It is development of 1 MTPA top charged Recovery type CO Battery of useful volume 49.8 m3 production & 7m. height.

Advantage of this type of Battery is

Increase in productivity

Production of Coke by utilizing less space & energy.

Less pollution

3. Design development of 1.2 Mt/yr Pellet Plant

Cost effectiveness with MECON’s 1.2 MTPA pellet plant module w.r.t. the same of global competitors

4. MECON Designed 5.0 M. Tall Coke Oven Batteries

The features are:-

Oven roof sliding joint between Silica & Fireclay (between 59th course & 60th course)

Sets of auxiliary springs for preventing dragging of fireclay over expanding silica

Provision of SS foil at oven roof (between 62nd & 63rd) course to prevent gas leakage & reduce heat loss at oven roof zone

Provision of SS foil at re-generator face between bulk head and insulation brick

Provision of catenaries for trolley line of changing car & DE car

5. Design optimization of NEST IN roof structure with cold formed Steel section

NEST IN is a light gauge steel frame construction solution, made of cold rolled high strength galvanized steel. The construction is thermally insulated by means of insulation between the internal and external rendering made of cement particle boards. The steel used in the house is 100% recyclable. The construction process is also almost dry and does not waste resources or pollute the environment to the extent the conventional methods do.

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6. Development of LabVIEW based temperature scanner. (Internal MoU Project for year 2016-17)

This device has simple setup and portability. The system can be utilized in a variety of ways for multichannel temperature sensing with the help of thermocouples. The temperature data also be stored in date & year wise format and can be retrieved any time for analysis. The current design can also be modified to build a temperature controller.

7. Indigenous portable ozone monitoring system for measurement of real time ozone concentration in and around industrial area of Ranchi. (Internal MoU Project for year 2016-17)

The benefit of the project is that the developed portable system will continuously monitor and record the data of ground level ozone concentration at desired location with minimum efforts and arrangements.

Expenditure incurred on Indigenously developed Technology through own R&D

Total expenditure incurred on R&D during the Financial Year 2016-17 amounts to `183.08 Lakh.

II. IMPORTED TECHNOLOGY

Sl. No



1. MOU signed with CSM, Italy for technology transfer for production of Cold Rolled Grain Oriented (CRGO) product of higher quality in the year 2015.

Basic guidelines for process technology has been obtained from CSM Italy. However, patent and IP is aimed for CRGO production by NML & consortium scientist.

Electrical Steels, both CRNO and CRGO are amongst premium earning and technology oriented products. The technology for production of CRGO steel is not readily available as only a handful of manufacturers produce CRGO The production technology is closely guarded, ‘IP’ protected and not accessible.

The Technology so far absorbed is limited to the report preparation.

- First phase limited only for DPR preparation. The DPR approval is under progress by the respective consortium members.

- Second phase is related to implementation phase which shall start after DPR approval.

Expenditure incurred on Imported Technology

Total expenditure booked by the Company on import of technology during the start of the Project. (` in Lakh)

F.Y 2015-16 F.Y 2016-17

` 136.47 ` 38.32

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MECON Limited

Annexure – II

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1.0 INTRODUCTION

It has been a rigorous voyage spanning over five decades positioning MECON as a formidable centre bearing core competence in providing know-how, engineering & consultancy services to Metals sector. The competence so acquired has been further consolidated through continuous upgradation and augmentation of engineering skill through technical collaborations with industry doyens. In order to overcome the perils of the cyclical pattern of Iron & Steel sector business, the company strategized to strengthen its operations in non-core business area e.g. Energy & Infrastructure. Transcendence of operation from its core competence area to areas like Energy & Infrastructure sector has been seamless, thanks to the preparedness built through the past decades. Company is also focusing its operation for delivering projects through EPC mode, in addition to its conventional portfolio of Consultancy & Project Management Services for improving its top and bottom lines.

In view of the opportunities thrown up by the Governmental initiative for inclusive growth through endeavours like National Steel Policy, Infrastructure development including health sector, PFA 24x7, MoEF stipulations on environmental norms etc., the company has initiated efforts for translating these opportunities to meaningful business. The exposure gained over 50 years in steel sector has helped the company to strengthen further on various facets of engineering discipline and is expected to generate dividends through the recent endeavours and also contribute to the engineering prowess while maintaining core competence in Iron & Steel sector.

2.0 SWOT ANALYSIS

Strengths

Core competence in the area of Metals and capability in providing end-to-end solutions, including Integrated Project Management in Greenfield/brown-field projects of various magnitudes

Consultancy, Design and Detailed Engineering capabilities in our functional business areas

Capability in equipment & system design and supply & execution in Ferrous area

Multi-disciplinary highly experienced and capable pool of engineers/technologists in various specialized technical disciplines

Vast knowledge repository and reference materials

Strategic Tie-ups for business competitiveness and better market penetration

Good credentials with financial institutions and regulating authorities

Low average age of employees due to induction of young professionals

Wide network of offices at various locations across the country

Capability in environmental impact assessment & environmental management plans

In-house Environmental Engg. Laboratory which is recognized under Environment Protection Act, 1986 renders its services for sampling, testing & analysis of air, water, noise, sewage and soil quality

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to various Plants in Steel and other Sectors both in private and public. Initiatives have been taken to modernize and expand Environmental Engineering Laboratory by installing sophisticated instruments.

NABET/ QCI Accreditation for 16 sectors includes Mining, Onshore & offshore oil & gas exploration, River valley and hydel projects, Thermal power plants, Coal washeries, Mineral Beneficiation, Metallurgical industries, Cement Plant, Coke Oven Plants, Oil & Gas transportation Pipelines, Isolated Storage, Ship Breaking Yard, Industrial Estate, Ports & Harbour, Highways & railways, Area Development & Township Projects.

Weaknesses

High manpower & overhead costs as compared to some of the competitors, especially in private sector.

Skewed organization structure with sparsely manned middle level manpower.

Depletion of critical knowledge / skills on account of superannuation / separation of experienced manpower.

Moderate commercial acumen in technical departments.

Opportunities

Anticipated future investments in mining, beneficiation, agglomeration / pelletisation, slurry transportation and coal washeries.

Possible future investment in Steel sector in view of the National Mission of 300 MT Crude Steel Capacity by 2030-31.

Large scale investments in other diversified sectors viz. oil & gas, infrastructure & strategic sectors and power transmission & distribution & renewable energy sector

Leveraging past experience in defence sector to harness new opportunities emanating with the opening of Defence Production Manufacturing sector for participation of private sector (FDI hiked to 49%).

Expansion in ports, power and mining sector are expected to offer associated Material Handling Projects and your Company expects to generate business from this sector, both on its own credentials and also through joint participation with other Companies.

Rapid urbanization and Governmental policy thrust for provision of drinking water facilities in urban areas offers another business opportunity. In the past, your Company has carried out engineering of a large number of in-plant water supply projects and has also made in-roads in infrastructure water supply projects. As such, business opportunity exists in the area of inter-city drinking water supply, Urban Water Supply, Water Treatment and Sewage Disposal projects.

Growing business opportunities in Environment Management

Development in sectors such as Green technologies, nuclear power, water management, slurry & water pipelines, sea water desalination plants, LNG terminals etc.

Threats

Mushrooming of consultancy companies operating at low margins.

Presence of Indian set-up of all major Multi-national companies like SMS, Siemens, Danielli, Kobe Steel, etc providing comprehensive services including Engineering

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MECON Limited

Private sector, in particular, opting for engineered packages from the turnkey suppliers, without engagement of external consultants

Stringent technical pre-qualification criteria for consultancy as well as supply jobs

Recent decline in investment in the core area of Metals but continued dependence on Metals sector

Uneven playing ground for public & private sectors

Today’s consortium partners emerge as future Competitors.

3.0 BUSINESS OUTLOOK

Global Economic Outlook

The world economy gained momentum in the fourth quarter of 2016 which is expected to persist. With buoyant financial markets and a long-awaited cyclical recovery in manufacturing and trade under way, world growth is projected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018. Stronger activity, expectations of more robust global demand, reduced deflationary pressures, and optimistic financial markets are all upside developments. But structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside, especially over the medium term, remain important challenges.

The outlook for advanced economies has improved primarily driven by higher projected growth in the United States, where activity was held back in 2016 by inventory adjustment and weak investment. The improved growth reflects the assumed fiscal policy easing and an uptick in confidence, especially after the November elections, which, if it persists, will reinforce the cyclical momentum. Since the U.S. election, expectations of looser fiscal policy in the United States have contributed to a stronger dollar and higher U.S. Treasury interest rates, pushing up yields elsewhere as well. Market sentiment has generally been strong, with notable gains in equity markets in both advanced and emerging market economies. Stronger activity and expectations of more robust global demand going forward, coupled with agreed restrictions on oil supply, have helped commodity prices recover from their troughs of early 2016. Headline inflation has been picking up in advanced economies due to higher commodity prices, but core inflation dynamics remain subdued and heterogeneous (consistent with diversity in output gaps). Core inflation has improved little where it had been the weakest (for instance, in Japan and parts of the euro area). The outlook has also improved for Europe and Japan based on a cyclical recovery in global manufacturing and trade that started in the second half of 2016.

Growth prospects for emerging market and developing economies have marginally worsened due to weaker outlook in several large economies, especially in Latin America and the Middle East, reflecting continued adjustment to the decline in their terms of trade in recent years, oil production cuts, and idiosyncratic factors. The 2017 and 2018 growth forecasts have been marked up for China, reflecting stronger-than-expected policy support, as well as for Russia, where activity appears to have bottomed out and higher oil prices bolster the recovery. Headline inflation has also picked up in many emerging market and developing economies due to higher commodity prices, but in a number of cases it has receded as pass-through from the sharp currency depreciations in 2015 and early 2016 continues to fade.

However, there are many downside risks especially over the medium term. The protectionism measures adopted in many countries are acting as structural obstacle to a stronger global recovery and

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growth caused by reduced trade and cross-border investment flows. The hike in interest rates in the USA could trigger a rapid tightening in global financial conditions and a sharp dollar appreciation, with adverse impact on vulnerable economies including parts of the euro area. Some emerging market economies, may undertake rollback of financial regulation, which could spur excessive risk taking and increase the likelihood of future financial crises. The increasing vulnerabilities in China’s financial system associated with fast credit growth may lead to financial tightening in emerging market economies. High levels of excess capacity in some advanced economies as well as continued balance sheet weaknesses in some emerging market economies are also some of the key concerns.

Policy choices will therefore be crucial in shaping the outlook and reducing risks. Priorities for macroeconomic demand management are increasingly differentiated, given the diversity in cyclical positions. In economies with slack and persistently weak core inflation, cyclical demand support remains necessary, including to stave off pernicious hysteresis effects. In economies where output is close to or above potential, fiscal policy should aim at strengthening safety nets and increasing potential output. At the same time, credible strategies are needed in many countries to place public debt on a sustainable path. Following a lackluster recovery from the global financial crisis, and in the aftermath of the sharp adjustment of global commodity prices, many economies are seeking to enhance growth potential, inclusiveness, and resilience. Actions to bolster potential output are indeed urgent given persistent headwinds from population aging in advanced economies, the ongoing adjustment to lower terms of trade and the need to address financial vulnerabilities in emerging market and developing economies, as well as sluggish total factor productivity growth in both groups.

Technological change has been the dominant driver of the labour share in advanced economies whereas trade integration (and the attendant increase in the capital intensity of production) has been the dominant driver in the case of emerging market economies. These findings highlight the need to make growth more inclusive. Possible policy levers include more progressive taxation; investments in skills, lifelong learning, and high-quality education; and other efforts to enhance the occupational and geographical mobility of workers to ease and hasten labour market adjustments to structural transformations. Many of the challenges that the global economy confronts call for individual country actions to be supported by multilateral cooperation. Key areas for collective action include preserving an open trading system, safeguarding global financial stability, achieving equitable tax systems, continuing to support low income countries as they pursue their development goals, and mitigating and adapting to climate change

Indian Economy & Steel SectorFollowing liberalization, the Indian economy is also integrated with the global economy. As such, both global and domestic developments are influencing the growth of the Indian economy.

Against the backdrop of robust macro-economic stability, the year 2016-17 was marked by two major domestic policy developments, the passage of the Constitutional amendment, paving the way for implementing the transformational Goods and Services Tax (GST), and the action to demonetize the two highest denomination notes. The GST will create a common Indian market, improve tax compliance and governance, and boost investment and growth. Demonetization has had short-term costs but holds the potential for long term benefits. Follow-up actions to minimize the costs and maximise the benefits include: fast, demand-driven, remonetization; further tax reforms, including

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bringing land and real estate into the GST, reducing tax rates and stamp duties; and acting to allay anxieties about over-zealous tax administration. These actions would allow growth to return to trend in 2017-18, following a temporary decline in 2016-17.

With the fillip provided by the country’s policy mechanism thrusts backed by a strong economic foundation, a rising domestic supply side, stable end-use segments, large scale infrastructure investments and optimistic economic projections, future prospect of Indian economy appears to be bright. Moreover, Government of India has given special thrust on the industry and infrastructure sector as a whole by the ambitious “MAKE IN INDIA” programme which is likely to put thrust on infrastructure / industrial development and hence, huge investment is expected in sectors like steel, power, roads, railways, ports, civil aviation, telecommunications, irrigation, drinking water, sanitation, storage & warehousing etc. This will help in achieving a robust and inclusive growth in future.

Industrial growth measured by Index Number of Industrial Production (INIP) has shown no recovery in April-January, 2016-17 (stagnated at -0.2%) compared to the same period during 2015-16. Within industry, electricity sector performed better with a growth of 7.1% during April-January, 2016-17. Consumer durable grew by 0.7% during April-January, 2016-17. The manufacturing sector as a whole remains the cause of worry for the economy.

On the front of industrial production during April-January, 2016-17, coal production grew by 5.1% and cement production grew by 7.4%. Fertilizer sector has shown substantial improvement registering a growth of 8.6%. Major sectors like steel, crude oil, natural gas, etc have shown low or negative growth of production.

Crude steel production reached at 97.443 Mt in April-March, 2016-17 registering growth of 8.5 % compared to same period of previous year. Post imposition of Minimum Import Price (MIP) on select steel products in Feb, 2016, imports declined substantially by 38.3% while exports increased by 102.1%, thus making India net exporter of steel. Production of pig iron declined to 9.968 Mt during April-March, 2016-17 with a decline of 2.7% compared to the same period of previous year.

The Company’s business procurement in diversified sector has shown an improvement whereas it was moderate in its core area of Ferrous and Non-Ferrous sectors. As Indian economy gather momentum in 2017-18 and this trend is likely to continue in future as per forecasts, the business procurement prospect for the company is expected to be encouraging in the forthcoming year 2017-18.

BUSINESS PROCUREMENTTotal ` in Crore

2015-16 2016-17

SBU Consultancy EPC SBU Consultancy EPC

Metal 78.78 72.18 Metal 96.70 539.00

Power 49.52 46.86 Energy 207.09 6.57

Oil & Gas 68.05 Nil Infrastructure 39.50 529.80

Infrastructure 139.53 228.48

Total (`) 335.88 347.52 Total (`) 343.29 1075.37

Grand Total (`) 683.40 Grand Total (`) 1418.65

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4.0. INTERNAL CONTROL SYSTEM AND ADEQUACY THEREOF

MECON LIMITED not only has a proper and adequate system of internal control and proper documented procedure encompassing all financial and operating functions but also a history and tradition bequeathed since inception.

These have been planned to provide reasonable accuracy for maintenance of proper accounting and adequate control to monitor and to govern the company’s fund, to optimize internal resources for increasing operational efficiency, to secure assets from unauthorized use and to ascertain reliance on financial and all other operational information.

The company has undertaken unified untiring team effort to achieve the best possible state-of-the art system.

Salient facets of the internal control system are:

Well defined delegation of power with sanctioning limits for purchasing of capital items and approving of revenue expenditure.

Well framed policies on capital asset procurement.

Well planned budget for capital & revenue expenditure and continuous monitoring.

Well defined Purchase and Disposal Procedure to carry out function of purchase encompassing various Government and CVC guidelines for in-house procurement as well as procurement of services and goods for executing EPC jobs and consultancy jobs.

Well framed MECON Establishment Manual and Service Rules to codify rules and policies governing service conditions of employees.

Well codified Apex Quality Manual for ensuring quality of services provided and goods sold for executing EPC jobs.

Periodical meeting at all functional levels and also at corporate level for reviewing and achieving the targeted results.

With implementation of online information system starting from raising of invoices to collection of money, the entire system has been made more effective in terms of furnishing factual information in shortest possible time.

Well defined plan to invest surplus fund most judicially and reporting thereof to the Apex management regularly.

The company has an extensive programme of carrying out internal audits, management and financial reviews to ensure greater efficiency, transparency and accountability.

Quarterly Internal Audit reports comprising of significant audit observations and follow-up actions thereon are placed before the Audit Committee for their consideration and review.

5.0 DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCEDuring the Financial Year 2016-17, MECON LIMITED achieved Turnover of ` 34,292.91 lakh. Turnover from Consultancy Jobs is ` 26,176.23 lakh, mainly from execution of consultancy order for NMDC, different Steel Plants of SAIL, etc. Turnover from Consultancy Jobs constituted 76.33%

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of the total turnover and turnover from Turnkey Projects constituted 23.67% of total turnover. Total turnover has increased by 8.09% over the previous year.

Loss after tax for the year 2016-17 is `8,384.35 lakh compared to Loss after tax of `16,241.38 lakh of the previous year. Interest and Finance Costs is decreased by `34.66 lakh.

During the Financial Year 2016-17, the company has earned interest of `4,419.22 lakh through term deposits with scheduled banks.

The highlights of financial performance of the company for the financial year 2016-17 w.r.t. 2015-16 are mentioned below.

(` in Lakhs)

Sl. No. Particulars FY

2016-17FY

2015-16

a) Turnover 34,292.91 31,727.69

b) Interest from Bank 4,419.22 5,609.11

c) Employee Benefit Expenses 29,178.33 31,076.63

d) Purchase of Equipments & Direct Expenses 11,345.53 14,764.04

e) Other Expenses 7,670.02 10,780.53

f) Loss Before Tax 8,814.26 17,470.48

g) Loss After Tax 8,384.35 16,241.38

h) Fixed Assets including capital work in progress (Gross Block) 17,056.83 17,859.74

i) Cash and Bank Balances 55,043.09 53,943.71

j) Job-in-Progress 613.56 741.27

k) Trade Receivables (Current & Non Current) 28,285.05 24,708.22

l) Trade Payables (Current & Non Current) 20,012.16 17,564.05

m) Loans and Advances(Current & Non Current) 15,435.38 12,864.09

n) Other Assets & investment (Current & Non Current) 7,735.44 14,184.93

o) Other Liabilities & Borrowings (Current & Non Current) 80,199.76 72,483.35

p) Net Worth 15,137.35 23,521.70

q) Share Capital 4,013.84 4,013.84

r) Capital Employed 9,528.65 18,123.57

Greater proportion of consultancy turnover out of total turnover has contributed to improve the financial performance of the company. Beside, reduction in employee benefit expenses by 1898.30 lakh and reduction in other expenses by `3110.51 lakh have contributed to improve the position as well.

The Net Worth of the company has reduced by `8,384.35 lakh compared to previous year.

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6.0 HUMAN RESOURCE DEVELOPMENT

In a knowledge based company Services, Processes and Business Models can be copied, but the organizational competence i.e. the Human Capital is unique in nature. In view of this the management lays emphasis to focus and sustain a competent and highly responsive workforce with adequate domain expertise. Accordingly it has organized training towards Performance Management, Career Advancement through multiple role exposures and Knowledge Management framework. Further projects being the centre of our delivery mechanism, management arranged workshops and trainings on selection of Technology & Product Mix, Methodology of Contract Closure and Risk Analysis & Mitigation in Projects. To bring about an overall development of our future leaders, to enable them to unleash potential for necessary business impact along with technical capabilities augmentation, management organized training in Soft Skills, Personality and Leadership Development. Regular Knowledge Management sessions are also conducted to effectively disseminate and utilize organizational knowledge. Management always strives to focus towards development of its employees with the objective that they will lead the company through challenging environment and ensure that sustained value creation is achieved. With this objective lot of HRD activities were undertaken in the FY 2016-17 as detailed in Directors’ Report. Management has achieved 1776 Man days of training and development as against the target of 1300 Man days fixed for this financial year.

7.0 TECHNOLOGICAL UP-GRADATION

Technological and Engineering excellence achieved through continuous process of acquiring, absorbing and innovating state-of-the-art technology constitutes the core strength of MECON. Direct transfer of technology through participation in projects in association with industry leaders has remained a consistent source of knowledge up-gradation. License agreements and general collaboration/ cooperation agreements with organisations sharing common business interests is providing an impetus for MECON to achieve a win-win situation. Such initiatives are complementing knowledge acquisition in addition to building-up database for focussed business areas with the aim to bridge the identified technology gap. Measures adopted to work towards technology self reliance include:

i) Exposure to global technology and tie-up in potential areas.

ii) Need based empanelment of experts.

iii) Recruitment of experienced personnel.

iv) In-house engineering Research & Development.

v) Access to modern tools for analysis, design, drafting and inspection.

vi) Training – both in-house and outside.

vii) Cost effective operations achieved through higher reliance on state-of-the-art software tools.

viii) Enhancing productivity, timely completion of projects and with better quality.

8.0 CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY DEVELOPMENT (CSR & SD)

MECON has undertaken a number of projects / activities as a part of its Corporate Social Responsibility & Sustainability under its CSR & Sustainability Policy. The details of the project / activities taken up during 2016-17 are given under Director’s Report.

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The Management of the Company always lay thrust upon timely completion of the CSR projects / activities so that its benefit is passed on to the end user. Moreover the Management also lays emphasis, that regular on-going schemes such as free literacy programme in Community Education Centre, free stitching training under Women Empowerment Scheme, Vocational training under Vocational Training Scheme, free health camp through mobile ambulance van etc. shall also be continued to keep CSR & Sustainability activity of the Company alive even when there is less or no allocable budget available as per Act.

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Annexure - III

REPORT ON CORPORATE GOVERNANCE

1.0 COMPANY’S PHILOSOPHY:

The Company’s Corporate Governance practice is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to values that governs relationship with all its stakeholders and attaining maximum level of enrichment of the enterprise. The said practice of Corporate Governance stem from its professionalism. MECON lays emphasis on the proper conduct of its activities and enhance the value of all those who are associated with the Company viz. Shareholders, Customers, Vendors, Government of India, Ministry of Steel, Department of Public Enterprises, various State Governments, other Government Agencies / Departments and the society at large.

2.0 BOARD OF DIRECTORS:

Your Company being a Central PSU, appointment / nomination of all Directors is done by the President of India, through the Ministry of Steel. The Chairman and Managing Director and Functional Directors are appointed by the Government of India, Ministry of Steel for a period of five years or till the age of superannuation or until further orders whichever is earlier. Part-time Independent Directors are normally appointed for a tenure of three years. Articles of Association of the Company stipulate that the number of Directors shall not be less than five and not more than thirteen. The composition of the Board is as per DPE Guidelines on Corporate Governance.

Composition of Board of Directors

Sl.No.

Particulars of DirectorsSanctioned

StrengthActual position as

on 31.03.2017

i. Functional Directors including CMD (WTD) 5 4

ii. Part-time Government Directors 2 2

iii. Part-time Independent Directors 3 1*

Total 10 7

(*) The sanctioned strength of Part-time Independent Director on the Board of the Company is three (3). One Part-time Independent Director was appointed by the Government of India during F.Y 2015-16. The balance two (2) posts of Part-time Independent Director are lying vacant since January, 2014

2.1 Terms & Conditions of appointment of Board Member :

The terms, conditions and tenure of appointment of all Board Members is decided by the Government of India, Ministry of Steel.

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2.2 Remuneration / Compensation to Board of Directors :

The Chairman and Managing Director and Whole-time Directors are paid monthly remuneration as fixed by the Government of India. The Company bears all the expenditure of the Part-time Government Directors and Part-time Independent Directors for attending the meetings. Part-time Government Directors are not paid any remuneration.

The Part-time Independent Directors are paid sitting fees of ` 10,000/- per meeting of the Board /Committee attended by them.

The details of sitting fees paid to the Part-time Independent Director during FY 2016-17 are as follows.

Name of Director (Shri)

Sitting Fees (`) Total (`)

Board Meeting Committee Meetings

Sisir Kumar Appikatla 50,000 60,000 1,10,000

2.3 Board Meetings:

The Board meets statutorily and also as many times as may be warranted. The Board Meetings are convened as per the Companies Act, 2013 by giving appropriate advance notice after seeking approval of the Chairman of the Board. Detailed agenda notes are circulated in advance as per the Companies Act, 2013 to the Board Members for facilitating meaningful, informed and focused decision at the meeting. In case of special and exceptional circumstances additional agenda item(s) is / are also permitted with the consent of Chairman of the Board.

The Board of Directors oversees all major actions proposed to be taken by the Company. The Board also reviews and approves the strategic and business plans including monitoring corporate performance.

The Board and Committee Meetings are held not only at Company’s Registered Office at Ranchi, but also at its Engineering Office at New Delhi. The Company Secretary acts as the Secretary to the Board Meetings.

2.4 Number of Board Meetings:

During the year 2016-17, Five (5) Meetings were held, the details of which are given below:

Sl. No. Date of Meeting Board Strength Number of Directors Present

1 04.07.2016 8 8

2 23.08.2016 8 7

3 26.09.2016 8 8

4 28.11.2016 7 7

5 22.02.2017 6 6

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Particulars of the Directors including their attendance at the Board Meetings from 1st April, 2016 to 31st March, 2017.

Name of Directors No. of Board Meetings held.

No. of Board Meetings attended.

I Whole time Directors

1. Shri A.K. Tyagi Chairman–cum-Managing Director (upto 30.09.2016)

Three Three

2. Shri Atul Bhatt Chairman and Managing Director (w.e.f. 01.10.2016)

Two Two

3. Shri S. Chattopadhyay Director (Project) Five Five

4. Shri. Deepak Dutta Director (Commercial) (Upto 31.10.2016)

Three Three

5. Shri S.R. SenguptaDirector(Technology) (Upto 31.12.2016)

Four Four

6. Shri A.P. SinghDirector (Engineering)(Upto 31.12.2016)

Four Four

7. Shri P.K. SarangiDirector (Technical) (w.e.f. 01.01.2017)

One One

II. Part-time Government Directors

1. Smt Bharathi S. Sihag, IASSS&FA to the Govt. of India,Ministry of Steel. (Upto 30.11.2016)

Four Three

2. Shri Saraswati Prasad, IASAS&FA to the Govt. of India,Ministry of Steel. (w.e.f. 08.02.2017)

One One

3. Shri Syedain Abbasi, IAS Joint Secretary to the Govt. of India, Ministry of Steel.

Five Five

III. Part-time Independent Director

1. Shri Sisir Kumar Appikatla Five Five

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3.0 BOARD COMMITTEES:

3.1 Audit Committee

The Audit Committee in place as on 31.03.2017 consists of one Part-time Government Director, one Part-time Independent Director and one whole-time Director. The Chairman of the Audit Committee is a Part-time Government Director. The Audit Committee as on 31.03.2017 comprises of the following Directors.

Members of the Audit Committee as on 31.03.2017 are :-

Sl.No. Name of Directors (Shri) Status in Audit Committee

1 Syedain Abbasi, IAS, Director and Joint Secretary to Govt. of India, Ministry of Steel.

Chairman

2 Sisir Kumar Appikatla, Director Member

3 Subir Chattopadhyay, Director (Project) Member

Role and Powers of the Audit Committee.

The role and powers of the Audit Committee are as per Section 177 of the Companies Act, 2013 as well as the Guidelines on Corporate Governance for CPSE issued by the Govt. of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises. The Company Secretary acts as the Secretary to the Audit Committee.

Number of Audit Committee Meetings.

During the year 2016-17, Five (5) Meetings were held, the details of which are given below:

Sl.No Date of Meeting Member’s Strength No. of Members Present

1 04.07.2016 Three Three





Particulars of the Directors including their attendance at the Audit Committee Meetings from 1st April, 2016 to 31st March, 2017.

Name of Directors Period No. of Audit Committee

Meetings held.

No. of Audit Committee

Meetings attended.

Shri Syedain Abbasi, IAS, Director & Chairman, Audit Committee.

05.04.2016 to 31.03.2017

Five Five

Shri Sisir Kumar Appikatla, Director & Member, Audit Committee.

01.04.2016 to 31.03.2017

Five Five

Shri S. Chattopadhyay Director (Project) & Member, Audit Committee.

01.04.2016 to 31.03.2017

Five Five

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3.2 Remuneration Committee

The Remuneration Committee was earlier constituted with three Part-time Independent Directors. The Chairman of the Remuneration Committee was Part-time Independent Director.

The tenure of appointment of all the Part-time Independent Directors was completed in January, 2014. Since then only one Part-time Independent Director was appointed by the Government of India. The reconstitution of Remuneration Committee is to be considered on appointment of other two Part-time Independent Directors.

3.3 Corporate Social Responsibility (CSR) and Sustainability Committee

In compliance of the provisions of Section 135 of the Companies Act, 2013 read with Guidelines on Corporate Social Responsibility and Sustainability for CPSEs issued by the Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises which came into force w.e.f. 01.04.2014, a Board level CSR & Sustainability Committee was constituted. The role and functions of the CSR & Sustainability Committee is as per Companies (Corporate Social Responsibility Policy) Rules 2014.

The present CSR & Sustainability Committee in place as on 31.03.2017 comprises of the following Directors.

Sl. No. Name of Directors (Shri) Status in CSR & Sustainability Committee

1 Syedain Abbasi, IAS, Director and Joint Secretary to Govt. of India, Ministry of Steel.

Chairman

2 Sisir Kumar Appikatla, Director Member

3 P. K. Sarangi, Director (Technical) Member

The Company Secretary acts as the Secretary to the CSR & Sustainability Committee.

Number of CSR & Sustainability Committee Meetings :

During the year 2016-17, Four (4) Meetings were held, the details of which are given below:

Sl.No Date of Meeting Member’s Strength No. of Members Present





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MECON Limited

Particulars of the Directors including their attendance at the CSR & Sustainability Committee Meeting.

Name of Directors Period No. of CSR & Sustainability

Committee Meetings held.

No. of CSR & Sustainability

Committee Meetings attended.

Shri Syedain Abbasi, IAS, Director & Chairman, CSR & Sustainability Committee.

01.04.2016 to

31.03.2017

Four Four

Shri S.R. Sengupta,Director (Technology) & Member, CSR & Sustainability Committee.(Upto 31.12.2016)

01.04.2016 to

31.12.2016

Three Three

Shri. A.P. Singh, Director (Engineering) & Member, CSR & Sustainability Committee. (Upto 31.12.2016)

01.04.2016 to

31.12.2016

Three Three

Shri. Sisir Kumar Appikatla, Director & Member, CSR & Sustainability Committee. (w.e.f. 10.02.2017)

10.02.2017 to

31.03.2017

One One

Shri. P.K. Sarangi, Director (Technical) & Member, CSR & Sustainability Committee. (w.e.f. 10.02.2017)

10.02.2017 to

31.03.2017

One One

3.4 Part time Independent Directors Meeting

Since only one part-time Independent Director has so far been appointed in the FY 2016-17, no meeting of Part-time Independent Director was held during the period under review.

4.0 GENERAL BODY MEETING :

The details of the last three Annual General Meeting of the company are as follows:-

Year Date Time Venue

2013-14 10th Oct., 2014 12.30 PM Hotel Ashok, Chanakyapuri, New Delhi - 110107.

2014-15 22nd Sept., 2015 12.00 NOON Hotel Royal Plaza, Ashok Road, New Delhi - 110107.

2015-16 22nd Aug., 2016 2.00 P.M Board Room, MECON Office, 13th Floor, SCOPE Minar,Laxmi Nagar, Delhi - 110092

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5.0 DISCLOSURES:

5.1 Declaration of independence by Independent Director

In compliance of Sec 134(3)(d) of the Companies Act, 2013 the Company has obtained declaration of independence from the Independent Director for the FY 2016-17 under Section 149(6) of the said Act.

5.2 Related party transactions

There are no ‘materially significant related party transactions’ that may have a potential conflict with the interest of Company at large. The details of Related Party Disclosure as per AS-18 is disclosed under Note 35.12 of the Financial Statement.

5.3 Disclosure of accounting treatment

All applicable Accounting Standards issued by the Institute of Chartered Accountants of India are being followed in the preparation of financial statements. The Significant Accounting Policy of the Company is disclosed under Note 32 of the Financial Statement.

5.4 Compliance Certificate

A certificate on compliance of applicable laws is placed before the Audit Committee and Board on quarterly basis.

5.5 Code of ConductThe Board of Directors has laid down the Code of Business Conduct and Ethics for the Board Members and Senior Management of the Company. The Code is displayed on the website of the Company. All Board Members and Senior Management officials of the company have affirmed their compliance with the code.

6.0 MEANS OF COMMUNICATION:

Annual Report containing Chairman’s Speech, Directors’ Report, Management Discussion and Analysis Report, Corporate Governance Report, Auditor’s Report, Audited Accounts and other important information are made available on the website of the Company.

7.0 TRAINING OF BOARD MEMBERS:

Directors are being nominated, as and when required for the training programme organized by DPE, SCOPE etc.

8.0 WHISTLE BLOWER POLICY:

The Company has established Whistle Blower Policy in accordance with the requirement of Section 177(9) of the Companies Act, 2013 and the same is uploaded on the website of the Company.

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MECON Limited

INDEPENDENT AUDITORS' REPORT

To,The Members ofMECON LIMITED

Report on the Financial Statements

We have audited the accompanying Financial Statements of MECON LIMITED, ("the Company"), which comprises the Balance Sheet as at March 31st, 2017 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the Internal financial control relevant to the company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2017;

(b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) as amended, issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(5) of the Act, the Comptroller and Auditor General of India issued Directions and sub-directions. We give our comment thereon vide Annexure –B.

3. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) In terms of Govt. of India, Department of Company affairs Notification No. GSR 463(E) dated 5th June 2015, Govt. Company is exempt from applicability of provision of section 164(2) of the Companies Act 2013.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “ Annexure C” and

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as ammended, in our opinion and to the best of our information and according to the explanations given to us:

I. The Company does not have any pending litigations which would materially impact its financial position.

II. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses on long term contracts.

III. The Company has no amount that is required to be transferred to the Investor Education and Protection Fund.

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MECON Limited

IV. The Company has provided requisite disclosure in the financial statements as regards its holding and dealing in Specified Bank Notes as defined in the Notification S.O. 3407 (E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management. Refer Note 35.23 of the financial statements.

For. V. Rohatgi & Co. Chartered Accountants, Firm Registration No: 000980C

Sd/- (Bipul Rastogi) Partner M. No. 072318

Place : RanchiDated : 14 July 2017

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ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT(Referred to in Paragraph 1 of Our Report On Other Legal and

Regulatory Requirements)

(i) In respect of its fixed assets :

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets except in respect of some cases wherein the fixed assets register and records are in the process of updation.

(b) The fixed assets of the Company have been physically verified by the management. In our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its business.

(c) The title deeds of the Immovable Properties are held in the name of the Company as certified by the management except Deed of conveyance of Land at Ranchi, measuring 10.25 acres, valued for Rs. 2.69 lakhs, which is pending since long for execution by the Government of Jharkhand.

(ii) In respect of physical verification of Inventory :

(a) The inventories have been physically verified by the management during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory. No material discrepancies have been noticed on verification between the physical stocks and the book records.

(iii) In our opinion and according to the information and explanations given to us, the company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence clause (a) to (b) is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and guarantees and not made any investments in respect of Section 185 & 186 of the Companies Act, 2013.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any public deposits during the year hence clause (v) is not applicable to the Company. Accordingly the directives issued by the RBI and provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under are not applicable.

(vi) According to the information given to us, the Central Government has not prescribed maintenance of cost records under section 148(1) of the Companies Act , 2013.

(vii) According to the information and explanations given to us in respect of statutory and other dues :

a) The Company has generally been regular in depositing undisputed statutory dues, in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Value

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MECON Limited

Added Taxes, Wealth Tax, Customs duty, Excise Duty, Cess and other material Statutory Dues with the appropriate authorities.

b) According to the information and explanations given to us, there are no undisputed statutory dues outstanding for a period of more than six months from the date they became payable, as per books of accounts as at 31st March, 2017

c) According to the information and explanations given to us, there disputed statutory dues, which have not been deposited as at 31st March 2017, as given herein below:

Name of the Statute Period to which relates

Forum Amount (` in lakhs)

Central Sales Tax Act and Sales Tax Acts of Various States

1999-2000 STAT, Andhra Pradesh. 4.41

2000-2001 STAT, Andhra Pradesh 101.40

2001-2002 Andhra Pradesh. High Court 450.88

1995-1996 Commissioner of Commercial Taxes, Ranchi 258.12




2009-2010 Jharkhand Commercial Tax Tribunal 27.66

1993-1994,1994-1995 &1996-1997

JCCT(Appeal), Dhanbad 0.67



1996-1997 Joint Commissioner of Comm. Taxes (Appeal), Jamshedpur 1.92

*1994-1995 Jharkhand Sales Tax Tribunal 219.10

*2003-2004 Addl. Commissioner, Kolkata 16.47

2006-2007 Jharkhand Commercial Tax Tribunal ( Appeal) 9.76

2007-2008 Jharkhand Commercial Tax Tribunal (Appeal) 26.16

2010-2011 J. Commissioner of commercial Taxes, (Ranchi) 217.29

2011-2012 J. Commissioner of Commercial Taxes, (Ranchi) 535.81

Employees Provident Fund and Misc. Provisions Act 1952

2003-2004 EPF, Appellate Tribunal, New Delhi 229.70

Out of the above disputed statutory dues in the two cased marked *provision has been made in the books of accounts under “ Provision for Disputed cases – sales tax matter.

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viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the year.

ix) According to the information and explanations given by the management and the audit procedures performed, the company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loan during the year.

x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

xi) According to the information and explanation given to us and based upon the audit procedure performed, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provision of section 197 read with Schedule V of the Companies Act, 2013.

xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi Company. Therefore the provisions of Clause 3 (xii) of the Order are not applicable to the Company.

xiii) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with Section 177 & 188 of the Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us and based upon the audit procedure performed, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv) According to the information and explanations given to us and based upon the audit procedure performed, the company has not entered into any non cash transactions with the directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi) In our opinion, the company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For. V. Rohatgi & Co. Chartered Accountants, Firm Registration No.: 000980C

Sd/-

(Bipul Rastogi) Partner M. No. 072318

Place : RanchiDated : 14 July 2017

88

MECON Limited

ANNEXURE - B TO THE INDEPENDENT AUDITORS’ REPORT OF MECON LIMITED FOR THE YEAR 2016-17

Directions under section143(5) of Companies Act, 2013 Referred to in paragraph 2 of our report

S. No. Question Reply

1 Whether the company has clear title / lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title/ lease deeds are not available

1. We have examined the title/ lease deed of free hold and lease hold land, which was made available.

2. Deed of conveyance of Land at Ranchi, measuring 10.25 acres, valued for Rs. 2.69 Lakhs, is pending for execution by Govt. of Jharkhand.

3. As informed there is no land under dispute.

2 Whether there are any cases of waiver/ write off of debts/ loans/ interest etc., if yes, the reason thereof and amount involved.

Book Debts outstanding for more than three years amounting to Rs.1.90 Lakhs is written off during the year considering it unrealisable.

3 Whether proper records are maintained for inventories lying with third parties & assets received as gift/ grant(s) from Govt. or other authorities.

As informed to us no inventory is lying with third parties. The company has not received any gift from government or other authorities during the year.

89



“ANNEXURE C” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON FINANCIAL STATEMENTS OF MECON LIMITED.

Report on Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of MECON LIMITED (“the company”) as on 31st March, 2017 in conjunction with our audit of the financial statements of the company for the year ended on that date.

MANAgEMENT’S RESPONSIBILITy FOR INTERNAL FINANCIAL CONTROLS

The company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AuDITORS RESPONSIBILITy

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial control system over financial reporting.

90

MECON Limited

MEANINg OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTINg

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

INhERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTINg

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For V. Rohatgi & Co. Chartered Accountants Firm Registration Number:000980C

Sd/-

(Bipul Rastogi) PartnerPlace: Ranchi M. No. 072318Date : 14 July 2017

91



COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(B) OF THE

COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF MECON LIMITED FOR THE YEAR ENDED 31 MARCH 2017

The preparation of financial statements of MECON Limited for the year ended 31 March 2017 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 14 July 2017.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of MECON Limited for the year ended 31 March 2017. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors' report.

For and on the behalf of the Comptroller and Auditor General of India

(Indu Agrawal) Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Ranchi.

Place : RanchiDated : 18 August 2017

92

MECON Limited

BALANCE SHEET AS AT 31ST MARCH, 2017 (` in lakhs)

PARTICuLARS NOTE NO. AS ON 31.03.2017 AS ON 31.03.2016 I. EQuITy AND LIABILITIES

(1) Shareholders' Funds(a) Share Capital 1 4,013.84 4,013.84(b) Reserves & Surplus 2 11,123.51 21,726.12(c) Money received against share warrants - 15,137.35 - 25,739.96

(2) Share Application money pending allotment - -(3) Non-Current Liabilities

(a) Long-Term Borrowings 3 - -(b) Deferred Tax Liabilities (Net) 4 - -(c) Other Long-Term Liabilities 5 16,566.21 12,739.76(d) Long-Term Provisions 6 33,354.16 49,920.37 29,393.16 42,132.92

(4) Current Liabilities(a) Short-Term Borrowings 7 - -(b) Trade Payables 8

(A) Total outstanding dues of micro enterprises and small enterprises

1,479.42 1,438.03

(B) Total Outstanding dues of creditors other than micro enterprises and small enterprises

11,298.34 11,052.83

(c) Other Current Liabilities 9 19,065.50 19,439.35(d) Short-Term Provisions 10 18,448.29 50,291.55 15,984.27 47,914.48

TOTAL 1,15,349.27 1,15,787.36II. ASSETS(1) Non-Current Assets

(a) Fixed Assets(i) Tangible Assets 11 7,916.45 8,846.83 (ii) Intangible Assets 12 254.79 181.51 (iii) Capital Work-in-Progress 13 65.51 316.80 (iv) Intangible Assets under development - -

8,236.75 9,345.14 (b) Non-Current Investments 14 511.92 511.92 (c) Deferred Tax Asset (Net) 4 5,031.27 4,569.41 (d) Long-Term Loans and Advances 15 7,181.45 4,666.80 (e) Other Non-Current Assets 16 10,105.50 31,066.89 13,918.55 33,011.82

(2) Current Assets(a) Current Investments - -(b) Inventories 17 153.20 136.89 (c) Jobs-in-Progress 18 613.56 741.27 (d) Trade Receivables 19 18,195.07 17,323.23 (e) Cash and Bank Balances 20 55,043.09 53,943.71 (f) Short-Term Loans and Advances 21 8,253.93 8,197.29 (g) Other Current Assets 22 2,023.53 84,282.38 2,433.15 82,775.54

TOTAL 1,15,349.27 1,15,787.36 Note No.1 to 35 form an integral part of Financial StatementsIn terms of our report of even dateFor V. ROhATgI & CO.CHARTERED ACCOUNTANTS

Sd/-(BIPuL RASTOg)

PARTNER Memb.No.072318

Firm Regn. No.000980C

Sd/-(RAVI BAMBhA)

COMPANY SECRETARY

Sd/-(R. h. JuNEJA)


Sd/-(S. ChATTOPADhyAy)DIRECTOR (PROJECT)

Sd/-(ATuL BhATT)

CHAIRMAN and MANAGING DIRECTOR

Place : RanchiDated : 14.07.2017

93



STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2017 (` in lakhs)

PARTICuLARS NOTE NO. Current

year Previous

year

I. Revenue from Operations 23 34,908.87 32,785.01 II. Other Income 24 5,789.50 7,201.66

III. TOTAL REVENuE (I+II) 40,698.37 39,986.67 IV. EXPENSES:

(a) Purchases of Equipments & Direct Expenses 25 11,345.53 14,764.04 (b) (Accretion)/Decretion to Jobs-in-Progress 26 161.47 (236.79)(c) Employee Benefit Expenses 27 29,178.33 31,076.63 (d) Finance Costs 28 156.68 191.34 (e) Depreciation and Amortisation Expenses 29 972.36 890.80 (f) Other Expenses 30 7,670.02 10,780.53

TOTAL EXPENSES 49,484.39 57,466.55 V. Profit/(Loss) before prior period, exceptional and

extraordinary items and tax (III-IV) (8,786.02) (17,479.88)

VI. Add/(Less) Prior Period Items 31 (28.24) 9.40 VII. Profit/(Loss) before exceptional and extraordinary (8,814.26) (17,470.48)

items and tax (V-VI)VIII. Exceptional/Extraordinary Items - -

IX. Profit/(Loss) before Tax (VII-VIII) (8,814.26) (17,470.48)X. Tax Expense:

(a) Current Tax - - (b) Deferred Tax (461.86) (1,181.51)(c) Taxes relating to Earlier Years 31.95 (47.59)

XI. Profit/(Loss) for the period from continuing operations (8,384.35) (16,241.38)(IX-X)

XII. Profit/(Loss) for the period from discontinuing operations

- -

XIII. Profit/(Loss) for the period (XI+XII) (8,384.35) (16,241.38)XIV. Earnings per equity share (Face Value ` 10/- each)

(Basic & Diluted) (`)35.14

(20.89) (40.46)Note No.1 to 35 form an integral part of Financial Statements

Sd/-(BIPuL RASTOgI)



Sd/-(RAVI BAMBhA)

COMPANY SECRETARY

Sd/-(R. h. JuNEJA)



Sd/-(ATuL BhATT)



In terms of our report of even dateFor V. ROhATgI & CO.CHARTERED ACCOUNTANTS

94

MECON Limited

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017 (INDIRECT METHOD)

(` In lakhs)

2016-17 2015-16Cash Flows from Operating ActivitiesNet Profit/(Loss) before Taxation (8,814.26) (17,470.48)Add : Adjustments for

Depreciation & Amortisation 1,000.60 890.81Loss on Sale/Disposal of Fixed Assets 13.55 4.63Provision for Bad and Doubtful Debts 198.25 808.91Other Provisions 695.98 3,325.23Finance Costs 156.68 191.34

2,065.06 5,220.92Less : Adjustments for

Revaluation Reserve written back - 24.64Profit on Sale/Disposal of Fixed Assets 2.20 1.16Interest Income 4,427.60 5,609.52Dividend Received 1.06 1.06

4,430.86 5,636.38Operating Profit/(Loss) before Working Capital Changes (11,180.06) (17,885.94)Add : Adjustments for

(Increase) / Decrease in Inventories (16.31) 5.23(Increase) / Decrease in Jobs-in-Progress 124.06 (236.79)(Increase) / Decrease in Trade Receivables (3,775.08) (5,592.59)(Increase) / Decrease in Loans and Advances (2,930.57) (2,804.41)(Increase) / Decrease in Other Current Assets (286.26) 3,327.01Increase / (Decrease) in Liabilities and Provisions 9,990.26 11,987.87

3,106.10 6,686.32Cash Generated from Operations (8,073.96) (11,199.62)

Less : Taxes Paid - 3.64Net Cash from Operating Activities {A} (8,073.96) (11,203.26)

Cash Flows from Investing ActivitiesPurchase of Fixed Assets (2,140.84) (1,504.72)Fixed Assets sold/discarded 19.02 4.05(Increase)/Decrease in Deposits with Bank 5,490.56 6,799.44Interest Received 4,953.32 5,529.86Dividend Received 1.06 1.06Net Cash from Investing Activities {B} 8,323.12 10,829.69

95



CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017 (INDIRECT METHOD) (Contd.)

(` In lakhs)2016-17 2015-16

Cash Flows from Financing ActivitiesRedemption of 5% Non-Cumulative Preference Shares

- (1,260.00)

Dividend including Dividend Tax Paid - (1,094.16)Finance Costs (159.22) (188.80)Net Cash from Financing Activities {C} (159.22) (2,542.96)

Net Increase/(Decrease) in Cash & Cash Equivalent {A}+{B}+{C}

89.94 (2,916.53)

Cash and Cash Equivalent at the beginning 143.15 3,059.68

Cash and Cash Equivalent at the end 233.09 143.15

Note No.1 to 35 form an integral part of Financial Statements

Cash & Cash Equivalents represents

i) Cash & Stamps on hand 16.88 15.46

ii) Cheques & Drafts on hand - -

iii) Cash at Bank (Current A/c & Flexi Deposit A/c) 216.21 233.09 127.69 143.15


Sd/-(BIPuL RASTOgI)



Sd/-(RAVI BAMBhA)

COMPANY SECRETARY

Sd/-(R. h. JuNEJA)



Sd/-(ATuL BhATT)



96

MECON Limited

NOTE 1 : SHARE CAPITAL(` in lakhs)

AS ON 31.03.2017

AS ON 31.03.2016

AuThORISED

Equity Shares

4,10,00,000 (Previous year 4,10,00,000) Equity Shares of ` 10/- each 4,100.00 4,100.00

Preference Shares

6,30,00,000 (Previous year 6,30,00,000) 5% Non Cumulative Redeemable Preference Shares of ` 10/- each

6,300.00 6,300.00

10,400.00 10,400.00

ISSuED, SuBSCRIBED AND FuLLy PAID uP

Equity Shares

4,01,38,360 ( Previous year 4,01,38,360 ) Equity Shares of 10/- each with voting rights.

4,013.84 4,013.84

a) 4,01,38,120 equity shares are held as fully paid-up by the President of India.

b) 120 equity shares are held as fully paid-up by the Govt. Director of the company

c) 120 equity shares are held as fully paid-up by the Chairman-cum-Managing Director of the company.

Out of the total shares,

20,14,800 equity shares are allotted as fully paid-up for consideration other than cash, pursuant to the Government of India, Ministry of Steel & Mines letter No. 6(100)/78-SAIL(1) dated 15th May, 1979 as consideration for net book value of immovable assets of M/s Hindustan Steel Limited at Ranchi transferred to the Company.

4,03,060 equity shares are allotted as fully paid-up Bonus Shares during 1996-97

77,20,000 equity shares are allotted as fully paid-up against conversion of Govt. of India Loan and Interest on Loan vide Government of India, Ministry of Steel Order No.4(46)/2004-HSM dated 30th March,2007

Preference Shares

NIL (Previous year NIL) 5% Non-Cumulative Redeemable Preference Shares of ` 10/- each with preferential rights. These shares are redeemable in five equal annual instalments commencing from 2011-12 and have been fully redeemed during the Fy 2015-16.

- -

NIL (Previous year NIL) preference shares are held as fully paid-up by the President of India vide Government of India, Ministry of Steel sanction letter no.4(46)/2004-HSM(Vol.IV) dated 29.06.2007.

TOTAL 4,013.84 4,013.84

97



RECONCILIATION OF ShARES

AS ON 31.03.2017 AS ON 31.03.2016

Number Amount (` in lakhs)

Number Amount (` in lakhs)

Equity Shares

Shares Outstanding at the beginning 4,01,38,360 4,013.84 4,01,38,360 4,013.84

Shares Issued during the period - - - -

Shares Bought Back during the period - - - -

Shares Outstanding at the end 4,01,38,360 4,013.84 4,01,38,360 4,013.84

5% Non-Cumulative Redeemable Preference Shares

Shares Outstanding at the beginning - - 1,26,00,000 1,260.00

Shares Issued during the period - - - -

Shares Redeemed during the period - - 1,26,00,000 1,260.00

Shares Outstanding at the end - - - -

98

MECON Limited

NOTE 2 : RESERVES & SURPLUS (` in lakhs)

Particulars AS ON 31.03.2017 AS ON 31.03.2016

Capital Redemption ReserveAs per last Balance Sheet 6,300.00 5,040.00

Add : Transferred from Surplus - 6,300.00 1,260.00 6,300.00Revaluation Reserve $

As per last Balance Sheet 2,218.26 2,242.90Less : Transferred to Statement of Profit and Loss due to

Depreciation on appreciation of Land & Buildings - 24.64

Less : Amount adjusted / written back 2,218.26 - - 2,218.26CSR Activity Reserve

As per last Balance Sheet 82.55 135.64Add : Transferred from Surplus - 168.00Less : Transferred to Surplus 67.30 15.25 221.09 82.55general Reserve

As per last Balance Sheet 9,852.39 9,852.39 Add : Transferred from Surplus - 9,852.39 - 9,852.39 Surplus

As per last Balance Sheet 3,272.92 20,721.21Add : Net Profit / (Loss) from Statement of Profit and Loss (8,384.35) (16,241.38)Add : Transferred from CSR Activity Reserve 67.30 221.09

Amount available for appropriation (5,044.13) 4,700.92Less : Transferred to Capital Redemption Reserve - 1,260.00Less : Transferred to CSR Activity Reserve - 168.00Less : Proposed Dividend on Preference Shares

including Dividend Distribution Tax- -

Less : Proposed Dividend on Equity Shares including Dividend Distribution Tax

- -

Less : Transferred to General Reserve - (5,044.13) - 3,272.92

TOTAL 11,123.51 21,726.12

$ A Revaluation Reserve of `3,879.23 lakhs was created as on 31.03.2000 due to revaluation of certain Land & Buildings owned by the company. It was adjusted to the extent of `1,660.97 lakhs upto 31st March, 2016 on account of disposal/depreciation of Revalued Assets.

Due to changes in accounting policy in line with Accounting Standard-10 as notified / amended by Ministry of Corporate Affairs on 30.03.2016,

`2218.26 lakhs is adjusted / written back during the year 2016-17.

99



NOTE 3 : LONG-TERM BORROWINGS (` in lakhs)


TOTAL - -

NOTE 4 - DISCLOSURE UNDER ACCOUNTING STANDARD-22 ON "ACCOUNTING FOR TAXES ON INCOME"The details of Deferred Tax Liability / (Asset) is as under: (` in lakhs)


(a) Deferred Tax Liability

(i) Difference between book and tax depreciation 703.27 703.23

(ii) Provision for gratuity (8.31) 72.11

(iii) Others 139.65 834.61 139 .65 914.99

(b) Deferred Tax Assets

(i) Provision for bad & doubtful debts, etc. 4,682.42 4,513.90

(ii) Others 1,183.46 5,865.88 970.50 5,484.40

NET DEFERRED TAX LIABILITy / (ASSET) (a) - (b) (5,031.27) (4,569.41)

100

MECON Limited

NOTE 5 : OTHER LONG-TERM LIABILITIES(` in lakhs)


(a) Trade Payables

(i) Dues to Micro, Small & Medium Enterprises (MSME)

1,032.15 967.23

(ii) Others 6,202.25 7,234.40 4,105.96 5,073.19

(b) Other Payables

(i) Advances from Clients 3,919.97 3,457.17

(ii) Sundry Creditors 568.61 156.59

(iii) Liquidated Damages Recovered from Parties 446.92 390.03

(iv) Securities and Other Deposits 324.38 304.05

(v) Deposit under Employees Family Benefit Scheme 358.70 278.81

(vi) Liability for Employees 3,713.23 3,079.92

TOTAL 16,566.21 12,739.76

NOTE 6 : LONG-TERM PROVISIONS(` in lakhs)


(a) Provision for Employee Benefits

(i) Provision for Gratuity (Present Value of Defined Benefit Obligation as per actuarial valuation)

152.21 191.06

(ii) Provision for Leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation)

9,806.72 8,671.69

(iii) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation)

5,802.91 4,846.85

(iv) Provision for Employee Defined Contribution Schemes

14,216.78 12,639.64

(b) Other Provisions

(i) Provision for Taxation (Net) - -

(ii) Provision for Miscellaneous Deduction by Clients 3,090.42 2,758.80

(iii) Provision for Disputed Cases 285.12 285.12

TOTAL 33,354.16 29,393.16

101



NOTE 7 : SHORT-TERM BORROWINGS(` in lakhs)


Working Capital Borrowings from Bank (Secured against Fixed Deposits with Banks under lien)

- -

TOTAL - -

NOTE 8 : TRADE PAYABLES(` in lakhs)


Trade Payables

(i) Dues to Micro, Small & Medium Enterprises (MSME)

(a) - Principal Amount, remaining unpaid 1,479.42 1,438.03

- Interest due on Principal Amount, remaining unpaid - 1,479.42 - 1,438.03(b) Principal and Interest amount paid beyond

appointed day during the year- -

(c) Interest due and payable for the delay in making payment which have been paid beyond appointed day but without adding the interest

- -

(d) Amount of Interest accrued and remaining unpaid at the end of the year

- -

(e) Amount of further interest remaining due and payable until such date when the interet dues above are actually paid

- -

(ii) Others 11,298.34 11,052.83

TOTAL 12,777.76 12,490.86

102

MECON Limited

NOTE 9 : OTHER CURRENT LIABILITIES(` in lakhs)


(a) Current Maturity of Long-Term Borrowings - - (b) Interest accrued but not due on borrowings - 2.54 (c) Interest accrued and due on borrowings - - (d) Other Payables

(i) Advances from Clients 9,922.80 9,580.88(ii) Sundry Creditors 2,002.88 2,335.18

(iii) Liquidated Damages Recovered from Parties 79.17 115.30(iv) Securities and other deposits 396.14 372.53(v) Deposit under Employees Family Benefit Scheme 44.85 70.74

(vi) Liability for Employees 3,368.98 3,642.47(vii) VAT / Central Sales Tax Payable 187.32 76.11

(viii) Service Tax Payable 48.34 45.58(ix) Invoice raised but not accrued (Net) 2,356.30 2,331.34(x) Others (including CSR / SD / R&D Fund) 658.72 866.68

TOTAL 19,065.50 19,439.35

NOTE 10 : SHORT-TERM PROVISIONS(` in lakhs)

Particulars AS ON 31.03.2017 AS ON 31.03.2016(a) Provision for Employee Benefits

(i) Provision for Bonus 10.57 11.74(ii) Provision for Gratuity

(Present Value of Defined Benefit Obligation as per actuarial valuation)

10.75 29.68

(iii) Provision for Leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation)

1,901.05 1,838.73

(iv) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation)

194.13 151.55

(b) Other Provisions(i) Proposed Dividend on Preference Shares - -

(ii) Provision for Dividend Distribution Tax - - - -

(iii) Proposed Dividend on Equity Shares - -(iv) Provision for Dividend Distribution Tax - - - -

(v) Provision for Expenses & Contractual Obligations 16,296.50 13,662.68

(vi) Provision for Miscellaneous Deductions by Clients 35.29 289.89

(vii) Others - -TOTAL 18,448.29 15,984.27

103



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the y

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res

for P

revi

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104

MECON LimitedN

OTE

11.

2 : P

RO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T (S

OC

IAL

AM

ENIT

IES)

(` in

lakh

s)

Part

icul

ars

CO

ST

DEP

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NET

CA

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INg

A

MO

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T

As o

n 01

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Add

ition

/ Ad

just-

men

t du

ring t

he

year

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durin

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ye

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ust.

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ck o

f Re

val-

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serv

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As o

n 31

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17

As o

n 01

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On

Sale

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an

d

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Not

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Sl.

No.

5.2)

, irr

esp

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as s

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of t

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Com

pan

ies

Act

, 201

3.

105



NOTE 11.3 : PROPERTY, PLANT & EQUIPMENT, ETC.A) LAND

(i) Under Section 7 of Public Sector Iron & Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978, land measuring 118.95 acres for residential colony acquired by the Government of India for the erstwhile Hindustan Steel Limited (HSL) was transferred in favour of MECON Limited by the Gazette Notification dated 30.4.1978. Deed of conveyance for land measuring 118.53 acres has been executed by the Government of Jharkhand in favour of MECON Limited on 1st August, 2016. Balance land measuring 0.42 acres has been released and handed over to Government of Jharkhand for road purpose. Out of the land measuring 118.53 acres executed in favour of MECON Limited, 21.06 acres have been allotted to Steel Authority of India Limited (SAIL), Research & Development Centre for Iron & Steel (RDCIS), Ranchi in 1980-81 for which transfer deed is still pending. The amount received / receivable for such transfer has been taken in the accounts.

(ii) Under Section 7 of Public Sector Iron & Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978, land measuring 10.25 acres for the administrative building acquired by the Government of India for the erstwhile Hindustan Steel Limited (HSL) was transferred in favour of MECON Limited by the Gazette Notification dated 30.4.1978. Deed of conveyance in this respect has not yet been executed by the Government of Jharkhand in favour of MECON Limited. Government of Jharkhand has been approached for deed of conveyance in favour of MECON Limited and the matter is in progress.

(iii) Deed of conveyance has been executed in favour of MECON Limited by Government of Jharkhand on 1st August, 2016 for land measuring 103.33 acres for township at Ranchi acquired from Govt. of Bihar by the Company in 1978-79. Out of the land measuring 103.33 acres, transfer deed in favour of Steel Authority of India Limited (SAIL), Research & Development Centre for Iron & Steel (RDCIS), Ranchi for 7.43 acres of land and in favour of Steel Authority of India Limited (SAIL), Management Training Institute (MTI), Ranchi for 5.42 acres of land is pending. The amount received / receivable for such transfer has been taken in the accounts. Deed of conveyance has been executed in favour of MECON Limited by Government of Jharkhand on 1st August, 2016 for land measuring 1.50 acres of land for township at Ranchi which was acquired from Govt. of Bihar by the Company in 1983-84.

B) BuILDINgS

(i) Residential buildings at Rourkela, Gross block `5.12 lakhs (Previous year `5.12 lakhs) and at Durgapur, Gross block `8.62 lakhs (Previous year `8.62 lakhs) have been constructed on the land belonging to SAIL for which the depreciation is being charged at the rate applicable for Residential Building.

(ii) Pending determination of the proportionate value of the land in respect of Buildings acquired at Gaziabad, Navi Mumbai and Kolkata the cost of acquisition of flats has been considered as Building and depreciation thereon has been provided at the rate as applicable for Residential Building.

C) During the year 2016-17, the Gross Block of Land is reduced / adjusted by `1,390.86 lakhs, the Gross Block of Buildings is reduced / adjusted by `1,238.76 lakhs and Provision for Depreciation on Buildings is reduced / adjusted by `411.36 lakhs due to changes in accounting policy.

D) Necessary changes / adjustments are made under "PROPERTY, PLANT & EQUIPMENT" and "INTANGIBLE ASSETS" - Gross Block of different types of assets due to re-classification / re-grouping, etc. as required to depict the appropriate status. Provision for Depreciation / Amortisation & Net Block is also changed / adjusted accordingly.

106

MECON Limited

NOTE 12.1 : INTANGIBLE ASSETS (` in lakhs)

Particulars COST AMORTISATION NET CARRy-INg AMOuNT

As o

n 01

.04.

16

Add

ition

/

Adju

stm

ent

duri

ng th

e ye

ar

Sal

e/

Adju

stm

ent

duri

ng th

e ye

ar

Inte

r-h

ead

Adju

stm

ent

As o

n 31

.03.

17

As o

n 01

.04.

16

On

Sale

/ Ad

just

men

t

Inte

r-h

ead

Adju

st-m

ent

Dur

ing

the

peri

od

upt

o 31

.03.

17

As o

n 31

.03.

17

As o

n 31

.03.

16

1. Computer Software (General)

1,242.68 137.87 11.38 - 1,369.17 1,061.17 11.38 - 74.18 1,123.97 245.20 181.51

2. Computer Software (Social Amenities)

- - - 13.23 13.23 - - 0.99 2.65 3.64 9.59 -

TOTAL 1,242.68 137.87 11.38 13.23 1,382.40 1,061.17 11.38 0.99 76.83 1,127.61 254.79 181.51

Figures for Previous Year 1,161.99 80.69 - - 1,242.68 963.27 - - 97.90 1,061.17 181.51 198.72

Current year

Previous Year

Note : Allocation of Amortisation

i) Amortisation for the Year 76.83 97.90

ii) Amortisation relating to earlier years - -

76.83 97.90

NOTE 12.2 : DISCLOSURE UNDER ACCOUNTING STANDARD-26 ON "INTANGIBLE ASSETS"Intangible Assets- Computer Software

I) The amortization rates used - for individual software costing above ` 5.00 lakhs, 20% amortisation each year over a period of five years or proportionate amortisation each year over its licence period which is less than five years, from the year of acquisition and for individual software costing upto ` 5.00 lakhs, 100% amortization in the year of acquisition.

II) The amortization method used – Straight line method

(` in lakhs)

Particulars As on

31.03.17 As on

31.03.16

i) Gross carrying amount (Opening) 1,242.68 1,161.99

ii) Gross carrying amount (Closing) 1,382.40 1,242.68

iii) Accumulated amortization (Opening) 1,061.17 963.27

iv) Amortization recognized during the period 66.44 97.90

v) Accumulated amortization (Closing) 1,127.61 1,061.17

107



NOTE 13 : CAPITAL WORK-IN-PROGRESS(` in lakhs)

Particulars

Opening Balance

as on 01.04.16

Additions/ Adjustments during the

Period

Total

Capitalised/ Adjustments during the

period

Balance

As on 31.03.17

As on 31.03.16

1. Installation of Water Pump, Elevator, Energy Meter, etc. at Residential Township and Network Attached Storage, etc, at Head Office at Ranchi, Jharkhand.

315.76 133.60 449.36 383.85 65.51 315.76

2. Development of Software at NMDC Site, Nagarnar, Chattishgarh.

1.04 (1.04) - - - 1.04

TOTAL 316.80 132.56 449.36 383.85 65.51 316.80

i) Installation of Elevator at Administrative Building, Ranchi has been capitalised and transferred under "Electrical Installations" in NOTE 11.1 - "PROPERTY, PLANT AND EQUIPMENTS (GENERAL)" ` 47.87 Lakhs.

ii) Installation of Network Attached Storage at Administrative Building, Ranchi has been capitalised and transferred under "Computer Hardware" in NOTE 11.1 - "PROPERTY, PLANT AND EQUIPMENTS (GENERAL)" ` 12.80 Lakhs.

iii) Renovation of Office Building at Bhilai has been capitalised and transferred under "Buildings" in NOTE 11.1 - "PROPERTY, PLANT AND EQUIPMENTS (GENERAL)" ` 6.19 Lakhs.

iv) Construction of Stores Building Extension, Dinning Hall in Transit Rest House and Toilet Block in Community Hall, Township, Ranchi has been capitalised and transferred under "Buildings" in NOTE 11.2 - "PROPERTY, PLANT AND EQUIPMENTS (SOCIAL AMENITIES)" ` 148.72 Lakhs.

v) Installation of Energy Meter at Residential Township, Ranchi has been capitalised and transferred under "Electrical Installations" in NOTE 11.2 - "PROPERTY, PLANT AND EQUIPMENTS (SOCIAL AMENITIES)" ` 168.27 Lakhs.

108

MECON Limited

NOTE 14 : NON-CURRENT INVESTMENTS(` in Lakhs)


(a) Trade Investment - at Cost (unquoted)

I) Investment in Equity Instruments

i) Joint Venture

5000 Equity Shares of Naira 10 each fully paid up being 50% of paid up share capital of M/s Metallurgical & Engineering Consultants (Nigeria) Limited, a Company set up in Nigeria jointly by this Company with two Nigerian Government Companies and Nigerian Citizens

7.60 7.60

Less: Provision for dimunition in value of investment 7.60 - 7.60 -

ii) Others

50,00,000 Equity Shares of ` 10/- each fully paid up of "Neelachal Ispat Nigam Limited".

500.00 500.00

(b) Other Investment - at Cost (unquoted)

Investment in Equity Instruments

i) Others

106,383 Equity Shares of ` 10/- each fully paid-up of "Global Procurement Consultants Limited".

11.92 11.92

(Out of the above, 6,383 Equity Shares of ` 10/- each fully paid-up acquired at a premium of ` 20/- per share subsequently.)

TOTAL 511.92 511.92

a) Aggregate amount of Quoted Investments NIL NIL

b) Aggregate amount of Unquoted Investments 519.52 519.52

c) Aggregate provision for dimunition in value of investment 7.60 7.60

109



NOTE 15 : LONG-TERM LOANS AND ADVANCES (` in lakhs)


(a) Capital Advances $ - 347.33

(b) Security Deposits(i) Government Authorities $ 5.44 5.50(ii) Others

Unsecured, considered good 316.79 188.39 Considered doubtful 113.24 92.65

430.03 281.04 Less : Provision for doubtful deposits 113.24 316.79 92.65 188.39

(c) Loans and advances to related parties - -(d) Other Loans and Advances

(i) Advance to Suppliers and Sub-Contractors Secured, considered good # 763.38 762.34 Considered doubtful 361.73 361.73

1,125.11 1,124.07 Less : Provision for doubtful advances 361.73 763.38 361.73 762.34

(ii) Advance to Employees $ 7.57 9.22(iii) Advance to Others $ 105.60 106.72(iv) Prepaid Expenses $ 0.34 0.63(v) Claims Recoverable

Unsecured, considered good 3.01 0.10 Considered doubtful 116.34 115.35

119.35 115.45 Less : Provision for doubtful claims recoverable 116.34 3.01 115.35 0.10

(vi) Advances to Board of Trustees, MECON Employees Gratuity Fund $

138.97 429.12

(vii) Liquidated Damages Recovered by Clients Unsecured, considered good - - Considered doubtful 249.67 166.64

249.67 166.64 Less : Provision for doubtful liquidated damages recovered

249.67 - 166.64 -

(viii) Payment against Income Taxes (Net) $ 5,830.35 2,807.45(ix) Payment against Sales Tax / VAT $ 10.00 10.00

TOTAL 7,181.45 4,666.80$ Unsecured, considered good# Secured against bank guarantee / materials supplied / work done, as the case may be

110

MECON Limited

NOTE 16 : OTHER NON-CURRENT ASSETS (` in lakhs)

Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Long-Term Trade Receivables

Unsecured, considered good 10,089.98 7,384.99 Considered doubtful 3,988.60 4,048.75

14,078.58 11,433.74 Less : Provision for bad and doubtful trade receivables 3,988.60 10,089.98 4,048.75 7,384.99

(b) Others(i) Bank Balances

Fixed deposits with more than 3 months maturity which are due for maturity beyond 12 months from balance sheet date

► Bank Balances include amounts held as security deposit 1.00

1.00

1.00

6,501.00

(ii) Interest accrued but not due 14.52 32.56 (iii) EMD, SD and Advance in Dispute 700.76 700.76

Less : Provision for EMD, SD and Advance 700.76 - 700.76 -

TOTAL 10,105.50 13,918.55

NOTE 17 : INVENTORIES (` in lakhs)

Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Stores and Spares 98.47 82.61(b) Printing and Stationery 34.81 39.98(c) Computer Consumables 19.92 153.20 14.30 136.89

Valued as per Accounting Policy (NOTE 32, Sl.No.7)

TOTAL 153.20 136.89

NOTE 18 : JOBS-IN-PROGRESS (` in lakhs)


Jobs-in-Progress for Consultancy Services 627.27 788.74

Valued as per Accounting Policy (NOTE 32, Sl.No.11)

Less : Provision for Stagnant Jobs 13.71 613.56 47.47 741.27

TOTAL 613.56 741.27

The value of Jobs-in-Progress as on 31.03.2017 includes `137.62 lakhs (Previous Year `160.12 lakhs) for few non-moving jobs against which substantial payments have been received by the company. Therefore, no provision is made against value of such jobs. However, necessary provision is made against non-moving jobs where payment received is less than the value of Jobs-in-Progress as on 31.03.2017.

111



NOTE 20 : CASH AND BANK BALANCES (` in lakhs)

Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Cash & Cash Equivalents

i) Cash & Stamps on hand 16.88 15.46

ii) Cheques & Drafts on hand - -

iii) Cash at Bank (Current & Flexi Deposit A/c)

216.21 233.09 127.69 143.15

(b) Other Bank Balances

Fixed Deposits with more than 3 months maturity which are due for maturity within 12 months from balance sheet date

54,810.00 55,043.09 53,800.56 53,943.71 Other Bank Balances include

amounts earmarked /available for specified purposes as under:

i) CSR and SD Expenditure 498.39 565.69 ii) Research & Development

Expenditure 135.46 135.46

Other Bank Balances include amounts held as margin money & security under lien against borrowings, etc.

7,250.00 7,300.00

Other Bank Balances include Deposits with more than 12 months maturity

6,500.00 10,750.00

TOTAL 55,043.09 53,943.71

NOTE 19 : TRADE RECEIVABLES (` in lakhs)


Trade Receivables outstanding for a period exceeding six months from the date they are due for payment

2,540.31 2,486.68

Others 15,654.76 18,195.07 14,836.55 17,323.23

a) Unsecured, considered good 18,195.07 17,323.23

b) Considered doubtful - -

18,195.07 17,323.23

Less : Provision for bad and doubtful trade receivables - 18,195.07 - 17,323.23

TOTAL 18,195.07 17,323.23

112

MECON Limited

NOTE 21 : SHORT TERM LOANS AND ADVANCES (` in lakhs)

Particulars AS ON 31.03.2017 AS ON 31.03.2016(a) Loans and Advances to related parties - - (b) Other Loans and Advances

(i) Advances to Contractors $ 9.12 5.72 (ii) Advance to Suppliers and Sub-Contractors

Secured, considered good # 772.12 785.33 Unsecured, considered good 27.66 799.78 4.29 789.62

(iii) Advance to EmployeesSecured, considered good ## 0.02 0.02 Unsecured, considered good 234.04 234.06 359.58 359.60

(iv) Advance to Others & Canteen $ 18.79 26.99 (v) Prepaid Expenses $ 14.03 7.07 (vi) Deposit with Others

Unsecured, considered good 174.05 366.78 Considered Doubtful 0.84 0.84

174.89 367.62 Less : Provision for Doubtful Deposit with Others 0.84 174.05 0.84 366.78

(vii) Claims RecoverableUnsecured, considered good 156.35 127.93 Considered Doubtful 20.61 20.61

176.96 148.54 Less : Provision for Claims Recoverable 20.61 156.35 20.61 127.93

(viii) Liquidated Damages Recovered by Clients Unsecured, considered good - -Considered Doubtful 121.00 121.00

121.00 121.00Less : Provision for doubtful liquidated damages recovered 121.00 - 121.00 -

(ix) Payment against Income Taxes (Net) $ 2,715.17 2,731.03 (x) Payment against Sales Tax / VAT (Net) $ 1,106.10 1,049.55(xi) VAT Credit Receivable (INPUT) $ 39.47 63.25(xii) OUTPUT VAT Receivable

Unsecured, considered good 23.40 30.65Considered Doubtful 19.96 19.96

43.36 50.61Less : Provision for Output VAT Receivable 19.96 23.40 19.96 30.65

(xiii) VAT/CST ReceivableUnsecured, considered good 93.72 92.27Considered Doubtful 400.94 371.87

494.66 464.14Less : Provision for VAT Receivable 400.94 93.72 371.87 92.27

(xiv) Service Tax Receivable Unsecured, considered good 2,869.89 2,546.83Considered Doubtful 602.22 536.05

3,472.11 3,082.88Less : Provision for Service Tax Receivable 602.22 2,869.89 536.05 2,546.83

TOTAL 8,253.93 8,197.29

$ Unsecured, considered good# Secured against Bank Guarantee / Materials Supplied / Work done, as the case way be## Secured against buildings & Vechiles.

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NOTE 22 : OTHER CURRENT ASSETS (` in lakhs)


(a) Interest accrued but not due 1,175.45

848.08

1,683.13

750.02 (b) Other Receivables

TOTAL 2,023.53 2,433.15

NOTE 23.1 : REVENUE FROM OPERATIONS (` in lakhs)

Particulars 2016-17 2015-16

(a) Revenue from Consultancy Services 26,176.23 21,494.72

(b) Revenue from Construction Contracts 8,116.68 10,232.97

(c) Other Operating Revenue

(i) Provision no longer required written back (Direct) 605.71 1,034.98

(ii) Others 10.25 22.34

TOTAL 34,908.87 32,785.01

NOTE 23.2 : GROSS INCOME DERIVED FROM SERVICES RENDERED[Refer Note 23.1(a) and Note 23.1(b)]

(` in lakhs)


(a) Engineering, Technical Consultancy, Project Management Services, etc.

- Domestic

26,089.94 21,273.11

(b) Engineering, Technical Consultancy, Project Management Services, etc.

- Foreign [Refer Note-35.18]

86.29 221.61

(c) Execution of Construction Contracts/EPC Contracts including Supply of Equipment & Components, etc.

8,116.68 10,232.97

TOTAL 34,292.91 31,727.69

114

MECON Limited

NOTE 25 : PURCHASE OF EQUIPMENTS & DIRECT EXPENSES(` in lakhs)


(a) Purchase of Equipments & Components for execution of jobs 5,393.75 5,581.10

(b) Expenses on Sub-Contractors & Others for execution of jobs 3,270.16 6,247.91

(c) Provision for Expenses & Contractual Obligations for execution of jobs 2,681.62 2,935.03

TOTAL 11,345.53 14,764.04

NOTE 24 : OTHER INCOME (` in lakhs)


(a) Interest Income

(i) Interest from Bank (Tax deducted at Source ` 428.01 lakhs) (CPLY ` 561.46 lakhs)

4,419.22 5,609.11

(ii) Interest on Advances to Employees for Conveyance and House Building

1.29 0.41

(iii) Interest from Income Tax Department and Others 7.09 -

(b) Dividend Income from Non-Current Investment 1.06 1.06

(c) Other Non-Operating Income

(i) Profit on Sale / Disposal of Fixed Assets 2.20 1.16

(ii) Income from Township 1,013.51 1,417.10

(iii) Provision no longer required written back 197.63 2.36

(iv) Revaluation Reserve written back - 24.64

(v) Miscellaneous Income 147.50 145.82

TOTAL 5,789.50 7,201.66

115



NOTE 27 : EMPLOYEE BENEFIT EXPENSES

(` in lakhs)


(a) Salaries & Wages

- Salary and Allowances 17,386.26 17,124.95

- Leave Encashment 2,084.22 2,416.99

- Perks and Allowances 3,872.75 6,492.99

- Bonus 7.59 11.73

- Superannuation Benefits 2,561.49 1,804.08

Sub-Total 25,912.31 27,850.74

(b) Company's Contribution to Provident and Other Fund 2,178.03 2,140.92

(c) Staff Welfare Expenses

- Education 3.67 2.35

- Medical 620.67 529.29

- Social & Cultural Activities 54.85 102.74

- Rent (Residential) - 0.39

- Group Insurance Premium 34.71 44.22

- Staff Welfare (Others) 374.09 405.98

Sub-Total 1,087.99 1,084.97

TOTAL (a)+(b)+(c) 29,178.33 31,076.63

NOTE 26 : (ACCRETION) / DECRETION TO JOBS-IN-PROGRESS(` in lakhs)


(a) Opening Jobs-in-Progress (Consultancy) 788.74 551.95

(b) Closing Jobs-in-Progress (Consultancy) 627.27 788.74

TOTAL 161.47 (236.79)

116

MECON Limited

NOTE 28 : FINANCE COSTS (` in lakhs)

Particualrs 2016-17 2015-16

(a) Interest Expenses

i) Interest on Loan from Banks 90.99 121.11

TOTAL (a) 90.99 121.11

(b) Other Borrowing Costs

i) Bank Charges 17.81 19.86

ii) Bank Guarantee Commission 47.88 50.37

TOTAL (b) 65.69 70.23

TOTAL (a) + (b) 156.68 191.34

NOTE 29 : DEPRECIATION AND AMORTISATION EXPENSES(` in lakhs)


a) Depreciation 895.53 792.90

b) Amortisation 76.83 97.90

TOTAL (a) + (b) 972.36 890.80

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NOTE 30 : OTHER EXPENSES (` in lakhs)

Sl.No Particulars 2016-17 2015-161. Expenses on Foreign Experts - - 2. Travelling Expenses 1,799.99 1,694.693. Foreign Deputation 299.90 257.364. Maintenance & Repairs to Buildings 1,200.57 1,458.635. Repairs (Others) 96.88 65.556. Stores & Spares consumed 102.15 260.437. Printing & Stationery consumed 121.47 96.978. Expenses on Computer Consumables 74.06 63.609. Rent (Non-residential) 307.16 300.03

10. Rates & Taxes 46.90 48.6011. Advertisement & Publicity 402.78 271.2512. Payment to Auditors :

- As Statutory Auditor 3.00 3.00 - For Tax Audit Matters 0.48 0.48 - For Quarterly Audit 1.80 1.80 - For reimbursement of expenses 2.81 8.09 3.60 8.88

13. Insurance 3.70 5.1314. Training Expenses :

- Inland 59.22 79.78 - Foreign - 59.22 - 79.78

15. Postage,Telephones & Telegraphs 149.30 138.4616. Computer Services 116.80 87.7617. Power and Fuel 515.24 503.5218. Legal & Professional Charges 34.27 61.3819. Assets Charged to Revenue 1.55 1.4220. Other Administrative and Misc. Expenses 957.07 922.6721. Fees Withdrawn 9.21 6.1422. Expenses on CSR and Sustainable Development 55.93 199.3723. Expenses on Research & Development 400.00 110.1424. Loss on Sale / Disposal of Fixed Assets 13.55 4.6325. Provisions

- Provision for Claims Recoverable 1.00 62.99 - Provision for Bad & Doubtful Debts 198.25 808.91 - Provision for LD Recovered by Clients 83.53 41.20 - Provision for Doubtful Deposit with Others - 1.14 - Provision for Doubtful Advances to Suppliers 0.06 19.92 - Provision for Earnest Money Deposit 20.59 - - Provision for Service Tax Receivable 113.39 271.36 - Provision for Stagnant Jobs 188.20 1,329.67 - Provision for Stagnant Jobs-in-Progress 3.65 - - Provision for VAT / Cess Receivable 47.35 183.38 - Provision for Doubtful ITDS Credit 56.84 12.08 - Provision for Doubtful STDS Credit 4.57 16.56 - Provision for Misc. Deduction by Clients 176.80 859.79 - Provision for Disputed Cases - 527.14

TOTAL 7,670.02 10,780.53

NOTE 31 : PRIOR PERIOD ITEMS(` in lakhs)

Sl. No. Particulars 2016-17 2015-16 1. Revenue from Operations - (9.60)2. Other Income - 0.193. Depreciation Expenses 28.24 0.01

NET DEBIT / (CREDIT) 28.24 (9.40)

118

MECON Limited

NOTE 32 : SIGNIFICANT ACCOUNTING POLICY

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

1.1 The financial statements are prepared under the historical cost concept on accrual basis of accounting in accordance with generally accepted accounting principles in India and provisions of the Companies Act 2013 / 1956 as applicable and accounting standards as notified / amended there under from time to time.

2. uSE OF ESTIMATES

2.1 In preparing the financial statements in conformity with accounting principles generally accepted in India, the company makes best estimates and assumptions that may affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as at the reporting date and the amount of revenue and expenses during the reporting period. Actual result in some cases may differ from those estimates. Any revision of such estimates is recognised during the period in which the same is determined.

3. CuRRENT / NON-CuRRENT ASSETS & LIABILITIES

3.1 All items of assets and liabilities in the Balance Sheet are classified as Current and Non-current as per requirement of the Companies Act, 2013, as applicable.

3.2 Normal operating cycle of the company is considered 12 months keeping in view past experience and nature of business of the company.

3.3 Trade Receivables (i.e. dues arising only from clients in the normal course of business) outstanding for a period exceeding six months is determined after taking into account 30 days normal credit period allowed by the company.

3.4 Dues on account of goods purchased or services received in the normal course of business are treated as Trade Payables.

4. FIXED ASSETS

4.1 Items of Property, Plant and Equipment are carried at cost including expenses incidental to acquisition, installation etc. less accumulated depreciation and accumulated impairment losses.

4.2 Items of Property, Plant and Equipment purchased during the year costing upto `1,000/- each are charged to revenue.

4.3 The cost of any software purchased along with the computer hardware, being an integral part of the hardware, is capitalized along with the cost of the hardware. However, expenditure incurred on acquisition of software (including ERP), which is not an integral part of related hardware, is treated as intangible assets.

4.4 Items of Property, Plant and Equipment retired from active use and held for disposal are shown separately at lower of their carrying amount and net realizable value.

4.5 Items of Property, Plant and Equipment held under Lease is recognized as per AS -19.

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5. DEPRECIATION & AMORTISATION

A. Property, Plant and Equipment5.1 Depreciation on Property, Plant and Equipment is provided for under “Straight-Line Method”. After

considering residual value of 5% of the original cost of the Property, Plant and Equipment, the depreciable amount is depreciated over the useful life of the Property, Plant and Equipment and in the manner prescribed in Schedule II of the Companies Act, 2013 and relevant rules as applicable.

5.2 Property, Plant and Equipment costing above `1,000/- each and up to `5,000/- each are fully depreciated in the year of acquisition.

5.3 Items of Property, Plant and Equipment held under Finance Lease are depreciated as per Schedule II of the Companies Act, 2013. However, if there is no reasonable certainty that the company (lessee) will obtain the ownership by the end of the lease term, the asset is fully depreciated over the lease term or its useful life, whichever is shorter.

5.4 Where cost of a part of an item of Property, Plant and Equipment is significant in relation to the total cost of the item and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately for computation of depreciation.

B. Intangible Assets5.5 Expenditure incurred on acquisition of technical know-how and engineering materials is treated as

intangible assets and is amortised over a period of five years.

5.6 Expenditure incurred on acquisition of software is amortised over a period of five years from the year of acquisition or its license period, whichever is less. However, software individually costing upto `5,00,000/- is fully amortised in the year of acquisition.

6. INVESTMENTS6.1 Investments are classified as current and non-current as per requirement of Companies Act, 2013,

as applicable. Non-current investments are classified as trade investment and other investment as per requirement of Companies Act, 2013, as applicable.

6.2 Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, in the value of long term investment, the carrying amount is reduced to recognise the decline on individual investment basis.

6.3 Current investments are carried at lower of cost and fair value on individual investment basis.

7. INVENTORIES7.1 Closing stock of stores & spares, printing & stationery items and other consumables are valued at lower

of cost, on First in First Out (FIFO) basis, and net realisable value. Consumption of the above items during the reporting period is arrived at by deducting the value of physical stock in hand as on the reporting date from the aggregate value of opening stock and purchases during the reporting period.

However, spare parts are not considered as inventory when it is required to be capitalized as per AS-10.

8. ENgINEERINg RESEARCh & DEVELOPMENT8.1 Expenditure incurred on Engineering Research and Development activities are charged to revenue

in the relevant years.

120

MECON Limited

9. FOREIgN CuRRENCy TRANSLATION

9.1 All Current Assets and Current Liabilities are translated at the relevant rates of exchange prevailing at the year end and the translation differences are recognised in the profit and loss account.

10. INCOME RECOgNITION

10.1 Engineering & Consultancy Services

10.1.1 Income from Engineering & Consultancy services rendered to the clients against contracts or Letters of Intent or Work orders or exchange of letters which stipulate lump sum fee is recognised on the basis of technical estimate of percentage of progress achieved at the end of the financial year considering the pre-determined threshold limit on the basis of value of respective jobs. The actual progress is taken after deducting 10% in such cases and this 10% is taken into account in the year in which 100% progress is achieved.

10.1.2 Income from services rendered other than lump sum fee basis (including reimbursable jobs) is recognised at 100% value of the invoices raised for the services rendered during the financial year. Where the invoice is settled / admitted by the client during the year, income is recognised upto the amount settled/admitted.

10.2 Execution of Projects

10.2.1 Income from execution of projects (including sale of spares) for the clients against contracts or letters of Intent or work orders or exchange of letters which stipulate fixed price is recognised on the basis of percentage of progress achieved during the financial year.

10.2.2 Income on account of escalation, additional or extra claims and other miscellaneous items like project insurance claims is recognised at 100% value as and when they are admitted. Where escalation in price is provided in the contract with specific guidelines the same is recognised as accrued during the financial year as per the provisions of the contract.

10.3 Others

10.3.1 Dividend income from Investments is recognised as and when the right to receive the payment is established.

11. JOB-IN-PROgRESS11.1 For lump sum fee Engineering & Consultancy jobs, where the progress achieved in respect of a job is

below the pre-determined threshold limit, lower of cost or value of the work done, computed on the basis of technical estimate of the percentage of progress achieved, is carried forward under Job-in-Progress.

11.2. Where the work is started on the basis of job allotted by LOI / any other communication from the client, but the fee is yet to be settled, the cost incurred against such jobs is carried forward under Job-in-Progress. However, in cases where minimum undisputed terms are agreed to by the client, income is accounted for on the basis of such undisputed terms.

12. EMPLOyEE BENEFITS12.1 All short term employee benefits are recognised at their undiscounted amount in the reporting

period in which they are incurred.

12.2 Employee benefits under defined contribution plans comprising Pension Scheme, Post-Retirement Medical Benefit Scheme are recognised and charged to revenue on the basis of actual liability.

121



12.3 Employee benefits under defined benefit plans comprising PF, Gratuity, Leave Encashment etc. are recognised based on the actuarial valuation as at the end of the reporting period and charged to revenue with actuarial gains/losses as per AS-15 (Revised).

12.4 Expenditure on termination benefits (Voluntary Retirement Compensation) is charged to revenue in the period in which it is incurred.

13. PRIOR PERIOD

13.1 Any expenditure or income of ` 10,000/- and above in each case, which arise in the current period as a result of errors or omissions in the preparation of financial statements of one or more prior periods, are treated as prior period items. However, depreciation relating to earlier years is treated as a prior period item irrespective of the amount of depreciation.

14. PROVISION FOR CONTRACTuAL OBLIgATIONS/LD, ETC.14.1 Provisions for estimated liabilities on account of guarantees & warranties etc. in respect of Engineering

& Consultancy Services and Turnkey Contracts are made by the company after assessment of risk and consequential probable liabilities on case to case basis.

14.2 Provisions for liquidated damages are made as and when these are deducted and/or considered deductible by the client as per contract.

14.3 Suppliers’/contractors’ claims for price escalation, additional or extra claims, etc. are accounted for to the extent such claims are accepted by the company.

15. IMPAIRMENT OF ASSETS

15.1 The company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognised is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of assets. If it is found that some of the impairment losses already recognised need to be reversed, the same are recognised in the Statement of Profit & Loss in the year of reversal.

16. TAXES ON INCOME

16.1 Current tax is determined as the amount of tax payable in respect of taxable income for the reporting period. Deferred tax is recognised on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

17. BORROWINg COST

17.1 Borrowing costs incurred by the Company which are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset.

Other borrowing costs are recognized as expense in the period in which these are incurred.

122

MECON Limited

NOTE 33 : CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

(` in lakhs)


33.1 Contingent Liabilities

i) Claims against Company under liquidated damage clause by the Clients. NIL NIL

ii) Income tax in dispute / under appeal 605.86 802.91

iii) Sales tax demands pending appeals with Appellate Authorities. 1,913.77 1,287.26

iv) Claims against Company by Contractors/Suppliers, etc pending final decision. 8,720.19 4,870.16

v) Claims against Company for electricity supply by Jharkhand Urja Vikas Nigam Limited (JUVNL) in dispute `2486.07 lakhs. Out of this, `527.14 lakhs is paid / provided in accounts pending final decision during the FY 2015-16

1,958.93 1,958.93

vi) The Regional Provident Fund Commissioner-II, Jharkhand, Ranchi ordered for payment of `385.27 lakhs by way of interest and penalty to the BOT, arising out of delayed remittances by the company to the BOT, MECON Employees PF Trust. The company disputed the same and filed an appeal with EPF, Appellate Tribunal, New Delhi after depositing `96.32 lakhs as interim adhoc advance.

The Hon’ble High Court of Jharkhand, vide order dated 30th July, 2012 has directed Provident Fund Commissioner, Ranchi to decide the question of delay in payment and determine the quantum of damages with a view to re-assess the liability of the Company, setting aside all earlier orders.

RPFC has worked out liability of 326.02 lakhs vide their letter dated 28.08.2013. Provision of `3.11 lakhs has been made during 2013-14 based on Company’s calculation pending final decision. Out of the above, the Regional Provident Fund Commissioner-I, Jharkhand, Ranchi vide their letter dated 17.03.2015, demanded `116.86 lakhs towards interest and penalty, arising out of delayed remittances of PF and Pension amounts for the period from April, 1971 to February, 2001.

322.91 322.91

vii) Interest on arrear perks and allowances in respect of the executive employees as determined upto 31.03.2017 following order no. O.A. 350/00191/2014 dated 15.02.2016 passed by the Central Administrative Tribunal, Calcutta Bench, pending final decision.

4129.82 3575.48

33.2 CommitmentsEstimated amount of contracts/orders remaining to be executed/supplied on capital account and not provided for

136.35 1304.64

NOTE 34 : PROPOSED DIVIDEND (` in lakhs)


Proposed dividend on equity shares Total dividend (` in lakhs) Dividend per share (`)

NILNIL

NILNIL

123



NOTE 35 : ADDITIONAL INFORMATION AND OTHER DISCLOSURES(` in lakhs)


35.1 Letters of Credit opened with Bankers for purchase of equipment & components and technical services.

NIL 118.43

35.2 Guarantees given by Banks for and on behalf of the Company to different clients etc.

17,239.63 16,519.38

35.3 Earnings in Foreign Exchange

Fees for services rendered.

86.29 221.61

35.4 Expenditure in Foreign Currency

(i) Professional and Consultation Fees

(ii) Other matters

104.67

136.37 241.04

528.03

174.18 702.21

35.5 Value of Imports (Calculated on CIF basis)

(i) Equipment, components & spares parts used in construction contract

(ii) Capital goods

139.92

11.52 151.44

11.14

NIL 11.14

35.6 (i) Expenses on Advertisement & Publicity

a) Advertisement

b) Publicity

13.10

34.23 47.33

13.83

50.74 64.57

(ii) Expenses on Public Relation Establishment 47.79 42.22

35.7 Expenses on Engineering, Research & Development Wing / establishment, including capital assets

a) Salary & Wages, etc.

b) Expenses out of R&D Fund76.57

NIL 76.57114.92

NIL 114.92

35.8 Particulars of remuneration of whole time Directors including Managing Director :

(i) Salaries & Allowances

(ii) Company’s Contribution to Provident Fund and Other Benefits

117.01

20.10 137.11

123.13

22.64 145.77

(iii) Employee Benefits (P.V. of DBO as per actuarial valuation)

Remuneration excludes medical facilities provided at Company's hospital, monetary value of which is not ascertainable.

73.20 124.08

124

MECON Limited

35.9 : PARTICULARS OF PROVISIONS(` in lakhs)

PARTICuLARSProvision for Bonus

Provision for Bad & Doubtful

Debts

Provision for

Liquidated Damages recovered by Clients

Provision for

Claims Recover-

able

Provision for

Doubtful Earnest Money Deposit

Provision for Doubtful

Deposit with Others

Provision for doubtful

advances to suppliers/

sub-contractors

Provision for Miscell-aneous

Deductions by Clients

Provision for Disputed Cas-es, Stagnant jobs, EMD,

SD advances, output VAT

receivable, etc

Opening Balance as on 01.04.2016

11.73(3.47)

4,048.75(3,658.75)

287.63(255.68)

135.95(72.96)

6.85(6.85)

86.64(85.50)

361.73 (442.00)

3,048.68(2,386.31)

8,214.22(6,002.63)

Add: Provision made during the period

7.01(11.73)

198.25 (808.91)

83.53 (41.20)

1.00 (62.99)

20.59 (NIL)

NIL (1.14)

0.06 (19.92)

176.80 (859.79)

414.00(2,340.19)

Less: Provision utilised during the period

3.33(3.47)

1.90(16.40)

0.49 (NIL)

NIL (NIL)

NIL (NIL)

NIL (NIL)

NIL(NIL)

NIL (32.40)

2.12(2.91)

Less: Unused provision reversed during the period

4.84(NIL)

256.50(402.51)

NIL(9.25)

NIL(NIL)

NIL (NIL)

NIL (NIL)

NIL (100.19)

99.77 (165.02)

116.90(125.69)

Closing Balance as on 31.03.2017

10.57(11.73)

3,988.60 (4,048.75)

370.67 (287.63)

136.95(135.95)

27.44 (6.85)

86.64(86.64)

361.79(361.73)

3,125.71(3,048.68)

8,509.20(8,214.22)

Figures in bracket relates to previous year

35.10 : DISCLOSURE UNDER ACCOUNTING STANDARD-7 ON “CONSTRUCTION CONTRACTS”

(` in lakhs)


i) Contract Revenue recognized as revenue for the period [Refer Note 23.2]

34,292.91 31,727.69

ii) Contract costs incurred and recognized profits (Less recognized losses) upto the reporting date

366,925.18 4,66,110.39

iii) Advances received 13,842.76 13,038.05

iv) Gross amount due from customers for contract work 36,319.22 32,649.98

v) Gross amount due to customers for contract work 7,498.66 6,404.08

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35.11 : DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON "EMPLOYEE BENEFITS"

A. Defined Benefit Scheme

gratuity : Payable on separation @ 15 days salary for each completed year of service to eligible employees who render continuous service of 5 years or more, subject to a maximum limit of 10.00 lakhs.

Leave Encashment: Payable on separation to eligible employees who have accumulated earned leave and half pay leave. Maximum limit of accumulation is 300 days (both earned leave and half pay leave taken together). However, no commutation of HPL would be permissible for the purpose of encashment of 300 days leave as above. Encashment of accumulated earned leave is also allowed upto 30 days once in a calendar year.

Provident Fund: 12% of Basic Pay & Dearness Allowance contributed to the Provident Fund Trust by the Company.

Post Retirement Medical Benefits : Available to retired employees at company's hospitals/under health Insurance scheme/a fixed amount of ` 2,400/- p.a. under Outdoor Medical Treatment (ODMT) scheme, as applicable.

Post Retirement Settlement Benefits: Payable to retiring employees for settlement upto their home town.

Employees' Family Benefit Scheme: Monthly payments to disabled separated employees/legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long Service Award: Payable in kind on rendering 15 years of service and also on rendering 30 years of service.

Retirement gift: Payable in kind on retirement.

LTC/LTA: Non-executive regular employees are entitled to one LTC and one LTA according to rates in the eligible grade, in a block of four years.

126

MECON Limited

B. Reconciliation of Present Value of Defined Benefit Obligation (DBO)

(` in lakhs)

1 2 3 4 5 6 7 8

Sl. Particulars gratuity Leave Encashment

Post Retirement

Medical Benefits

Post Retirement Settlement

Benefits

Employee Family Benefit Scheme

Retirement gift

Long Service Award

LTC/LTA

P.V. of DBO (Opening) 5,267.13 10,510.42 577.41 174.79 172.76 24.58 18.12 78.00

P.V. of DBO (Opening)(Previous Year) 5,579.99 9,473.12 545.14 181.25 174.92 24.41 16.63 85.72

1 Current Service Cost 141.72 725.06 - 9.80 - 1.38 2.05 -

Current Service Cost (Previous Year) 144.23 638.19 - 9.71 - 1.31 2.06 -

2 Interest Cost 394.28 767.28 43.98 13.18 11.69 1.85 1.41 5.48

Interest Cost (Previous Year) 403.72 671.34 41.18 13.18 11.78 1.77 1.29 5.91

3 Contributions made - - - - - - - -

Contributions made (Previous Year) - - - - - - - -

4 Actuarial Loss/ (gain) 150.22 591.88 171.56 0.70 122.27 (2.43) (1.28) 2.71

Actuarial Loss/ (Gain) (Previous Year) 169.74 1,107.46 25.32 (21.23) 44.21 (2.23) (1.78) 17.94

5 Plan Amendments - - - - - - - -

Plan Amendments (Previous Year) - - - - - - - -

6 Curtailment loss / (gain) - - - - - - - -

Curtailment loss/ (gain) (Previous Year) - - - - - - - -

7 Premium Paid (9.97) - - - - - - -

Premium Paid (Previous Year) (9.70) - - - - - - -

8 Past Service Cost - - 768.81 - - - - -

Past Service Cost (Previous Year) - - - - - - - -

9 Benefit Paid (644.51) (886.87) (78.12) (10.17) (60.39) (0.17) - (5.67)

Benefit Paid (Previous Year) (1,020.85) (1,379.69) (34.23) (8.12) (58.15) (0.68) (0.08) (31.57)

10 P.V. of DBO (Closing) 5,298.87 11,707.77 1,483.64 188.30 246.33 25.21 20.30 80.52

P.V. of DBO (Closing) (Previous Year) 5,267.13 10,510.42 577.41 174.79 172.76 24.58 18.12 78.00

Experience gain/(Loss) adjustments on Plan Liabilities as on 31.03.2017

(103.65) (5.99) 77.00 (9.16) 117.24 (3.75) (2.18) 0.64

Experience Gain/(Loss) adjustments on Plan Liabilities as on 31.03.2016

189.16 608.77 (6.95) (28.31) 44.59 (4.22) (1.65) 18.22


(109.59) 49.00 36.29 (21.17) 38.69 (5.01) (1.02) 7.22


42.56 (3,169.00) (17.50) (17.78) 84.48 2.52 (2.26) 21.73


(503.06) 162.49 (8.90) (18.91) 41.66 (0.87) (2.49) 11.50

127



(` in lakhs)

1 2 3 4 5 6 7 8

Sl. Particulars gratuityLeave

Encashment

Post Retirement

Medical Benefits


Benefits

EFBSRetirement

gift

Long Service Award

LTC/LTA

Experience gain/(Loss) adjustments on Plan Assets as on 31.03.2017

(1.68) - - - - - - -

Experience Gain/(Loss) adjustments on Plan Assets as on 31.03.2016

(50.01) - - - - - - -


(13.78) - - - - - - -


(40.56) - - - - - - -


1.81 - - - - - -

C. Reconciliation of Fair Value of Plan Assets and Obligations.The company has wholly/partly funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by LIC through whom the investments have been made by the Fund. Investments of the fund is also made in flexi deposit account with Banks. The reconciliation of fair value of plan assets of the Gratuity Fund and defined benefit Gratuity obligations are as under:

(` in lakhs)

Sl. Particulars As on 31.03.2017

As on 31.03.2016

As on 31.03.2015

As on 31.03.2014

As on 31.03.2013

1 F.V. of Plan Assets (Opening) 5,475.50 6,004.80 6,334.49 6,503.62 6,765.04

2 Expected return on Plan Assets (Net) 425.89 510.53 546.34 569.10 586.50

3 Benefit Payment (624.83) (1,009.82) (862.25) (712.67) (864.73)

4 Contributions made - 20.00 - 15.00 15.00

5 Actuarial (Loss)/ Gain (1.68) (50.01) (13.78) (40.56) 1.81

6 F.V. of Plan Assets (Closing) 5,274.88 5,475.50 6,004.80 6,334.49 6,503.62

7 P.V. of D.B.O. (Closing) 5,298.87 5,267.13 5,580.01 5,586.47 6,007.91

Net liability / (assets) recognised in the Balance Sheet

23.99 (208.37) (424.79) (748.02) (495.71)

The Company expects to contribute the amount to the Gratuity Fund during the Year 2017-18 after considering liability and fund position.

128

MECON Limited

D. Provident Fund

Company's contribution paid/payable during the year to the Provident Fund Trust are recognised in the Statement of Profit & Loss. The Company's Provident Fund Trust is exempted under section 17 of Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The Company has already made adequate provisions in the accounts based on actuarial valuation of Provident Fund.

The defined benefit obligations, other than Gratuity and Provident fund, are unfunded.

E. Expenses recognised in Statement of Profit & Loss for the year ended 31st March, 2017

(` in lakhs)

1 2 3 4 5 6 7 8

Sl. Particulars gratuity Leave Encashment

Post Retirement

Medical Benefits


Benefits

Employee Family Benefit Scheme

Retirement gift

Long Service Award

LTC/LTA

1 Current Service Cost 141.72 725.06 - 9.80 - 1.38 2.05 -

Current Service Cost (Previous Year) 144.23 638.19 - 9.71 - 1.31 2.06 -

2 Interest Cost 394.28 767.28 43.98 13.18 11.69 1.85 1.41 5.48

Interest Cost (Previous Year) 403.72 671.34 41.18 13.18 11.78 1.77 1.29 5.91

3 Actuarial Loss/ (gain) 151.90 591.88 171.56 0.70 122.27 (2.43) (1.28) 2.71

Actuarial Loss/ (Gain) (Previous Year) 219.75 1,107.46 25.32 (21.23) 44.21 (2.23) (1.78) 17.94

4 Past Service Cost - - 768.81 - - - - -

Past Service Cost (Previous Year) - - - - - - - -

5 Plan Amendments - - - - - - - -

Plan Amendments (Previous Year) - - - - - - - -

6 Curtailment loss / (gain) - - - - - - - -

Curtailment loss / (gain) (Previous Year)

- - - - - - - -

7 Expected Return on Plan Assets (435.86) - - - - - - -

Expected Return on Plan Assets (Previous Year)

(520.23) - - - - - - -

Total 252.04 2,084.22 984.35 23.68 133.96 0.80 2.18 8.19

Total (Previous Year) 247.47 2,416.99 66.50 1.66 55.99 0.85 1.57 23.85

Actual return on plan assets 434.18 - - - - - - -

Actual return on plant assets (Previous Year)

470.22 - - - - - - -

129



F. Actuarial Assumptions

2016-17 2015-16

1 Discount Rate (per annum) --- 7.30% 8.00%

2 Mortality Rate --- Indian Assured Lives Mortality (2006-08) Ultimate

Indian Assured Lives Mortality (2006-08) Ultimate

3 Withdrawal Rate (per annum)

--- 0.10% to 0.50% depending on age group. 10% flat at all age groups for Contract Employees

0.10% to 0.50% depending on age group. 10% flat at all age groups for Contract Employees

4 Medical Inflation Rate (per annum)

--- 12% for first 5 years and thereafter 8%

12% for first 5 years and thereafter 8%

5 Expected rate of return on Plan Assets (per annum)

--- 8.35% - 9.5% 8.45% - 9.5%

6 Salary Escalation (per annum) --- 16% on Basic Pay 16% on Basic Pay

The estimate of future salary increase considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors.

g. Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post-retirement medical benefit scheme:

(` in lakhs)

Sl. No.

Particulars One percentage point increase in medical

inflation rate

One percentage point decrease in medical

inflation rate

1 Increase/(decrease) on aggregate service cost and interest cost of post retirement medical benefits

10.60 (9.13)

2 Increase/(decrease) on present value of post retirement benefit obligations as at 31st March, 2017

145.23 (125.13)

h. Defined Contribution Scheme

Post Retirement Pension Benefits

i) 10% of Basic Pay & Dearness Allowance for executives to be contributed by the Company w.e.f. 01.01.2007.

ii) 6% of Basic Pay (Revised) & Dearness Allowance for non-executives to be contributed by the Company w.e.f. 01.01.2012.

I. Expenses recognised in Statement of Profit & Loss for the year(` in lakhs)

Particulars Post Retirement Pension Benefits

2016-17 2015-16

Expenses charged to Statement of Profit and Loss 1,577.14 1,550.19

130

MECON Limited

35.12 : DISCLOSURE UNDER ACCOUNTING STANDARD-18 ON “RELATED PARTY DISCLOSURES”

i) The list of Related Parties and their relationships are given below:

Nature of Relationship Name of the Related Parties

Key Management Personnel Shri Atul Bhatt (w.e.f. 01.10.2016)

Shri A. K. Tyagi (upto 30.09.2016)

Shri S. Chattopadhyay

Shri P. K. Sarangi (w.e.f. 01.01.2017)

Shri Gautam Chatterjee (w.e.f. 20.03.2017)

Shri D. Dutta (upto 31.10.2016)

Shri S. R. Sengupta (upto 31.12.2016)

Shri A. P. Singh (upto 31.12.2016)

Shri Saraswati Prasad, IAS (w.e.f. 08.02.2017)

Smt Bharathi S. Sihag, IAS (upto 30.11.2016)

Shri Syedain Abbasi, IAS


Nature of Relationship Name of the Related Party

Joint Venture Company M/s. Metallurgical & Engineering Consultants (Nigeria) Limited

ii) The details of transactions between the Company and the Related Parties are given below:(` in lakhs)

Sl. No.

Nature of transactions Key Management Personnel Joint Venture

2016-17 2015-16 2016-17 2015-16

a) Managerial Remuneration 137.11 145.77 - -

b) Employee Benefits (P.V. of DBO as per actuarial valuation)

73.20 124.08 - -

c) Sitting Fees 1.10 0.40 - -

131



35.13 : DISCLOSURE UNDER ACCOUNTING STANDARD-19 ON “LEASES” The Company has taken certain offices, residential premises, etc on operating lease which are

cancellable by giving appropriate notices as per respective agreements. During the year an amount of `318.59 lakhs (PY `306.18 lakhs) has been accounted for as rental charges in respect of these cancellable leases.

The Company has given certain office, residential premises, etc on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of `103.33 lakhs (PY `91.45 lakhs) has been accounted for as rental income in respect of these cancellable leases.

35.14 : DISCLOSURE UNDER ACCOUNTING STANDARD-20 ON “EARNINGS PER SHARE”

Calculation of Earnings Per Share :(` in lakhs)

Sl. No.


a) Net Profit / (Loss) for the year ( ` in lakhs) (-) 8,384.35 (-)16,241.38

Less : Proposed Dividend on Preference Shares including Dividend Distribution Tax ( ` in lakhs)

NIL NIL

b) Net Profit / (Loss) for the year artibutable to Equity Shareholders ( ` in lakhs)

(-) 8,384.35 (-) 16,241.38

c) Weighted average number of Equity Shares (Refer Note 1) 4,01,38,360 4,01,38,360

d) Earnings Per Share (Basic and Diluted) (b)/(c) (in ` ) (-) 20.89 (-) 40.46

e) Face Value per share (in ` ) 10.00 10.00

35.15 : DISCLOSURE UNDER ACCOUNTING STANDARD-27 ON “FINANCIAL REPORTING OF INTEREST IN JOINT VENTURES”

As per Accounting Standard-27 ‘Financial Reporting of Interest in Joint Ventures’, the Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company, incorporated in Nigeria, are given below:

(` in lakhs)

Name of the Joint Venture Company

% of Company’s Ownership

Interest

Assets Liabilities Income Expenditure Contingent Liabilities

CapitalCommit-

ments

Metallurgical & Engineering Consultants (Nigeria) Limited

50(50)

3.41(27.60)

313.36(335.47)

11.76(15.15)

46.14(55.48)

NIL(NIL)

NIL(NIL)

Figures in bracket relates to previous year

The above figures are based on the audited accounts of Metallurgical & Engineering Consultants (Nigeria) Ltd. for the year ending 31.12.2014. Reporting currency of Metallurgical & Engineering Consultants (Nigeria) Ltd. is Naira.

132

MECON Limited

Assets and Liabilities are reported using the closing rate of exchange as on 31.12.2014 whereas Income and Expenditure are reported using the average exchange rate in force during the year 2014 as available.

35.16 Considering the nature of company’s business and the type of assets held by the company, there is no indication of loss due to impairment of assets as at 31.03.2017 as per Accounting Standard -28.

35.17 In case of foreclosure of jobs, the fee settled by the client is considered as 100% value of work done and income is accounted for accordingly. In case the settled fee is less than the income already booked, such excess income is charged to revenue under the head “Fees Withdrawn” (Refer Note 30).

35.18 Owing to uncertainty, income from foreign consultancy jobs for the clients against contracts or letters of intent or work orders or exchange of letters, which stipulate fixed price, is recognized on the basis of amount received from the clients against work done. In such cases, the percentage progress method and threshold criteria are not applied.

35.19 In view of the legal opinion obtained on 6.11.90 by the Company from Solicitor General of India, disclosure of quantitative detail of sales, purchases, jobs in progress (both opening & closing) in respect of equipment & components are not required in respect of Companies rendering Consultancy & Supply Services. Further, in view of varieties of materials in different Projects, which cannot be categorized in different groups, it is not possible to list out quantitative details.

35.20 Payments against Supplies & Services from SSI Units are generally made in accordance with agreed credit terms and there is no overdue amount.

35.21 : Disclosure on R&D: (` in lakhs)


Opening Balance of Fund 135.46 125.32

Add : Allocation / Provision made during the year NIL 10.14

Less : Adjustment / Utilisation made during the year NIL NIL

Closing Balance of Fund(Refer Note 20)

135.46 135.46

Necessary R&D Fund have been created debiting P/L account and R&D expenses have been debited to R&D Fund in line with DPE guidelines issued from time to time as applicable.

35.22 : Disclosure on CSR: (` in lakhs)


CSR Projects /Programmes, etc. 55.93 199.37

Others 11.37 21.71

Total Amount Spent 67.30 221.08

Amount unspent out of prescribed allocated sum during the year NIL NIL

133



Necessary CSR & SD Fund have been created debiting P/L account upto the financial year 2013-14 and CSR & SD expenses have been debited to CSR & SD Fund in line with DPE guidelines issued from time to time as applicable. Unspent amount carried forward in CSR & SD Fund is `483.14 lakhs as on 31.03.2017 (Previous Year `483.14 lakhs).

From 2014-15 onwards necessary CSR amount is appropriated / transferred to CSR Activity Reserve and CSR amount spent is adjusted / transferred from CSR Activity Reserve. During the year a sum of ` NIL (Previous Year `168.00 lakhs) is transferred from Surplus to CSR Activity Reserve. Unspent CSR amount carried forward under the head CSR Activity Reserve is `15.25 lakhs as on 31.03.2017 (Previous Year `82.55 lakhs).

35.23 : Disclosure on Specified Bank Notes (SBNs) : In compliance of notification no G.S.R. 308(E) dated March 30, 2017 issued by the Ministry

of Corporate Affairs, Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016 is given below:

Particulars SBNs * Other denomination notes Total

Closing cash in hand as on 08.11.2016 8,02,000.00 1,24,039.72 9,26,039.72

(+) Permitted receipts 1,63,500.00 85,31,095.00 86,94,595.00

(-) Permitted payments - (-) 72,67,439.00 (-) 72,67,439.00

(-) Amount deposited in Banks (-) 9,65,500.00 (-) 1,550.00 (-) 9,67,050.00

Closing cash in hand as on 30.12.2016 - 13,86,145.72 13,86,145.72

* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

35.24 Considering the principle of prudence and conservatism, Deferred Tax Asset is not recognized for taxable loss incurred / carried forward due to uncertainty in sufficient future taxable income.

35.25 During the year 2016-17, provision is made for ` 633.31 lakhs towards pay revision due w.e.f. 01.01.2017 based on information as available / applicable, etc.

35.26 Companies (Accounting Standards) Amendment Rules, 2016 have been issued by Ministry of Corporate Affairs vide notification dated 30.03.2016. Accordingly, accounting policy is changed by the company w.e.f. FY 2016-17 as applicable. The company has adopted cost model for recording the carrying amount of Property, Plant & Equipments each year from the FY 2016-17 in line with Accounting Standard -10 as notified / amended by Ministry of Corporate Affairs on 30.03.2016. Necessary accounting entry/ adjustment is made during the FY 2016-17 due to changes in accounting policy. Gross Block of Property, Plant and Equipment is reduced / adjusted by ` 2,629.62 lakhs, Provision for depreciation is reduced/ adjusted by ` 411.36 lakhs and Revaluation Reserve is reduced / adjusted by ` 2,218.26 lakhs. However, there is no material impact on the Net Profit / Loss due to changes in accounting policy.

134

MECON Limited

NOTE 35.27 : DISCLOSURE UNDER ACCOUNTING STANDARD-17 ON "SEGMENT REPORTING"BuSINESS SEgMENT (PRIMARy SEgMENT) REPORTINg FOR 2016-17

(` In lakhs)

SEgMENTS METALS ENERgy INFRASTRuCTuRE TOTAL

Particular Current year

Previous Year

Current year

Previous Year

Current year

Previous Year

Current year

Previous Year

I. SEgMENT REVENuE

a. Segment Revenue 18,517.16 23,099.16 11,702.74 7,150.86 4,073.01 1,477.67 34,292.91 31,727.69

II. SEgMENT RESuLTS

a. Segment Result [Profit/(Loss)]

(12,296.99) (18,114.93) 526.80 (4,027.69) (2,501.87) (2,789.72) (14,272.06) (24,932.34)

b. Unallocated Corporate Expenses

- (219.38)

c. Operating Profit/(Loss) (14,272.06) (24,712.96)

d. Finance Costs 156.68 191.34

e. Interest Income 4,427.60 5,609.52

f. Income Taxes (429.91) (1,229.10)

g. Non Operating Loss 13.55 4.63

h. Non Operating Income 1,361.90 1,592.14

i. Accretion / (Discretion) to Jobs-in-Progress

(161.47) 236.79

j. Net Profit/(Loss) (8,384.35) (16,241.38)

III. OThER INFORMATION

a. Segment Assets 30,389.99 30,554.46 11,157.84 5,991.00 5,930.92 5,467.18 47,478.75 42,012.64

b. Unallocated Corporate Assets

67,870.52 73,774.72

c. Total Assets 1,15,349.27 1,15,787.36

d. Segment Liabilities 50,091.50 46,115.17 9,155.42 5,972.79 9,470.59 9,365.50 68,717.51 61,453.46

e. Unallocated Corporate Liabilities

31,494.41 28,593.94

f. Total Liabilities 1,00,211.92 90,047.40

g. Non-Cash Expenses other than Depreciation

3,154.78 5,941.92 168.85 201.89 104.10 106.09 3,427.73 6,249.90

h. Capital Employed 9,528.65 18,123.57

135



35.28 NOTES ON SEGMENT REPORTa) “Business Segments” have been identified as Primary Segments in accordance with the guidelines

of “Accounting Standard-17” on Segment Reporting issued by ICAI considering the return/risk profiles of the businesses, the organisation structure and the management reporting system.

b) As a part of business restructuring process, the core business activities of the organisation have been regrouped and classified from four “Strategic Business Units” (SBUs) to three “Strategic Business Units” (SBUs) in line with the recommendation of the Consultants w.e.f. 2016-17 as below:

Segment Definitions:

i) “Metals” includes Iron & Steel, Rolling Mills, Non-Ferrous, Raw Materials & Mining, Refractories etc.

ii) “Energy” includes Renewable Energy, Power plant- Thermal & Hydel, Transmission & Distribution, RLA & RMU studies, Oil & Gas pipelines, Petro-chemical & Refineries, POL Depots, Retail Outlets etc.

iii) “Infrastructure” includes Architecture & Town Planning, Ports & Material Handling, Roads, Highways, Bridges, & Flyovers, Defence, Environmental & Hydro engineering, Management Advisory Services, Information Technology etc.

c) Segment Revenue comprises income from Construction Contracts and income from Engineering & Consultancy Services for the Jobs in India and abroad.

d) Unallocated corporate expenditure includes expenses incurred on corporate services provided to Business Segments and other expenses not allocable on a reasonable basis to Business Segments.

e) Disclosure of Information on Geographical Segment (Secondary Segment) is not made considering the risk and return of business activities / operations being carried out by the company which are not affected by the geographical conditions / locations of the Business Centres / Project Sites etc.

f) Segment Assets and Segment Liabilities represent operating assets and liabilities respectively which are directly attributable to the segment or allocated to the segment on a reasonable basis.

g) Fixed Assets (tangible and intangible) used in the company’s business are common in nature for all by and large and therefore are not directly attributable to the segment or can be allocated to the segment on a reasonable basis.

35.29 Amounts in the Financial Statements and Notes are rounded off to ` in lakhs with two decimal places, except for per share data and as otherwise stated.

35.30 Previous year’s/year-to-date figures have been regrouped / recast wherever necessary in the Balance Sheet, Statement of Profit & Loss, Cash Flow Statement and Notes.

136

MECON Limited

FORM AOC - I

(Statement pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 relating to Associate Companies and Joint Ventures)

Part “B”: Associates and Joint Ventures

Name of Joint Venture M/s Metallurgical & Engineering Consultants (Nigeria) Limited

1. Latest audited Balance Sheet Date For the year ending on 31.12.2014

2. Shares of Joint Ventures held by the company on the year end

No. 5000

Amount of Investment in Joint Venture ` 7.60 lakhs

Extend of Holding % 50%

3. Description of how there is significant influence

Majority of the members of the Board of M/s Metallurgical & Engineering Consultants (Nigeria) Limited are also Directors/ Senior Managerial Personnel of MECON Limited.

4. Reason why the associate/joint venture is not consolidated

Consolidation is not applicable for Joint Venture company.

5. Networth attributable to Shareholding as per latest audited Balance Sheet

(-) ` 309.94 lakhs (50%)

6. Profit / Loss for the year (-) ` 34.38 lakhs

i. Considered in Consolidation Not Applicable

ii. Not Considered in Consolidation Not Applicable


Sd/- Sd/-

(RAVI BAMBhA) (R. h. JuNEJA) COMPANY SECRETARY GENERAL MANAGER (FINANCE)

Sd/-(BIPuL RASTOgI)PARTNERMemb.No.072318Firm Regn. No.000980C

Sd/- Sd/-

(S. ChATTOPADhyAy) (ATuL BhATT) DIRECTOR (PROJECT) CHAIRMAN and MANAGING DIRECTOR

Place : Ranchi

Dated : 14.07.2017

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Glimpses of CSR Activities

MECON LIMITED(A Govt. of India Enterprise)

Head Office Vivekananda Path, Doranda, Ranchi - 834002, Jharkhand, India

CIN No. - U74140JH1973GOI001199www.meconlimited.co.in

For Enquiry ContactGeneral Manager (Marketing)

Phone : +91-651-2480921/2483379, Fax : +91-651-2482214/ 2482189E-mail : [email protected]

½ãìŒ¾ã ‡ãŠã¾ããÃÊã¾ã / MAJOR OFFICES

ÍãÖÀ / City ªîÀ¼ããÓã / Phone ¹ãõŠ‡ã‹Ôã / Fax ƒÃ-½ãñÊã / e-mail

ºãòØãÊãìÁ / Bangalore +91-80-26252000 +91-80-26576352 [email protected]

¶ãƒÃ ãäªÊÊããè / New Delhi +91-11-22447417 +91-11-22041214 [email protected]

¶ãÌããè ½ãì½ºãƒÃ / Navi Mumbai +91-22-27812155-58 +91-22-27812275 [email protected]

‡ãŠãñÊã‡ãŠã¦ãã / Kolkata +91-33-22822381-82 +91-33-22824441 [email protected]

@MECONLimited

/meconranchiFind

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