mcnally bharat engineering company ltd share price Directors report

The Board of Directors and the Resolution Professional (RP) present the 60^thAnnual Report of the Company together with the Audited Standalone and Consolidated Financial Statements (together “the Financial Statements”) and the Auditors Report thereon for the Financial Year ended on 31^stMarch 2023.

CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)

The Company was admitted to Corporate Insolvency Resolution Process (‘CIRP) vide Order dated 29th April 2022 pronounced by the Honble National Company Law Tribunal, Kolkata Bench (‘NCLT) in the Company Application No. C.P. (IB) No.891/KB/2020 under the provisions of Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Insolvency Code).

Mr. Anuj Jain (Registration No. IBBI/IPA-001/IP-P00142/2017-18/10306), Chartered Accountant, was appointed as the Interim Resolution Professional for carrying out the Resolution Process. Vide NCLT Order dated 26th August 2022, Mr. Ravi Sethia (Registration No. IBBI/IPA-001/IP-P01305/2018-2019/12052), Chartered Accountant was appointed, as the Resolution Professional to manage the Companys affairs, business, and assets during the Resolution Process.

In terms of the NCLT Order dated 29^th April 2022 read with the provisions of Sections 17 to 23 of the Insolvency Code, since the commencement of CIRP, the powers of the Companys Board of Directors and its Committees have remained suspended and are vested with the Resolution Professional.

FINANCIAL HIGHLIGHTS

The Financial Statements for the financial year ended 31^stMarch 2023 forming part of this Annual Report have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.

The highlights of Standalone Financial Statements are set out below: Rs in Lakhs

Particulars	2022-23	2021-22
(A) PROFITABILITY
1 Gross Total Revenue	27,006.31	31,556.68
2. Total Expenses (except depreciation, amortization and finance costs)	54,425.97	34,000.93
3. Finance Costs	193,536.72	4,660.53
4. Depreciation & Amortizations	396.87	609.45
5. Total Expenses (2+3+4) )	248,359.56	39,270.91
6. Profit/(Loss) before Exceptional/ Extraordinary items	(221,353.25)	(7,714.23)
7. Exceptional/Extraordinary items	25,767.49	-
8. Profit/(Loss) before Tax	(247,120.74)	(7,714.23)
9. Profit/(Loss) after Tax	(247,120.74)	(7,714.23)
10. Other Comprehensive Income	9.04	42.79
11. Total Comprehensive Income	(247,111.70)	(7671.44)
(B) ASSETS & LIABILITIES
1. Non-Current Assets	54,123.90	72,447.06
2. Current Assets	1,55,382.06	1,82,727.23
3. Total Assets (1+2)	2,09,505.96	2,55,174.29
4. Equity Share Capital	21,157.08	21,157.08
5. Other Equity	(3,53,712.41)	(22,796.45)
6. Non-Current Liabilities	283.28	15,080.91
7. Current Liabilities	5,41,778.02	2,41,732.75
8. Total Equity & Liabilities (4+5+6+7)	2,09,505.97	2,55,174.29

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the

Companies Act, 2013 (“the Act”) the Directors hereby

confirm that:

i. in preparation of Annual Accounts, the applicable Accounting Standards have been followed and there has been no material departure;

ii. they have selected accounting policies which were applied consistently and the Directors 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 as at 31^stMarch 2023 and of the profits/losses for the year ended on that date;

iii. they have 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. they have prepared the annual accounts on a “going concern” basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Resolution Professional confirms the Directors Responsibility Statement as set out above.

PERFORMANCE

The annexed Management Discussion and Analysis forms part of this report and covers, amongst other matters, the performance of the Company during the Financial Year 2022-23 as well as the future outlook.

CORPORATE GOVERNANCE REPORT

In accordance with Regulation 34(3) read with Schedule V(C) of the Listing Regulations, the report on Corporate Governance along with the certificate from the Statutory Auditors is attached and forms part of this Annual Report.

TRANSFER TO RESERVE

No amount is proposed to be transferred to General Reserve during the year.

DIVIDEND

In view of prevailing business conditions, the Board of Directors and the Resolution Professional decided not to recommend dividend to the Equity Shareholders for the Financial Year 2022-23. Further, in view of the accumulated losses, no dividend will be rewarded to the Non-Convertible Preference Shareholders, though they are entitled to receive dividend at a fixed rate of 11.50% on the Non-Convertible Redeemable Preference Shares of Rs 100/- each.

BOARD MEETINGS

The Board met 6 (six) times during the Financial Year Ze. 19 ^th April 2022, 30^th May 2022, 13^th August 2022, 12^th November 2022, 13^th February 2023 and 30^th March 2023.

DIRECTORS

The Shareholders approved by Special Resolution through postal ballot including e-voting, the continuation of appointment of Mr. Nilotpal Roy (DIN00087298) as non-executive Independent Director beyond the age of 75 years in his current tenure valid till 13^th February 2025, and not liable to retire by rotation.

At the first Board meeting for the financial year 202223 being held today ie. 26^th May 2023, the Independent Directors have confirmed, as required under sub section (7) of Section 149 of the Act read with Regulation 25(8) of the Listing Regulations, that they meet the criteria of independence required under sub-section (6) of Section 149 of the Act and clause (b) of sub-regulation (1) of Regulation 16 of the Listing Regulations. The Board, after undertaking due assessment of the veracity of the declaration submitted by the Independent Directors under sub section (6) of Section 149 of the Act read with sub-regulation (9) of Regulation 25 of the Listing Regulations, was of the opinion that the Independent Directors meet the criteria of independence.

Mr. Aditya Khaitan (DIN 00023788) retires by rotation at the forthcoming Annual General Meeting and being eligible, the Directors recommend the re-appointment of Mr. Khaitan as a Director on the Companys Board.

In terms of Regulation 17(1A) of Listing Regulations, the Directors recommend the continuation of appointment of Mr. Asim Kumar Barman (DIN 02373956) as Independent Director on the Companys Board upon attaining 75 years of age on 16th November 2023, in his current term valid till 22nd December 2025.

KEY MANAGERIAL PERSONNEL

As on 31st March 2022, Mr. Srinivash Singh (DIN 00789624) was the Managing Director of the Company. After commencement of Corporate Insolvency Resolution Process under the Insolvency Code, the Committee of Creditors at its first meeting held on 3rd June 2022 had agreed upon re-designating Mr. Srinivash Singh as Managing Director and Chief Executive Officer (MD &CEO). His current office as Managing Director under the Companies Act, 2013 having expired on 13th December 2022, the Committee agreed upon his continuation of office as Chief Executive Officer (CEO) with effect from 14th December 2022. Mr. Srinivash Singh has since been the CEO of the Company.

BOARD COMMITTEES

The Board had 5 (five) committees namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Committee of Directors during the Financial Year 2022-23.

The Board has a defined set of guidelines, duties and responsibilities and an established framework commensurate with the applicable provisions of the Companies Act and Listing Regulations for conducting the meetings of the said Committees. A detailed note on the Board of Directors and its committees, their scope etc. is provided under the Corporate Governance Report section of this Annual Report.

The Corporate Social Responsibility Committee was dissolved on 12 ^th November 2022 as the criteria determining formation of the Committee under Section 135 of Companies Act, 2013 was no longer applicable to the Company.

CORPORATE SOCIAL RESPONSIBILITY

The Companys Corporate Social Responsibility (CSR) Policy formulated in accordance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 can be accessed on the Company website at the following link: https://www.mcnallybharat. com/assets/pdf/investor/policy/MBECL-CSR%20

Policy-%20Revised%202022.pdf .

The Company was not required to spend any amount on CSR activities during the Financial Year 2022-23as it had incurred losses during the 3 (three) immediately preceding financial years.

COMPANY POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND SENIOR MANAGEMENT PERSONNEL APPOINTMENT AND REMUNERATION

The Companys Remuneration Policy for the members of the Board, Key Managerial Personnel and Senior Management Personnel formulated in accordance with Section 178 of the Act read with the Regulation 19(4) of the Listing Regulations can be accessed on the Company website at the following linkhttps:// www.mcnallybharat.com/assets/pdf/investor/policy/ remuneration-policy.pdf .

The salient features of the Remuneration Policy are as under:

Aims & Objectives:

1) The remuneration policy seeks to enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholder interests, industry standards and relevant Indian corporate regulations.

2) The remuneration policy will ensure that the interests of Board members & senior executives are aligned with the business strategy and risk tolerance, objectives, values and long-term interests of the Company and will be consistent with the “pay-for-performance” principle.

3) The remuneration policy will ensure that remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.

Principles of Remuneration

a) Support for Strategic Objectives: Remuneration and reward frameworks and decisions shall be developed in a manner that is consistent with, supports and reinforces the achievement of the Companys vision and strategy.

b) Transparency: The process of remuneration

management shall be transparent, conducted in good faith and in accordance with appropriate levels of confidentiality.

c) Internal equity: The Company shall remunerate the Board members, KMP and senior management in terms of their roles within the organization. Positions shall be formally evaluated to determine their relative weight in relation to other positions within the Company.

d) External equity: The Company strives to pay an equitable remuneration, capable of attracting and retaining high quality personnel. Therefore the Company will remain logically mindful of the ongoing need to attract and retain high quality people, and the influence of external remuneration pressures. Reference to external market norms will be made using appropriate market sources, including relevant and comparative survey data, as determined to have meaning to the Companys remuneration practices at that time.

e) Flexibility: Remuneration and reward offerings shall be sufficiently flexible to meet both the needs of individuals and those of the Company whilst complying with relevant tax and other legislation.

f) Performance-Driven Remuneration: The Company shall entrench a culture of performance driven remuneration through the implementation of the Performance Incentive System.

g) Affordability and Sustainability: The Company shall ensure that remuneration is affordable on a sustainable basis.

ENERGY CONSERVATION MEASURES

The Company maintained highly focused energy conservation efforts throughout the financial year.

Energy conservation measures taken during the year included:

(i) routine steps like strict control and monitoring the consumption of energy on a continual basis;

(ii) preventive maintenance of machines like AC units, DG sets etc. resulting in optimal usage of electrical parts;

(iii) installation of LED lamps extensively across all sections of the Head Office and Sites, including flood lights;

(iv) Installation of several energy saving equipment progressively throughout the year.

Operational measures included setting of benchmarks with respect to the current year with targets for increased savings, initiatives by energy conservation committees comprising of cross functional groups, close monitoring

and performance evaluation of plant and machinery by conducting regular self-audit and upgradation of equipment used at the sites.

Some of the actions planned for next year include replacement of remaining conventional lamps with energy efficient LED lamps.

FOREIGN EXCHANGE EARNINGS & OUTGO

During the Financial Year 2022-23, the foreign exchange earnings of the Company amounted to Rs 397.13 as against Rs 321.60 Lakhs in the previous year. The expenditure in foreign exchange during the Financial Year was Nil compared to Rs 1.42 Lakhs in the previous year.

AUDITOR AND AUDITORS REPORT

At the 58^thAnnual General Meeting of the Company held in year 2021, the Shareholders had approved the appointment of M/s. V. Singhi and Associates, Chartered Accountants (Firm Registration Number 311017E) as the Statutory Auditors of the Company to hold office for 5 (five) consecutive years from the conclusion of the 58^th Annual General Meeting till the conclusion of the 63^rd Annual General Meeting.

The Report of Auditors contains adverse opinion on the Standalone Financial Statements to which clarification of the Board is furnished hereunder:

Sl. No. Adverse opinion	Boards clarification
1 a) Current Assets and Capital Work-in-Progress
i. We draw attention to Note 50 to the Standalone Financial Statements regarding Trade Receivables, Advance to Suppliers, Trade Payables, Other Financial Assets and Advance from Customer being subject to confirmation and reconciliation from respective parties and consequential reconciliation, outcomes of pending arbitration/settlements of claims and adjustments arising therefrom, if any. Adjustments/ Impacts with respect to these are currently not ascertainable and as such cannot be commented upon by us. ii. Claims Recoverable (BG encashed) amounting to 36,252.08 Lakhs, including 13,690.09 Lakhs under arbitration are doubtful. Adjustments/ Impacts with respect to these are currently not ascertainable and as such cannot be commented upon by us. iii. There is no material movement in Capital Work-in-Progress amounting to 462.62 Lakhs, since 31st March, 2016. In absence of any audit evidence, we are unable to ascertain the impact/ adjustments required and comment on the same.	Recoverability of Trade Receivables, Other Financial Assets and Other Current Assets, including Claims recoverable depends upon the outcome of Arbitration Orders and confirmation / reconciliation with parties as stated in Note No. 50. Therefore, adjustments / impact with respect to these are currently not ascertainable.
2 b) Non-adjustment of the Carrying Value of Loans In earlier years, the Company had given unsecured loan to Vedica Sanjeevani Projects Private Limited (“VSPL”). VSPL vide their letter dated 15th February, 2022 informed the Company that it was unable to service the debt and requested the Company for a moratorium on the repayment of the loan, including interest for two years i.e., Financial Year 2021-22 and Financial Year 2022-23. Subsequently, the Company has stopped recognizing interest income on the same. In absence of any further communication between the Company and VSPL made available to us, we are unable to comment on the realisability of loan and its interest and consequential adjustment to be made in the books. This constitutes a material departure from the requirements of Indian Accounting Standard - 109 “Financial Instruments”.	In the absence of any further communication with Vedica, the Company is unable to estimate the impact.
Sl. No. Adverse opinion	Boards clarification
3 c) Recognition of Deferred Tax Assets Note 7 to the Standalone Financial Statements mentions that the Company had recognized deferred tax assets of 51,706.60 lakhs up to 31st March, 2018, which is being carried forward in the books by the Company expecting adequate future taxable profits after infusion of fresh funds in the Company by the successful Resolution Applicant against which such deferred tax assets would be adjusted. The Company has been continually incurring losses and its net worth has been fully eroded. Approval of Resolution Plan is in progress, and we are unable to obtain sufficient appropriate audit evidence with respect to the managements assertions and are therefore, unable to comment on the carrying value of the aforesaid net deferred tax assets on 31st March, 2023. This constitutes a material departure from the requirements of Indian Accounting Standard 12 “Income Taxes”.	The Company believes that based on the infusion of fresh funds coming to the Company with the Investors support there will be adequate future taxable profits available to the Company against which the Deferred Tax Assets can be utilised. However, the Company has not recognised further Deferred Tax Assets thereafter on prudent basis.
4 d) Change in Accounting Estimates and Errors Note 39 to the Standalone Financial Statements, states that the Company has not restated the Standalone Financial Statement of previous year in which the accounting mistakes/ misstatements occurred. Further, as explained to us, the Company has not approached “National Company Law Tribunal” (NCLT) as per the provisions of sections 131 of the Companies Act 2013, which require prior approval of NCLT for recasting of earlier period financial statements.	The Company had been categorized as Non-Performing Asset by the lender banks and majority of banks stopped debiting interest on their outstanding debts. Accordingly, the Company has not recognized interest expense on the borrowings. On initiation of Corporate Insolvency Resolution Process (CIRP) and subsequent submission of claims by lender banks, the company has provided interest for prior period also. However, retrospective reinstatement is impracticable under the circumstances.

SECRETARIAL AUDITORS

In accordance with the provisions of Section 204 of the Companies Act 2013, M/s. A. K. Labh & Co., Company Secretaries, were appointed as the Secretarial Auditors of the Company for the Financial Year ended on 31^st March 2023.

The Secretarial Audit Report for the Financial Year 202223 submitted by the Secretarial Auditors contains audit qualifications to which Management response has been duly furnished. The Secretarial Audit Report is annexed and forms part of the Annual Report.

The certificate from the Practicing Company Secretary pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the Listing Regulations with respect to non-disqualification of Directors of the Company as on 31^st March 2023 is also annexed and forms part of the Annual Report.

SECRETARIAL STANDARDS

During the year, the Company has complied with applicable Secretarial Standards.

COST RECORDS & COST AUDITORS

During the Financial Year, the Company has maintained cost records in accordance with Section 148 of the Companies Act, 2013 read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 as specified by the Central Government in this regard.

M/s A. Bhattacharya & Associates, Cost Accountants (Firm Registration No. 100255) has been appointed the Cost Auditor of the Company to audit the cost records for the Financial Year 2022-23 as required under Section 148(3) of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

RELATED PARTY TRANSACTIONS

The contracts, arrangements and transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and were on arms length basis. During the year, there has been no materially significant related party transaction made by Promoters, Directors, Key Managerial Personnel (KMP) of the Company which may have a potential conflict of interest with the Company at large.

The particulars of contracts or arrangements with related parties, referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2 is enclosed as Annexure 1 which forms part of this Report.

The Policy on Related Party Transactions approved by the Board can be accessed on the Company website at the https://www.mcnallybharat.com/assets/pdf/investor/ policy/related-party-transaction-policy.pdf

The details of Related Party Transactions are set out in Note No. 26 to the Standalone Financial Statement.

EXTRACT OF ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act, 2013 read with rules made thereunder, the Annual Return of the Company in Form MGT-7 has been placed on the Company website at the link https://www. mcnallybharat.com/assets/pdf/investor/annual- return/Draft%20Annual%20Return%202022-23.pdf

LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees, securities and investments made by the Company during the Financial Year 2022-23, along with the purpose for which such loan or guarantee or security is utilized/proposed to be utilized are provided in Note Nos. 12 and 5 of the accompanying Standalone Financial Statements.

DEPOSITS

During the Financial Year 2022-23 the Company did not accept any deposits from the public.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In accordance with Section 177(9) of the Act and rules framed thereunder read with Regulation 22 of the Listing Regulations, the Company has a Whistleblower Policy in place for its Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct.

The Policy provides for protected disclosures for the Whistleblower. Disclosures can be made through e-mail or letter to the Whistle Officer or to the Chairperson of the Audit Committee.

The Whistleblower Policy can be accessed on the Company website at the link https://www.mcnallybharat.com/ assets/pdf/investor/policy/MBECL-Whistleblower%20 Policy-Revised%202022.pdf

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a policy for prevention of sexual harassment at the workplace, which can be accessed on its website at https://www.mcnallybharat.com/assets/ pdf/investor/policy/MBECL%20Policy%20for%20 Prevention%2 0of%2 0Sexual%2 0Harassment%2 0 (UPDATED).pdf In accordance with the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”) and rules made thereunder, the Company has constituted an Internal Complaints Committee (ICC).

During the Financial Year 2022-23, the ICC did not receive any complaint. The Company has filed necessary returns as required to be filed under the POSH Act.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURES

In terms of NCLT Order dated 24th February 2023 passed under section 31 of the Insolvency & Bankruptcy Code, 2016 in the matter of McNally Sayaji Engineering Limited, the company ceased to remain a subsidiary of McNally Bharat Engineering Company Limited as on 31st March 2023.

As on 31st March 2023, the Company had only 1 (one) Indian subsidiary company namely, McNally Bharat Equipments Limited and 2 (two) overseas subsidiaries, namely, (i) MBE Mineral Technologies Pte Limited and (ii) MBE Minerals Zambia Limited.

The Company is the Lead Partner in the following 3 (three) Joint Ventures namely:

- McNally-AML (JV)

- McNally-Trolex (JV)

- McNally-Trolex-Kilburn (JV)

During the year under review, the Board of Directors reviewed the applicability of “material subsidiaries” in accordance with Regulation 16 read with Regulation 24 of the Listing Regulations.

CONSOLIDATION OF ACCOUNTS

In accordance with Section 129(3) of the Act, the Company, in respect of the Financial Year ended 31^st March 2023 has prepared, in addition to the Standalone Financial Statements of the Company, the Consolidated Financial Statements of the Company and its subsidiaries, which form part of the Annual Report. Further, the report on the performance and financial position of each of the subsidiaries and joint ventures and salient features of their financial statements in the prescribed Form AOC-1 is annexed to the Financial Statements of the Company and hence are not repeated here for the sake of brevity.

Information pursuant to Rule 8(1) of the Companies

(Accounts) Rules, 2014 regarding financial highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during the period under report is given hereinbelow:

Figure in Rs Lakhs

Sl. No. Subsidiary Companies	Business Activities	Turnover	Profit/ (Loss)
1 McNally Bharat Equipments Limited	Project management consultant for revamping Gujarat Mineral Developments Corporation Limited (GMDC)s existing fluorspar beneficiation plant at Kadipani.	130.60	8.37
2 MBE Mineral Technologies Pte Limited	There was no business activity during the period under review.
3 MBE Minerals Zambia Limited	There was no business activity during the period under review.	-	-

Further, in accordance with Section 136 of the Act, the audited Financial Statement, including the Consolidated Financial Statement and related information of the Company and audited financial statements of its subsidiaries are available on the Company website www.mcnallybharat.com, in a downloadable format.

DIRECTORS & KMP REMUNERATION

All the Directors of the Company are Non-executive Directors and majority are Independent Directors.

a) the ratio of the remuneration of each Director to the median remuneration of employees during the Financial Year:

Name of Director	Remuneration	Ratio to median
	Rs in Lakhs	remuneration
Mr. Srinivash Singh-	219.96	78.87:1
Managing Director*

*Ceased to be Managing Director w.e.f. 14^th December 2022.

b) the percentage increase in remuneration of each Director, CFO,CEO,CS or Manager, if any, in the Financial Year:

Sl No. Name	Total Remuneration 2022-23 Rs in Lakhs	Total Remuneration 2021-22 Rs in Lakhs	Percentage Increase/ (Decrease)
1 Managing Director (Note 1)	154.33	201.84	N/A
2 Chief Executive Officer (Note 2)	65.63		N/A

 

Sl No. Name	Total Remuneration 2022-23 Rs in Lakhs	Total Remuneration 2021-22 Rs in Lakhs	Percentage Increase/ (Decrease)
3 Chief Financial Officer (Note 3)	29.11	64.17	N/A
4 Chief Financial Officer (Note 4)	34.49		N/A
5 Company Secretary	38.21	12.69	N/A

Note 1: Mr. Srinivash Singh was the Managing Director till expiry of his 3-year term on 13^th December 2022. He was an Executive Director.

Note 2: Effective 14^th December 2022 Mr. Srinivash Singh is the Chief Executive Officer without being on the Companys Board.

Note 3: Mr. Brij Mohan Soni was the Chief Financial Officer till 7th September 2022.

Note 4: Mr. Pradyuman Baidya was appointed Chief Financial Officer w.e.f 14^th September 2022.

c) the percentage decrease in the median remuneration of the employees in the Financial Year 2022-23 was 40.78%;

d) the number of permanent employees on the rolls of the Company as at the end of the Financial Year was 190;

It is hereby affirmed that the remuneration of Directors and Key Managerial Personnel are as per the Remuneration Policy of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND RISK MANAGEMENT SYSTEMS

Compliance of Internal Financial Controls and Risk Management Systems are given in the Management Discussion & Analysis.

BOARD EVALUATION

The scope of Board Evaluation during every financial year includes the performance evaluation of the Board of Directors as a whole, individual members and functional committees thereof. The Company being subject to the Corporate Insolvency Resolution Process vide NCLT Order dated 29^th April 2022, the Board of Directors was suspended with immediate effect under Section 17 of the Insolvency Code and hence, no Board Evaluation was conducted during the year 2022-23.

OCCUPATIONAL HEALTH & SAFETY

McNally Bharat Engineering Company Limited is an Occupational Health, Safety & Environment Management System (ISO 45001: 2018, ISO 14001: 2015) certified company with a brief scope of project management, design, manufacturing, supply, construction, erection & commissioning of industrial and infrastructure development projects on turnkey basis and construction of industrial and infrastructure development projects.

The Company is committed to Occupational Health, Safety &Environment (OHS&E) and capable of meeting the national and international OHS&E requirements. In line with the said OHS&E requirement, the organization has a consolidated OHS&E Management System Manual with risk assessment, legal requirement review, periodic audit, training, inspection, incident reporting or investigation and other operational procedures to ensure OHS&E compliance at the Companys Projects and O&M sites.

There exists a system of regular updating through Daily OH&S Message via email to all users of the Company in order to create awareness on OH&S requirements at its workplaces. There is a common sharing in-house intranet webpage (“MBE Bridge”) containing OHS&E policy, manual, different operational control procedures, checklists, rewards/certificates and training models for employees to access. The organization focused on Employee Health & Safety awareness training through online or offline mode and conducted several online training on Job Safety Analysis (JSA), Risk Assessment, Behavior Based Safety (BBS), Process Safety Management (PSM), Contractor Safety Management and Industrial best safety practices in addition to regular training modules (ie. in-house or by external agencies) during the Financial Year 2022-23.

The Company constantly strives to achieve Zero Fatality or Environmental Harm and in order to bring it into reality, sets target to reduce Total Reportable Incident Rate (i.e. TRIR which was 0.76 in the Financial Year 201213 came down to 0.25 in 2022-23). This low incident rate in EPC Company shows a sustainable improvement in Occupational Health, Safety & Environment Management System compared to other EPC firms in India.

The Company had taken many preventive measures on the spread of COVID-19 at office and jobsites, so as to control coronavirus infections among employees and service partners. Initiatives like, following State/Central Government guidelines/protocols relating to COVID-19 (ie. restrictions in duty hours, social distancing, thermal checking, wearing of 3-layered nose mask & hand sanitization etc.), weekly basis office sanitization, vaccination to all employees at office and rapid testing of all site based employees were highly appreciated by many customers.

AWARDS AND RECOGNITION

In recognition of Companys excellence in Safety Measures at Project sites, eminent customers/clients namely, Bharat Petroleum Corporation Limited (BPCL), NTPC Limited, West Bengal Power Development Corporation Limited (WBPDCL), Tata Power Limited (TPL), HPCL-Mittal Energy Limited (HMEL), Hindustan Zinc Limited (HZL, Vedanta Group) and Coal India Limited (CIL) had conferred Merit Certificate or Certificate of Appreciation.

The Company successfully maintained LTI (Loss Time Injury) free records at prestigious project sites, namely, Zawar Mines (ZM), Sindesar Khurd Mine (SK Mine) & Rampura Agucha Mine (RAM) of Hindustan Zinc Ltd, Delhi Metro Rail Corporation (DMRC)-Kochi, Directorate General for Married Accommodation Project (DG MAP) (Udhampur and Srinagar), Chennai Petroleum Corporation Limited (CPCL)-Chennai, Adani Infrastructure Management Services Ltd. (Rajasthan), Adani Enterprises Limited (Chhattisgarh), Odisha Coal and Power Limited (OCPL) and Andhra Pradesh Power Generation Corporation Limited (APGENCO).

The Company won 5-Star rating on Safety Management System Audit at HMEL Bhatinda (Coal Handling System- O&M) site for Best Safety Performance.

The Company was also conferred upon national and international awards for Best Safety Performance at Project sites which testifies a robust and sustainable occupational health & safety culture within the organization:

Project Sites	Award	Year	Awarded by
NTPC Bongaigaon (Coal, Lime & Gypsum Handling Package) NTPC Limited	National Safety Award (Mines)	2012	Ministry of Labour & Employment, Government of India
ACC Jamul (Cement Plant) ACC Limited	National Safety Award (Mines)	2015	Ministry of Labour & Employment, Government of India
TPL Kalinganagar (3x67.5MW Gas Based Thermal Power Plant Project) Tata Projects Limited	National Safety Award (Mines)	2014	Ministry of Labour & Employment, Government of India
IISCO Burnpur, (RHMS, By Product & Water Package), Steel Authority of India Limited	RoSPA Health & Safety Awards	2013	The Royal Society for the Prevention of Accidents, UK
Rourkela Steel Plant (Stock house, new CHP & Inter Plant), Steel Authority of India Limited	RoSPA Health & Safety Awards	2013	The Royal Society for the Prevention of Accidents, UK
Balance of Plant (BOP), Satpura Thermal Power Station, Madhya Pradesh Power Generation Company Limited (MPPGCL).	RoSPA Health & Safety Awards	2014	The Royal Society for the Prevention of Accidents, UK
2x500MW Sagardighi Thermal Power Plant, CHP, Phase#2, West Bengal Power Development Corporation Limited (WBPDCL)	RoSPA Health & Safety Awards	2014	The Royal Society for the Prevention of Accidents, UK

SIGNIFICANT & MATERIAL ORDERS

During the Financial Year 2022-23, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operation in future.

MATERIAL CHANGES & COMMITMENTS The corporate insolvency resolution process which had commenced vide NCLT Order dated 29^th April 2022 under the Insolvency and Bankruptcy Code 2016 had come to an end on 22 ^nd April 2023 on completion of the period stipulated under the Code. The Resolution Professional filed on application bearing IANo. 848/KB/2023 before the Honble NCLT seeking extension of the CIRP period. The IA was heard on 19th May, 2023 and the order referred by the Honble Tribunal.

The complaint Resolution plans having received from the Resolution Applicant efforts are being taken by the Resolution Professional to submit the same for approval of the appropriate authority under the Code. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with sub-rule(2) of Rule 5

of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and forms part of this Report.

CAUTIONARY STATEMENT

Risks, uncertainties or future actions could differ materially from those expressed in the Directors Report and the Management Discussion and Analysis. These statements are relevant on the date of this Report. We have no obligation to update or revise these statements, whether as a result of new information, future developments or otherwise. Therefore, undue reliance should not be placed on these statements. ACKNOWLEDGEMENT

The Board takes this opportunity to thank all employees for their commitment, dedication and co-operation. The Board would also like to thank all the customers, investors including Banks and other business associates who have extended valuable support and encouragement.

For McNally Bharat Engineering Company Limited

(A Company under Corporate Insolvency Resolution Process)

Ravi Sethia Resolution Professional Registration No. IBBI/IPA-001/IP-P01305/2018-2019/12052

	Asim Kumar Barman	Kasturi Roy Choudhury
26th May 2023	DIN:02373956	DIN 06594917
Kolkata	Director	Director