McNally Bharat Engineering Company Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The global economic environment continues to remain characterised by geopolitical tensions, trade and tariff uncertainties, volatility in energy prices and continuing adjustments in global supply chains. The conflicts in different regions, together with changing trade policies among major economies, have increased uncertainty for businesses operating across sectors. For engineering, procurement and construction (EPC) companies, these developments can influence the availability and cost of materials, equipment, logistics and project financing. The Company therefore continues to approach the external environment with caution, with emphasis on project selection, execution discipline and prudent management of resources.

The Indian economy, however, continues to demonstrate resilience despite the external uncertainties. Domestic demand, public investment and infrastructure-related activity remain important contributors to economic activity. The Economic Survey 2025-26 estimated real GDP growth of 7.4% for FY 2025-26 and highlighted the continued support from domestic demand and public investment, while also noting risks arising from global trade disruptions and external uncertainties.

The economic environment entering FY 2026-27 remains supportive in several areas relevant to the Companys business, particularly infrastructure, industrial development, mining, metals, power and related engineering activities. At the same time, the operating environment remains competitive and project awards continue to require careful evaluation of commercial terms, execution conditions, working-capital requirements and counterparty risks.

The Reserve Bank of India has also highlighted the continuing risks arising from geopolitical developments, energy prices, supply-chain disruptions and global financial-market volatility. While the domestic economy remains relatively resilient, these factors could affect the pace of investment and project execution in individual sectors.

Against this backdrop, the Company is focused on strengthening its core engineering and project execution capabilities. McNally Bharat has historically operated across engineering and construction activities associated with sectors such as material handling, power, mining, metals and infrastructure. The Companys current priority is to utilise these capabilities selectively, while maintaining appropriate commercial and financial discipline.

The Companys approach in the present environment is therefore one of measured participation rather than aggressive expansion. Opportunities in the domestic market will be evaluated based on technical suitability, execution feasibility, financial viability and the Companys ability to manage the associated project risks. Particular attention will continue to be given to cash-flow management, timely execution of projects, strengthening of customer and vendor relationships and maintaining an efficient operating structure.

The Company also recognises that technology is becoming increasingly relevant to engineering and project execution. Digital tools, data analytics and artificial intelligence are gradually influencing project planning, risk identification, monitoring and maintenance practices. The Company will continue to evaluate such applications where they can provide practical benefits in engineering, project management and operations.

Sustainability is also becoming an increasingly relevant consideration across the core sectors in which the Company operates. Areas such as mineral beneficiation, water management, resource efficiency and cleaner industrial processes are creating requirements for engineering solutions that improve efficiency while reducing environmental impact. The Companys existing engineering experience in these areas provides a relevant base for participating selectively in such opportunities.

In the current environment, the Company remains conscious that the availability of opportunities alone is not sufficient to ensure sustainable performance. The ability to select appropriate projects, execute them efficiently, manage working capital and preserve organisational capabilities will remain critical to the Companys performance. Accordingly, managements immediate emphasis remains on strengthening the operating foundation of the Company and building sustainable business activity on the basis of its established engineering and project-management capabilities.

COMPETITIVE ADVANTAGE, EXTERNAL VIEW & INTERNAL VIEW

The Companys competitive position is built around its established engineering capabilities, project management experience, sectoral references and operational knowledge developed over several decades. In the present business environment, these strengths remain relevant, although their effective utilisation requires disciplined project selection, adequate financial resources, appropriate manpower and close monitoring of execution.

The Company continues to view its competitive advantage through four principal areas: Technology Prowess; Project Management & References; Operations & Maintenance; and Culture & Technology Absorption.

1. Technology Prowess

The Companys pedigree has historically been based on design and engineering-led solutions. Its experience in areas such as bulk material handling, mineral beneficiation, mining, power and related industrial applications has enabled it to develop domain knowledge and engineering capabilities across several core sectors.

The Internal View

The Company has experienced a reduction in its engineering workforce and a decline in the order pipeline over the past few years, which has resulted in some of its engineering capabilities, particularly in the mineral beneficiation segment, not being utilised to their full potential. Strengthening the engineering base and reconnecting with the market will therefore remain important to the Companys operating position.

The Companys technology-oriented approach remains an important differentiating factor in sectors where customers require engineering solutions rather than construction capability alone. The Company will continue to focus on leveraging its existing knowledge and established technology relationships in areas where it can compete on technical capability and execution experience.

Impact of War and Geopolitical Developments

The Companys principal operating focus remains the domestic market. Its historical access to international markets in the Middle East, Africa and other regions provides an additional reference base; however, geopolitical conditions require a selective approach to international opportunities. Projects and supplies involving higher geopolitical or execution risks will require appropriate evaluation of commercial, financial and operational considerations.

Impact of Artificial Intelligence

Artificial Intelligence and digital technologies are increasingly influencing engineering and industrial processes. For an engineering-led EPC organisation, their relevance extends to design support, project monitoring, risk identification, data analysis and process optimisation. The Company will examine practical applications of these technologies where they can improve engineering effectiveness, project visibility and customer value.

Impact of Sustainability

The Companys experience in mineral beneficiation, water-related applications and other resource-intensive sectors provides a base for addressing the increasing requirement for efficient use of natural resources. The transition towards cleaner industrial processes is also increasing the importance of technologies that can improve resource recovery, energy efficiency and environmental performance. The Company will continue to assess technology partnerships and applications that are commercially viable and relevant to its areas of operation.

2. Project Management & References

The Company has developed significant project management capabilities through its participation in large projects in the power, material handling, mining, metals and infrastructure sectors. Its project references constitute an important part of its market credibility and provide evidence of its ability to undertake technically complex projects.

The Internal View

Effective project management remains central to the Companys ability to execute projects and protect value. In the present circumstances, particular importance is attached to monitoring cash flows, completing existing and new projects efficiently, controlling project costs and carefully evaluating new orders before commitment.

The Company has an established vendor and subcontractor base which can support project execution. While the Companys earlier manufacturing capabilities provided greater control over certain critical equipment and lead times, the present operating model requires effective coordination with external vendors and suppliers. The Companys project management systems, procedures and standard operating practices therefore remain important operational assets.

Past project references, including references in coal handling and other core-sector projects, continue to provide the Company with an established base when participating in new opportunities. Maintaining the quality of execution and strengthening customer relationships will be important in converting these references into future business opportunities.

Impact of War and Geopolitical Developments

Geopolitical developments can affect the availability and cost of equipment, logistics and other project inputs. The Company will therefore continue to exercise caution in evaluating projects in geopolitically sensitive regions. The domestic market remains the principal area of focus, where opportunities will be evaluated based on commercial viability, execution requirements and risk-adjusted returns.

Impact of Artificial Intelligence

The Company has experience of applying technology to project risk management. Its project management framework has historically incorporated analytical approaches for identifying and categorising risks in pre-bid and post-bid situations. The Company sees scope for further application of digital and AI-enabled tools in project monitoring, risk assessment, scheduling, cost control and management reporting.

The emphasis, however, will remain on practical applications that improve decision-making and execution rather than technology adoption for its own sake.

Impact of Sustainability

The Companys project experience includes sectors such as water, solar and mineral beneficiation, which are relevant to the broader transition towards resource efficiency and sustainable infrastructure. The Companys engineering and project management capabilities can support customers seeking to improve efficiency and environmental performance.

The Company will continue to monitor adjacent opportunities where its existing engineering and construction capabilities are relevant, while maintaining discipline in the selection of projects.

3. Operations & Maintenance

Operations and Maintenance has historically provided the Company with a relatively stable area of activity and has supported the business during periods of weakness in other segments. The segment also provides an opportunity to maintain continuing relationships with customers beyond the original project execution phase.

The Internal View

The Company has an experienced O&M team and established operational knowledge. The immediate emphasis is on maintaining service quality, operational efficiency and customer relationships while strengthening the contribution of this segment to the overall business.

The recurring nature of O&M activity, together with the Companys familiarity with customer installations and operating environments, remains an important strength.

Impact of War and Geopolitical Developments

The Companys O&M activities are primarily linked to domestic operations and are therefore relatively less exposed to direct disruption from international conflicts. Nevertheless, the Company remains attentive to the indirect effects of geopolitical developments on equipment availability, energy costs and supply chains.

Impact of Artificial Intelligence

AI-enabled predictive and prescriptive maintenance is changing the way industrial assets can be monitored and maintained. The Companys existing experience in condition monitoring provides a relevant foundation for adopting such technologies where they can improve equipment reliability and customer value.

At the same time, effective O&M remains dependent on skilled personnel and field-level knowledge. The Company will therefore continue to focus on both technology adoption and development of the technical workforce.

Impact of Sustainability

Operational efficiency, equipment reliability, safety and reduction of avoidable resource consumption are integral to responsible O&M practices. The Company will continue to maintain its focus on safety and efficient operation of customer assets as part of its service proposition.

4. Culture & Technology Absorption

The Companys culture has historically placed considerable emphasis on engineering and technical capability. Its experience across mining, mineral processing, ports, material handling and other core industrial sectors has required continuous absorption and application of technology.

The Internal View

The financial and operational challenges faced by the Company in recent years have placed pressure on organisational capabilities and employee morale. Maintaining the Companys engineering-oriented culture while operating with greater financial and organisational discipline is therefore important.

The Company continues to recognise design and engineering as important elements of its identity. Construction and project execution capabilities complement this technical orientation and together provide the basis for its EPC proposition.

Strengthening the organisation will require an appropriate balance between cost discipline, technical capability and the retention and development of critical skills.

Impact of War and Geopolitical Developments

The Companys domestic orientation provides some insulation from direct exposure to international conflicts. At the same time, technology collaborators, suppliers and other business relationships may have international linkages. Maintaining appropriate relationships with existing technology partners while developing additional sources of technology and expertise will remain relevant.

Impact of Artificial Intelligence

The Companys engineering culture provides a foundation for absorbing new technologies. AI represents another technological transition that can influence engineering, project management and O&M. The Companys approach will be to identify areas where AI can augment existing capabilities, improve productivity and support decisionmaking while retaining appropriate human oversight.

Impact of Sustainability

Sustainability is increasingly becoming an integral part of engineering and industrial decision-making. The Companys technical culture and experience in resource-intensive sectors provide a foundation for developing and delivering solutions that improve resource utilisation and operational efficiency.

The Company will continue to align its engineering capabilities with changing customer requirements while preserving the technical and project-management culture that has historically differentiated its business.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The Companys business activities continue to span key industrial and infrastructure segments including Steel, Power, Port, Infrastructure and Bulk Material Handling. These sectors remain relevant to the Companys established engineering and project execution capabilities and are influenced by the level of industrial investment, infrastructure development, public and private sector capital expenditure and the pace of project awards.

In the current operating environment, the Company is adopting a selective approach across these segments, with greater emphasis on technical suitability, commercial viability, execution capability, working-capital requirements and contractual risk. The objective is to utilise the Companys established engineering and project-management capabilities while maintaining financial and operational discipline.

Steel

Steel remains an important market for the Company, supported by its experience in engineering, project execution and material-handling applications for the sector. The Company has established references in the steel industry and its technical capabilities remain relevant to projects involving material handling, plant infrastructure and associated engineering requirements.

The sector continues to require investments in capacity, modernisation, material handling and supporting infrastructure. The Company will continue to evaluate opportunities in this segment where its technical experience and project-management capabilities provide an appropriate basis for participation.

Power

Power has historically been one of the Companys principal areas of operation. The Company has experience in power-related projects and associated material-handling and infrastructure systems.

The sector continues to evolve with changing generation requirements, renewable energy integration and associated infrastructure development. Conventional power infrastructure and related industrial systems also continue to require engineering and execution capabilities. The Company will evaluate opportunities selectively, taking into account project viability, contractual conditions and execution requirements.

Port

Port infrastructure and associated material-handling systems remain relevant to the Companys capabilities. Its experience in bulk material handling and industrial infrastructure provides a base for participating in selected port related opportunities.

The development of logistics and port infrastructure continues to create requirements for efficient handling and movement of bulk materials. The Company will assess opportunities in this segment in line with its technical capabilities and risk-management approach.

Infrastructure

Infrastructure remains an important area of domestic economic activity. The Companys EPC and project-management capabilities provide a basis for participation in selected infrastructure projects.

At the same time, infrastructure projects typically involve extended execution periods, significant working-capital requirements and complex contractual and stakeholder interfaces. The Company will therefore continue to adopt a disciplined approach towards project selection, with emphasis on projects where the commercial and execution risks can be appropriately managed.

Bulk Material Handling

Bulk Material Handling remains one of the Companys important areas of engineering competence. The Company has considerable experience in coal handling, mineral processing, ports and other applications involving movement, storage and processing of bulk materials.

The requirement for efficient bulk material handling continues across sectors such as steel, mining, power and ports. The Companys established references and technical knowledge provide a basis for participation in suitable projects. The focus remains on projects where the Company can effectively combine its engineering and project-management capabilities with disciplined execution.

TENDERS IN PIPELINE, ORDER BACKLOG AND OUTLOOK:

The Company continues to monitor and evaluate opportunities across its identified business segments. The tender pipeline comprises opportunities arising primarily from the Companys established sectors of operation, including steel, power, ports, infrastructure, mining, mineral processing and bulk material handling.

The Company remains selective in its bidding approach. Tenders are being evaluated not only on the basis of order size but also on technical suitability, contractual terms, customer profile, execution complexity, working-capital requirements and the overall risk-return profile. This approach is particularly relevant in the current environment, where competitive bidding and project execution risks remain significant.

The order backlog provides the base for continuing project execution and customer engagement. Managements focus remains on effective execution of existing commitments, timely completion of projects, close monitoring of costs and cash flows and maintaining appropriate relationships with customers, vendors and subcontractors.

The Company does not intend to pursue order growth at the cost of project quality or financial discipline. New opportunities will therefore be considered in a measured manner, with preference for projects that are aligned with the Companys established engineering and execution capabilities.

The immediate business outlook remains centred on strengthening the Companys operating base, improving execution efficiency and selectively rebuilding business activity across its core sectors. The Company will continue to leverage its established references, engineering knowledge and project-management capabilities while remaining mindful of the prevailing economic, competitive and financial environment.

OUTLOOK & BUSINESS STRATEGY:

The Companys business outlook needs to be viewed in the context of the continuing normalisation of its operations and the prevailing conditions in the domestic EPC and infrastructure sectors. While the economic environment provides opportunities across core sectors such as steel, power, mining, material handling and infrastructure, competition for projects remains high and execution and working-capital requirements continue to be important considerations.

1. MarketingThe Company will strengthen its marketing and business-development efforts across the public and private sectors. A significant proportion of the Companys business opportunities arise through competitive tendering and therefore the ability to identify suitable tenders, assess their commercial and technical attractiveness and participate selectively will remain important.The Company will focus on opportunities where its engineering capabilities, project references and execution experience provide an appropriate competitive position. Alongside the tendering process, the Company will continue to strengthen relationships with existing and prospective customers and maintain regular engagement with stakeholders across its core sectors.The emphasis will be on quality of order intake rather than order volume alone, with appropriate consideration given to contractual conditions, execution requirements, working-capital implications and project risks.

2. Talent

Engineering and project execution are people-intensive activities, and the Companys technical and project-management capabilities remain dependent on the availability of appropriately skilled personnel.

The Company will focus on strengthening its engineering, project-management and operational teams in line with the level of business activity. The approach will remain balanced, taking into account the Companys present financial and operating requirements.

Attention will be given to retaining critical technical capabilities, attracting suitable talent where required and developing existing personnel. The objective will be to maintain an organisation that is sufficiently capable to execute projects while remaining appropriately sized and cost conscious.

3. Technology

Technology remains an important element of the Companys competitive positioning. The Company will continue to leverage its engineering knowledge and established technology relationships in areas such as mineral beneficiation, material handling, mining, power and related industrial applications.

The Company will also continue to evaluate opportunities for collaboration with technology providers and partners where such relationships can strengthen its technical offering or provide access to relevant solutions.

Digitalisation and Artificial Intelligence are increasingly influencing engineering, project management and operations. The Company will examine practical applications in areas such as project monitoring, risk assessment, cost control, maintenance and management information systems, with emphasis on applications that provide measurable operational benefits.

The objective will be to strengthen the Companys technology proposition without compromising commercial and financial discipline.

4. Efficiency

Operational and financial efficiency will remain a central priority. Given the Companys recent business challenges, disciplined management of costs, working capital and project execution will be critical.

The Company will focus on efficient utilisation of manpower and other resources, tighter monitoring of project costs, timely identification of execution issues and effective management of cash flows. Existing procedures and projectmanagement systems will continue to be used to improve visibility and control.

The Company will also seek to maintain an efficient vendor and subcontractor ecosystem while ensuring that project execution requirements are adequately supported.

The focus will be on achieving an appropriate balance between cost efficiency, technical capability and execution quality.

OVERALL STRATEGIC APPROACH:

The Companys strategy in the present phase is therefore one of disciplined rebuilding and consolidation. The Company will seek to utilise its established engineering capabilities, sectoral references and project-management experience while carefully evaluating the commercial and financial implications of new business.

Management recognises that sustainable improvement will depend not only on securing new orders but also on executing projects effectively, managing cash flows, retaining critical capabilities and maintaining customer confidence.

Accordingly, the Company will continue to pursue opportunities across its core sectors while remaining cautious about excessive risk-taking. The immediate objective is to strengthen the Companys operating foundation and create the conditions for sustainable business activity based on its established capabilities.

EMERGING SECTORS IN EPC

The EPC industry in India is undergoing a gradual broadening of its opportunity landscape. Alongside the Companys traditional sectors of steel, power, mining, ports, infrastructure and bulk material handling, new requirements are emerging from energy transition, digital infrastructure, resource efficiency and industrial decarbonisation.

These emerging areas are relevant to the Company primarily because several of them require capabilities that overlap with its existing strengths in engineering, project management, material handling, utilities and industrial infrastructure. However, these sectors also involve new technologies, different contracting structures and specialised execution requirements. The Companys approach will therefore be to evaluate such opportunities selectively and build capabilities or partnerships where required.

Data Centres and Digital Infrastructure

The growth of cloud computing, artificial intelligence and digital services is increasing the requirement for datacentre infrastructure in India. Data centres are highly infrastructure-intensive facilities requiring reliable power, electrical systems, cooling, civil works, utilities and associated infrastructure.

The increasing energy requirement of data centres also creates linkages with renewable power, energy storage and transmission infrastructure. Recent industry assessments indicate that data-centre development is becoming an increasingly important component of Indias infrastructure investment landscape.

For an EPC company, the opportunity is therefore not restricted to construction of the data-centre facility itself. Associated power, utility, cooling, material movement and supporting infrastructure can also form part of the broader project ecosystem. The Company will monitor this sector where its existing engineering and project-management capabilities can be appropriately applied.

Battery Energy Storage Systems

The increasing share of renewable energy in the power system is creating a corresponding requirement for energy storage. Battery Energy Storage Systems (BESS) are emerging as an important component for balancing renewable generation, improving grid flexibility and supporting reliable power supply.

Indias storage market is moving from an early-stage development phase towards larger-scale project deployment, with increasing tender and auction activity. Industry tracking during 2026 has identified significant activity across standalone BESS, renewable-plus-storage and firm and dispatchable renewable-energy projects.

BESS projects require integration of electrical systems, civil infrastructure, control systems, thermal management and project execution. These requirements provide potential areas of relevance for EPC companies with appropriate engineering and project-management capabilities.

The Company will continue to monitor this segment and assess opportunities where its capabilities can be effectively combined with suitable technology partners.

Renewable Energy and Hybrid Energy Projects

Indias energy transition is creating demand for EPC solutions beyond conventional power generation. Solar, hybrid renewable energy, renewable-plus-storage and firm and dispatchable renewable-energy projects increasingly require integrated engineering rather than execution of a single technology.

The changing nature of renewable-energy projects is also increasing the importance of grid integration, storage, transmission and balance-of-system infrastructure.

The Companys earlier experience in solar project execution, together with its project-management and infrastructure capabilities, provides a relevant base for evaluating selected opportunities in this broader ecosystem. The Company will remain selective and will consider technology, financing, contractual and execution risks before entering such projects.

Green Hydrogen and Green Industrial Infrastructure

Green hydrogen and related downstream applications represent an emerging area of industrial infrastructure. The EPC requirements associated with this sector can extend beyond hydrogen production to include electrolyser systems, utilities, storage, handling, processing and associated infrastructure.

The sector is still developing its commercial and execution ecosystem in India, and projects require specialised technology, reliable offtake arrangements and appropriate financing structures. Accordingly, the Company views this as an emerging opportunity rather than an established business segment.

The Companys experience in industrial project management, material handling and core-sector engineering could provide relevant capabilities in selected applications, subject to appropriate technology partnerships and commercial viability.

Green Steel and Industrial Decarbonisation

The steel industry is undergoing increasing attention towards resource efficiency, lower-carbon production and improved energy utilisation. This transition is expected to create requirements for modifications to existing industrial facilities as well as new infrastructure associated with cleaner production processes.

For an engineering company with established steel-sector references, this represents an area where existing sector knowledge can potentially be combined with emerging technologies. Opportunities may arise in material handling, beneficiation, utilities, process support systems, energy-efficiency projects and associated infrastructure.

The Company will monitor developments in this area and assess opportunities that are compatible with its engineering capabilities and risk appetite.

Railway Electrification and Associated Infrastructure

Railway electrification and related infrastructure represent another area adjacent to the Companys established project-management and infrastructure capabilities. The sector requires coordinated execution involving civil, electrical, utilities, material handling and project-management activities.

The Companys approach will be to evaluate opportunities where its EPC experience and execution capabilities can be effectively utilised, either independently or in collaboration with specialised partners.

Water, Resource Efficiency and Mineral Beneficiation

Water management, mineral beneficiation and resource efficiency remain closely aligned with the Companys established engineering capabilities. Increasing emphasis on efficient utilisation of natural resources and recovery of value from minerals is creating continuing requirements for engineering solutions in these areas.

The Companys existing knowledge in mineral processing and water-related applications provides a stronger technological connection to these opportunities than some of the newer EPC segments. The focus will therefore remain on strengthening and selectively leveraging these established capabilities.

STRATEGIC APPROACH TO EMERGING SECTORS:

The Company views emerging EPC sectors as an extension of its existing engineering capabilities rather than as a reason to move away from its core business.

The common thread across many of these opportunities is the increasing requirement for integrated engineering, project management, technology integration and execution capability. This is broadly consistent with the Companys engineering-led heritage.

At the same time, emerging sectors carry technology, commercial, financing and execution risks. The Company will therefore adopt a measured approach, evaluating opportunities on the basis of its technical capability, availability of appropriate technology partners, contractual structure, funding requirements and execution risks.

The immediate objective is to identify areas where the Companys existing capabilities can be extended without placing undue pressure on financial and organisational resources. Where required, the Company may consider collaborations and technology partnerships to access specialised capabilities.

Accordingly, emerging sectors will remain an area of selective evaluation and capability development, while the Companys primary focus continues to be on strengthening its established business in engineering, project management, material handling, power, steel, mining, infrastructure and operations and maintenance.

RISKS & CONCERNS AND RISK MANAGEMENT

Over the next few years, the supplier risk management shall be made robust and the lost credit line, tried to be regained.

The risk management system architecture covers from initiation of tender, bid decision and transfer of the risks envisaged to the project execution team. For the other operational and fraud risk control the Internal Audit team has already commenced the process last year and its integration with the Enterprise Risk Management (ERM) is underway.

As an improvement of the risk management system, supply chain risk has been developed in further detail. This coupled with the Oracle Cloud Infrastructure (OCI) Analytics Solutions to capture macro risks like commodity price variations, WPI Indices which impact our projects can be a great asset and intellectual property for the Company. This digital transformation to the Cloud opens opportunities to create value with data enabled solutions and also increasing operational efficiencies by monitoring the Key Performance Indices (KPIs) of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a detailed well spelt internal control system in place to ensure that all financial, commercial and legal transactions are fully authorized, recorded and correctly reported. The Audit Committee of the Board of Directors, chaired by an experienced Independent Director, reviews the adequacy of the Internal Control System.

The Companys Internal Audit Department is in charge for periodically carrying out detailed audit of the transactions of the Company at various project sites, manufacturing locations and offices to ensure that recording and reporting are adequate and as per the policy of the Company. The Internal Auditors periodically physically verify the Companys assets and ensure that there is no unauthorized usage. The assets are kept in proper conditions and are covered under adequate insurance.

Business strategy of the organization has guided the formation of the Enterprise Risk Management (ERM) for the Company. The process started two years back and is under implementation. Considering the flexibility and execution requirements for a projects driven company the system is being continuously revaluated to establish a robust system.

The focus will now work as a partner to major expansions in the core sector for clients and hence the EPC outlook to minimize cost will be replaced by an outlook to add value with time saving and environment friendly solutions.

The risks are broadly categorized into Strategic, Operational, Financial (Compliance & Reporting) & Hazardous Risks. The components of Enterprise Risk Management include:

a) Entity level controlsb) Process Risks & Controls- Internal controls over financial reporting- Operational controls- Fraud risk controlsc) IT General Controls

Entity level & IT General controls are being followed as per standard practice of EPC business.

For the rest of the components, the Implementation of ERM is divided into phases as below:

Phase I: Implementation of Internal controls over financial reporting

Phase II: Implementation of operational & fraud risk controls

The Companies Act, 2013 mandated Indian Companies to implement internal controls over financial reporting effective from 1st April 2018. Management has documented all key finance and business processes impacting financial reporting, tested the key controls for adequacy and operating effectiveness during the financial year 2025-26.

Since majority of the business is in Projects, a project risk management framework has been implemented in the ERP and being monitored periodically for all new projects on the ERP. The risk framework captures Strategic, Operational, Financial and Hazardous risks. This is supported by an issue management interface.

FINANCIAL AND OPERATING PERFORMANCE

The highlights of financial performance of the Company during the financial year 2025-26 have been provided in the Boards Report under section 134 of the Companies Act, 2013.

Major O&M Projects under execution by the Company include:

Name of Customer	State	Details of the project	Tenure of the Contract
Jindal Stainless Ltd.	Duburi, Jazpur, Odisha	Ash Handing Plant	31.12.2028
Adani Infrastructure Management Services, Kawai	Kawai, Rajasthan	Coal Handling Plant	31.12.2026
Kurmitar Iron Ore Mining Pvt. Ltd.	Kurmitar, Odisha	Iron Ore Handling	Extended till 31.08.2026
Kurmitar Iron Ore Mining Pvt. Ltd. DA – 1 and DA - 2	Kurmitar, Odisha	Iron Ore Handling	01.04.2026 – 31.03.2036
Kurmitar Iron Ore Mining Pvt. Ltd.	Kurmitar, Odisha	33 KV Transmission line (29 KM).	21.07.2026 – 20.10.2026
Adani Infrastructure Management Services, Kawai	Raipur, CGO & M of CHP,		01.04.2025 – 31.03.2028

Very recently, the organisation has been successful in securing two major 3-year O&M contracts:

Adani Raipur CHP - Site will be mobilised from 01.04.2025 Adani Kurmitar - Site is expected to be mobilised from 01.10.2025

The Company has been booking sustained profits in this business domain with appreciable list of satisfied customers including the Adani Group, where the presence is formidable. Efforts are already under way for scaling up the business volume by 50% within the next financial year. However, major constraint remains in the area of Commercial Qualification for PSU tenders and the ban on MBE from Mahanadi Coalfield Ltd. Hopefully, issue pertaining to Net Worth, Insolvency and Working Capital would be resolved at the earliest with the successful implementation of the Resolution Plan.

Following is a brief report on the Coal India First Mile Connectivity projects that the cCompany is executing through Joint Ventures:

A.Projects of Manahandi Coalfields Limited (MCL):

CHP of Sardega was awarded by MCL on MBE-Trolex-Kilburn JV. PG test of the plant was completed in Dec25 and O&M part of the contract started since 1.1.2026. Negative cash flow for the portion of O&M is matter of concern. CHP of Ananta OCP was awarded by MCL on MBE-AML JV. The organization had to face challenges related to unfavorable soil conditions due to varying nature of overburden. All erection jobs are under progress now and the project is targeted for completion by December 2026.

B.Projects of South Eastern Coalfields Limited (SECL):

CHP of Dipka OCP was awarded by SECL on MBE-AML JV. The PG test of the plant completed in Dec25 and O&M part of the contract started since 1.1.2026. Negative cash flow for the portion of O&M is matter of concern. CHP of Chhal OCP was awarded by SECL on MBE-Trolex JV. The PG has been successfully conducted on 29.05.2024 and the plant is under our Operation & Maintenance since 26.06.2024. Negative cash flow for the portion of O&M is matter of concern. CHP of Baroud OCP was awarded by SECL on MBE-Trolex JV. The PG has been successfully conducted on 27.07.2024 and the plant is under our Operation & Maintenance since 01.08.2024. Negative cash flow for the portion of O&M is matter of concern.

The Company has faced significant challenges with incomplete power projects, especially under the threat of Bank Guarantee (BG) encashments and rising loan burdens. Despite this, the Company resumed work on key projects with support from clients like NTPC, GSEC, DVC, and BHEL, under the guidance of the Resolution Professional and the Successful Resolution Applicant. A brief of these projects are as follows:

(i)OCPL, Manoharpur Coal Handling Plant:

The CHP project at Manoharpur, Sundargarh (OCPL) was completed in December 2023, with all PG and reliability tests successfully done. The O&M contract concluded in December 2024. Minor defects were addressed and commercial settlement for unattended work completed. A waiver request for Liquidated Damages accepted by OCPLs and contract closure also completed in June26 followed by release of Rs.51.7Cr milestone payments in July25.

(ii) NMDC Stacker Reclaimer & Barrel Reclaimer project a/c BHEL:

The NMDC project via BHEL at Nagarar (8 Stackers & 2 Barrel Reclaimers) has been completed up to PG test. Part defect rectification have been completed and balance is not feasible to complete due to non-response of OEM (M/s Elecon). Therefore, we have requested BHEL for contract closure with commercial settlement which is under consideration. Once contract closure is completed, BG of Rs. 4.00 Cr. Would be released.

(iii) GSECL LMCS and AHP package, Bhavnagar:

At GSEC Bhavnagar, Ball Mill #1B has been successfully commissioned since Dec 2017. Following renewed discussions in January 2024, the project resumed, with Ball Mill #2A commissioned in Sept 2025 (PLC

commissioning underway). Silo #4 completed in May26. Remaining two Ball Mills and Silos #5-6 are targeted for completion by 31.12.2026. Timely completion is critical to safeguard BGs worth Rs.39.82 Cr and uphold the Companys reputation in the market.

(iv) DVC, Bokaro Combined Ash Slurry Disposal System project:

The DVC Bokaro project has been suspended since 2018 due to financial constraints and local disruptions. The Company re-mobilize the site in May25 for completing key civil, mechanical, and EIC works. The completion time has been estimated up to March27. Challenges include financial support, local contractors and security issues, especially with the Clariflocculator located outside plant premises. Completion is vital to protect the Companys reputation and safeguard BGs worth Rs.10.33 Cr.

DETAILS OF SIGNIFICANT CHANGES (i.e. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS

Key Financial Ratios	2025-26	2024-25	Change (%)	Reasons*
Debt Equity Ratio (Number of times)	0.19	(1.13)	(116.89)	*Due to the implementation of the approved Resolution Plan and reassessment of the assets of the Company, the corresponding YoY ratios are not comparable.
Interest Coverage Ratio (Number of times)	16.56	(1.02)	(1623.21)
Current Ratio (Number of times)	1.19	0.09	1227.00
Debtors Turnover (Number of times)	0.29	0.19	50.09
Inventory Turnover (Number of times)	656.93	352.68	86.27
Operating Profit Margin (%)	2.08	(1.16)	(179.09)
Net Profit Margin (%)	46.95	(16.35)	(387.15)
Return on Net Worth (%)	NA	NA	-

DISCLOSURE OF ACCOUNTING TREATMENT

The Boards Report and the financial statements contain necessary disclosure of accounting treatment, if any, different from that prescribed in Accounting Standards and managements explanation regarding adoption of such treatment.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS INCLUDING THE NUMBER OF PEOPLE EMPLOYED

The Company firmly believes that its greatest strength lies in its Human Resources. The organization has been increasingly emphasizing on development of knowledge and skills of its employees to align with the changing business scenario. The organization offers a congenial work environment cutting across hierarchy and diverse work groups to foster a healthy work culture.

In terms of employee care, the organization provides benefits and allowances which are in keeping with market trends. The Company also provides comprehensive insurance coverage for employees to take care of medical exigencies and unforeseen situations. The Company is continuing with its organizational transformation initiatives with a key focus on restructuring to become a more agile and robust organization. Employee relations remained cordial throughout 2025-26.

As on 31st March 2026, the total number of employees of the Company was 323.

Industrial relations during the year remained cordial.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report in regard to projections, estimates and expectations have been made in good faith. Many unforeseen factors may come into play and affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. Industry information contained in this Report, have been based on information gathered from various published and unpublished reports and their accuracy, reliability and completeness cannot be assured.

Partha Sarathi Bhattacharyya

(DIN 00329479) (DIN 00329479)

Chairman