McNally Bharat Engineering Company Ltd Directors Report

The financial year 2024-25 has been very challenging for the Company. Industrial slowdown accompanied by Banking restrictions on liquidity management adversely impacted the business and profitability of the Company. However, the Company under the guidance of the newly constituted Board of Directors is committed to its vision to create long-term stakeholder value.

The Board of Directors present the 62nd Annual Report of the Company together with the Audited Standalone and Consolidated Financial Statements ("the Financial Statements") and the Auditors Report thereon for the financial year ended on 31st March 2025.

Update on Corporate Insolvency Resolution Process (CIRP)

This is to apprise the members that vide Order dated 29th April 2022 passed by the Honble National Company Law Tribunal, Kolkata Bench (the "NCLT"), the Company was admitted to Corporate Insolvency Resolution Process ("CIRP") under the provisions of Section 7 of the Insolvency and Bankruptcy Code 2016 (the "Insolvency Code") with Mr. Anuj Jain (Registration No. IBBI/IPA-001/IP- P00142/2017-18/10306) as the Interim Resolution Professional. Subsequently, vide NCLT Order dated 26th August 2022, Mr. Ravi Sethia (Registration No. IBBI/IPA- 001/IP-P01305/2018-2019/12052) was appointed as the Resolution Professional.

During the Financial Year 2023-24, out of four prospective corporate resolution applicants which had submitted their resolution plans to the Resolution Professional, BTL EPC Limited, the engineering division of Kolkata-based Shrachi Group emerged as the highest bidder for McNally Bharat Engineering Company Limited. The Committee of Creditors ("CoC") at its meeting held on 27th July 2023 approved the Resolution Plan of BTL EPC Limited by 90.06% voting share on the criteria of higher Net Present Value (the "Resolution Plan"). Subsequently, the Honble NCLT Kolkata, vide Order dated 19th December 2023 also approved the Resolution Plan of BTL EPC Limited (the "Successful Resolution Applicant"/ "SRA").

In terms of the NCLT Order dated 19 December 2023, a 5-member Monitoring Committee ("MC") was formed with Mr. Ravi Sethia, the erstwhile Resolution Professional as its Chairman and two representatives each from the CoC and SRA. The management and operations of the Company were being conducted under the supervision and control of the Monitoring Committee until 6th January 2025.

On 6th January 2025, the "Effective Date" as per NCLT Order dated 3rd December 2024, the Monitoring Committee formed the Companys Board of Directors with nominees of BTL EPC Limited (the "SRA"/ "incoming promoters") and handed over the operational control of the organization to the Board. The Company has since been operating under the superintendence and control of its Board of Directors, with the Monitoring Committee overseeing the implementation of the Resolution Plan. The SRA has sought further time from the Honble NCLT for fulfilling its financial obligations under the Resolution Plan.

FINANCIAL HIGHLIGHTS

The Financial Statements for the financial year ended 31st March 2025 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: Particulars	Rs in Lakhs
	31st March 2025	31st March 2024
(A) Profitability
1. Gross Total Revenue	10583.17	21500.64
2. Total Expenses (except depreciation, amortization and finance costs)	96811.09	26128.83
3. Finance Costs	84850.37	83377.18
4. Depreciation & Amortizations	296.61	320.91
5. Total Expenses (2+3+4)	181958.068	109826.92
6. Profit/(Loss) before Exceptional/ Extraordinary items	(171374.90)	(88326.28)
7. Exceptional/Extraordinary items	(233.67)	0.00
8. Profit/(Loss) before Tax	(171608.57)	(88326.28)
9. Profit/(Loss) after Tax	(171608.57)	(88326.28)
10. Other Comprehensive Income	39.87	77.41
11. Total Comprehensive Income	(171568.70)	(88248.87)
(B) Assets & Liabilities
1. Non-Current Assets	53378.69	53832.71
2. Current Assets	63474.12	145865.25
3. Total Assets (1+2)	116852.81	199697.96
4. Equity Share Capital	3333.33	21157.08
5. Other Equity	(592560.71)	(441961.27)
6. Non-Current Liabilities	338.93	199.18
7. Current Liabilities	705741.25	620302.97
8. Total Equity & Liabilities (4+5+6+7)	116852.81	199697.96

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 the Annual Accounts, 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 on 31st March 2025 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.

COMPANYS 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 2024-25 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

There is no recommendation of dividend for Equity Shareholders during the financial year 2024-25. Further, in view of capital restructuring pursuant to implementation of the Resolution Plan, the paid-up Preference Share Capital of the Company stands obliterated with effect from 22nd February 2025.

PREFERENTIAL ALLOTMENT OF REDEEMABLE PREFERENCE SHARES

During the year, no Non-cumulative Redeemable Preference Shares had been allotted on preferential basis.

DEPOSITS

During the year under review, the Company had not accepted any deposit or renewed any deposit within the meaning of Section 73 of the Companies Act, 2013 and the rules made thereunder.

LOAN TO DIRECTORS

During the financial year 2024-25, the Company had not advanced any loan or given any guarantee nor provided any security in connection with any loan made to any of its Director/s or to any other person in whom the Director is interested as mentioned in section 185 of the Companies Act, 2013 read with Rule 10 of the Companies (Meetings of the Board and its Powers) Rules, 2014.

LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees, securities and investments made by the Company during the Financial Year 2024-25, along with the purpose for which such loan or guarantee or security is utilized or proposed to be utilized, as applicable, are provided in Note nos. 12 and 5 of the accompanying Standalone Financial Statements.

CONTINGENT LIABILITIES AND MAJOR LITIGATIONS

Details of contingent liabilities and major litigations covered under the applicable provisions of the Companies Act, 2013 are given in the Notes to the Financial Statements.

MEETINGS OF THE BOARD OF DIRECTORS

Since the reconstitution of the Companys Board of Directors on 6th January 2025, only 4 (four) Board Meetings were held during the financial year 2024-25 ie. on 14th January 2025, 11th February 2025, 22nd February 2025 and 26th March 2025.

Prior to 6th January 2025, the Chairman of the Monitoring Committee and the (suspended) Board of Directors held only 3 meetings during the financial year ie. on 5th June 2024, 13th August 2024 and 13th November 2024 for inter alia approving the annual/quarterly financial results of the Company.

Directors Report [contd.)

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Appointments

During the financial year under review, the Monitoring Committee in terms of the Resolution Plan and the Honble NCLT Order dated 3rd December 2024, reconstituted the Companys Board of Directors by appointing 3 (three) Independent Directors on the Board as nominated by BTL EPC Limited (the SRA/incoming Promoter), namely, Mr. Partha Sarathi Bhattacharyya (DIN 00329479), Mr. Pradip Kumar Bishnoi (DIN 00732640) and Mr. Anil Kumar Jha (DIN 03590871) effective 6th January 2025. Later, in compliance with Section with 149(1) of the Companies Act, 2013 read with Regulation 17(1) of SEBI Listing Regulations 2015 for appointment of a woman director by listed companies, Ms. Anuradha Gupta (DIN: 06658142) was also appointed with effect from 14th February 2025. The said appointment of Directors is subject to shareholders approval at the upcoming Annual General Meeting of the Company.

Resignations

The reconstitution of the Companys Board on 6th January 2025 also marked the vacation of office of the erstwhile Directors of the Company, namely, Mr. Aditya Khaitan (DIN 00023788), Mr. Asim Kumar Barman (DIN 02373956), Mr. Nilotpal Roy (DIN 00087298), Ms. Arundhuti Dhar (DIN 03197285) and Ms. Kasturi Roy Chowdhury (DIN 06594917), in terms of the Resolution Plan read with Honble NCLT Order dated 3rd December 2024.

The resignation of erstwhile Directors, namely, Ms. Arundhuti Dhar (DIN 03197285) with effect from 3rd August 2022 and both Mr. Nilotpal Roy (DIN 03197285) and Ms. Kasturi Roy Chowdhury (DIN 06594917) with effect from 10th August 2023, during the prevailing CIRP, were placed before the Committee of Creditors through the Resolution Professional, due to suspension of the Board of Directors.

Directors retiring by Rotation

None of the current Directors of the Board are liable to retire by rotation under Section 152 of the Companies Act, 2013, at the 62nd Annual General Meeting of the Company. However, their appointment as Additional Directors on the Board during the financial year 2024-25 is subject to shareholders approval at the said Meeting.

In terms of Regulation 17(1A) of the SEBI Listing Regulations, the Board recommends the continuation of appointment of Mr. Partha Sarathi Bhattacharyya (DIN 00329479), Mr. Pradip Kumar Bishnoi (DIN 00732640) and Ms. Anuradha Gupta (DIN 0668142) on the Companys Board upon attaining the age of 75 years on 27th February 2026, 3rd July 2026 and 18th March 2027, respectively.

Declaration by Independent Directors

As on 31st March 2025, there were 4 (four) Independent Directors on the Companys Board. The Directors, as required under sub-section (7) of Section 149 of the Act read with Regulation 25(8) of the Listing Regulations, have confirmed that they meet the criteria of independence required under sub-section (6) of Section 149 of the Act and clause (b) of subregulation (1) of Regulation 16 of the SEBI 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 of Regulation 25 of the Listing Regulations, was of the opinion that the Independent Directors meet the criteria of independence.

Directors Shareholding

There is no shareholding of any Director in the Company.

KEY MANAGERIAL PERSONNEL (KMP)

The following were the Key Managerial Personnel of the Company during the financial year under review:

- Mr. Rajendra Mohan Mathur, Chief Executive Officer (appointed w.e.f. 21.12.2024)

- Mr. Pradyuman Baidya, Chief Financial Officer (retired from services on 10.12.2024)

- Ms. Indrani Ray, Company Secretary & Compliance Officer.

Directors Report [contd.)

The Monitoring Committee appointed Mr. Rajendra Mohan Mathur as the Chief Executive Officer (CEO) of the Company with effect from 21st December 2024. Mr. Mathur continues to be the CEO and is not a member of the Board of Directors.

Mr. Rupayan Majumdar, (ICAI Membership No. ACA 054115) Chartered Accountant was appointed as the Chief Financial Officer with effect from 5th May 2025 during the current financial year.

The Board has received written confirmation from its senior management personnel that during the financial year 202425 they had no personal interest in any material, financial and commercial transactions of the Company.

Directors and KMP Remuneration

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

The Independent Directors are only entitled to receive Sitting Fees for attending Board and Committee meetings and no remuneration except an amount of Rs 12,90,000 towards sitting fees was paid in respect of the financial year 2024-25.

(a) The ratio of the remuneration of each Director to the median remuneration of all the employees of the Company for the financial year:

Name of Director	Designation	Remuneration Rs in Lakhs	Ratio to median remuneration
Mr. Rajendra Mohan Mathur*	Chief Executive Officer	33.38	8.36
Mr. Pradyuman Baidya**	Chief Financial Officer	25.27	6.33
Ms. Indrani Ray	Company Secretary & Compliance Officer	38.31	9.60

(b) the percentage increase in remuneration of any Director and KMP during the financial year is given below:

Sl. No.	Name of Director	Total Remuneration 2024-25 Rs in Lakhs	Total Remuneration 2023-24 Rs in Lakhs	Percentage Increase/ (Decrease)
1	Chief Executive Officer (Note 1)	33.38	-	100.00%
2	Chief Executive Officer (Note 2)	-	127.72	(100.00)%
3	Chief Financial Officer (Note 3)	25.27	36.30	(30.39)%
4	Company Secretary & Compliance Officer	38.31	38.21	0.26%

Note 1: Mr. Rajendra Mohna Mathur was appointed as CEO w.e.f. 21st December 2024. Note 2: Mr. Srinivash Singh, CEO, retired from the services on 30th October 2023.

Note 3: Mr. Pradyuman Baidya, CFO, retired from services on 10th December 2024.

(c) the percentage increase in the median remuneration of the employees in the financial year 2024-25 was 4.15%;

(d) the total number of employees on the rolls of the Company as at the end of the financial year was 333.

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

BOARD COMMITTEES

During the financial year under review, the Board of Directors upon being reconstituted by the Monitoring Committee on 6th January 2025, held its first meeting on 14th January 2025 and formed the following statutory committees with immediate effect:

- Audit Committee

- Stakeholders Relationship Committee

- Nomination and Remuneration Committee

- Risk Management Committee

The Board defined a 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.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Corporate Social Responsibility Committee of the Board was dissolved on 12th November 2022 and was not reconstituted thereafter. However, Corporate Social Responsibility Policy (the "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 continues to be available on the Companys website at the following link: https://www.mcnallybharat.com/assets/pdf/investor/policy/MBECL- CSR%20Policy-%20 Revised%202022.pdf .

The Company was not required to spend any amount on CSR activities during the financial year 2024-25 due to continuous losses incurred during the 3 (three) immediately preceding financial years.

COMPANY POLICY ON DIRECTORS APPOINTMENT & REMUERATION AND SENIOR MANAGEMENT PERSONNEL APPOINTMENT & 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 link https://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-term and long-term 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 ofseveral energy saving equipments progressively throughout the year.

During the financial year 2024-25, the lateral shifting of the Corporate office layout has resulted in the following savings in power consumption:

Financial Year	Power consumption units
2023-24	7,99,868
2024-25	6,08,579
Savings	1,91,289

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 plants and machinery by conducting regular self-audit and up gradation of equipments 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 2024-25 and the previous financial year 2023-24 there has been no financial exchange earnings and outgo.

AUDITOR AND AUDITORS REPORT

At the 58th Annual 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 58th Annual General Meeting till the conclusion of the 63rd Annual General Meeting.

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

. Adverse Opinion	Board Clarification
1. a) Current Assets and Current Liabilities i. We draw attention to Note 43 to the Standalone Financial Statements regarding Trade Receivables, Advance to Supplier, Trade Payable, other financial Assets and Advance from customers are subject to confirmation and reconciliation from respective parties and consequential reconciliation, outcomes of pending arbitration/settlement of claims and adjustments arising therefrom, if any. The management, however, does not expect any material variation. Management is also hopeful for recovery/realisation of trade receivables which include Rs. 41,093.12 Lakhs under Arbitration/ Proposed Arbitration in the normal course of business, hence no impairment has been considered at this stage. ii We draw attention to Note 6(d) to the Standalone Financial Statements, Claims Recoverable (BG Encashed) amounting to Rs. 36,183.70 Lakhs, out of which specific provision is made of Rs. 32,377.38 Lakhs, including Rs. 3,806.32 Lakhs under arbitration whose fair value is Rs. 2,828.72 Lakhs are doubtful. Recoverability / Adjustments / Impacts with respect to these are currently not ascertainable and as such cannot be commented upon by us.	At the end of the financial year, the management had reviewed the accounts of all its trade receivables, suppliers\u2019 accounts and other financial assets on a comprehensive basis. As an outcome of this detailed review it was found necessary to make the following provisions in the financial statements for the year under review. Provision for Bad & Doubtful Debts 45,972.37 Lacs Bad Debts Written off 2,481.67 Lacs Provision for Advance to Supplier 24,995.04 Lacs. Further, it is to be noted that the reconciliation process is currently ongoing as most of these balances are very old and further action shall be taken appropriately. As regards Arbitration-related matters, evaluation of all such pending cases is done by the management regularly and outcome of such proceedings shall be accounted for accordingly. Hence, no material impact is expected at this stage. A provision of 32,377.38 Lacs (Gross) had been made towards Claims Recoverable (BG Encashed) during the year under review. The balance sum of 3,806.32 Lacs (which has a fair value 2,828.72 Lacs) being under arbitration is being reviewed on a continuous basis by the management and outcome of such proceeding shall be accounted for accordingly. Hence, no material impact is expected at this stage.
2. b) Non-adjustment of the Carrying Value of Loan In earlier years, the Company had given unsecured loan to Vedica Sanjeevani Projects Private Limited (\u201cVSPL\u201d). 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 realizability 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 \u201cFinancial Instruments\u201d.	In the absence of any further communication with Vedica Sanjeevani Projects Private Limited (\u201cVSPL\u201d), the Company is unable to estimate the impact.
3. c) Recognition of Deferred Tax Assets Note 7 to the Standalone Financial Statements mentions that the Company had recognized deferred tax assets of Rs. 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. We are unable to obtain sufficient appropriate audit evidence with respect to the management\u2019s assertions and are therefore, unable to comment on the carrying value of the aforesaid net deferred tax assets on 31st March, 2025. This constitutes a material departure from the requirements of Indian Accounting Standard 12 \u201cIncome Taxes\u201d.	The Company believes that this issue would be resolved on completion of the Resolution Plan as then the Company would have to recast its financial statements in line with the Plan and, thus, the tax incidence arising out of the surplus (if any) shall get adjusted with the Deferred Tax Assets. Further, the Company believes that based on the infusion of fresh funds coming to the Company there will be adequate future taxable profit available to the Company against which the deferred tax assets can be utilized.

SECRETARIAL AUDITOR

In accordance with the provisions of Section 204 of the Act, Mr. Prakash Shaw (ICSI Membership No. A 32895 and C.P. No. 16239), Practicing Company Secretary, was appointed as the Secretarial Auditor of the Company for the financial year ended on 31st March 2025.

The Secretarial Audit Report for the financial year 2024-25 submitted by the Secretarial Auditor 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 31st March 2025 is also annexed and forms part of the Annual Report.

SECRETARIAL STANDARDS

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

COST RECORDS AND 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) was appointed the Cost Auditor of the Company to audit the cost records for the financial year 2024-25 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 of the Company which could 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 link: 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://mcnallybharat.com/wp-content/ uploads/2025/09/Annual-Return-2024-25.pdf

VIGIL MECHANISM AND 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 OF WOMEN AT WORKPLACE

The Company has a policy for prevention of sexual harassment at the workplace, which can be accessed on the Companys website at www.mcnallybharat.com at the following link:

https://www.mcnallybharat.com/assets/pdf/investor/policy/MBECL%20Policy%20for%20Prevention%20of%20

Sexual%20Harassment%20(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). In view of the Companies (Accounts) Second Amendment Rules 2025, which mandate that companies include detailed disclosures on their compliance with the POSH Act in the Boards Report as required under Section 134 of the Companies Act 2013 and Rule 8 of the Companies (Accounts) Rules 2014, the Company is moving towards a substantive, transparent reporting of POSH compliance aimed at fostering genuine accountability in preventing and addressing workplace harassment.

During the financial year 2024-25, the ICC did not receive any complaints: Number of sexual harassment complaints received	Nil
Number of sexual harassment complaints disposed off	Nil
Number of sexual harassment complaints pending beyond 90 days	Nil

Gender composition of the Company as on 31st March 2025 was as follows:

Gender	Number of employees
Male	328
Female	05
Transgender	00
Total	333

During the financial year ended 31st March 2025, the Company has filed necessary returns as required to be filed under the POSH Act and has been compliant with the provisions of the Employees State Insurance Act, 1948 including Rules thereto. Hence, compliance with Maternity Benefit Act, 1961 including Rules thereto, stands obviated.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on 31st March 2025, the Company had only one Indian subsidiary company namely, McNally Bharat Equipments Limited.

The 2 (two) foreign subsidiaries, namely, MBE Minerals Zambia Limited, Zambia and MBE Mineral Technologies Pte Limited, Singapore were defunct companies having no business operation or commercial activity since 2016-17 and 2018-19 respectively and hence, the value of investment in these entities had been impaired in the books of accounts of the Company, the Indian parent entity.

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

- McNally AML (JV)

- McNally Trolex (JV)

- McNally Trolex Kilburn (JV)

During the year under review, the Board of Directors reviewed applicability of "material subsidiaries" in accordance with Regulation 16 read with Regulation 24 of the Listing Regulations, and none of the above qualified the materiality criteria.

CONSOLIDATION OF ACCOUNTS

In accordance with Section 129(3) of the Act, the Company in respect of the financial year ended 31st March 2025 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 herein-below:

Figure in Rs Lakhs Sl. No.	Subsidiary Companies	Business Activities	Turnover	Profit/(Loss)
1	McNally BharatEquipments Limited	Project management consultant for revamping the existing fluorspar beneficiation plant of Gujarat Mineral Development Corporation Limited at Kadipani.	0.00	(1.94)
2	MBE Mineral Technologies PteLimited	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 website of the Company www.mcnallybharat.com in a downloadable format.

INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT

During the year under review, adequate Internal Control policies relating to the normal operations of the Company were adopted and performed and those commensurate with the size, nature and complexity of the activities of the Company, were also implemented.

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

BOARD EVALUATION

As the Companys Board of Directors was reconstituted by the Monitoring Committee on the "Effective Date" ie. 6th January 2025, the Board Evaluation for the limited period of the financial year viz. from 6th January 2025 till 31st March 2025, was conducted as per recommendations of the Nomination & Remuneration Committee.

In accordance with the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI Listing Regulations, a Board Evaluation Policy is in place for evaluation of the Chairperson, individual Directors, Committees and the Board.

A structured questionnaire developed by the Nomination & Remuneration Committee covering various aspects of the Boards functioning, Board culture, performance of specific duties by Directors and contribution to the Board proceedings was circulated to members of the Board for the financial year 2024-25. The Board as a whole, its Committees, the Chairperson and individual Directors were also separately evaluated in the Meeting of the Independent Directors held on 26th March 2025. The Meeting inter alia assessed the quality, quantity and timeliness of flow of information required for the Board to perform its duties properly. The entire Board, excluding the Director being evaluated, evaluated the performance of each Independent Director.

The Directors have expressed their satisfaction with the evaluation process conducted. Based on the findings from the evaluation process, the Board will continue to review its procedures, processes and effectiveness of Boards functioning, individual Directors effectiveness and contribution to the Boards functioning as well with a view to practicing the highest standards of Corporate Governance.

OCCUPATIONAL HEALTH AND 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 for Occupational Health, Safety & Environment (OHS&E) organisation and capable of meeting the national or international OHS&E requirements. In line with the said OHS&E requirement, the organisation 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.

The Company has devised a system to regularly update the Daily OH&S Message via email to all employees to build awareness on OH&S requirements in its workplace. There is a common sharing in-house intranet webpage (MBE Bridge) which contain OHS&E policy, manual, different operational control procedures, checklists, rewards/certificates and training models for employees to access.

During the year, the Company focused on Employee Health & Safety awareness training through online or offline mode and conducted many online training on Hazard Identification & Risk Assessment (HIRA), Behavior Based Safety (BBS), Process Safety Management (PSM), Product Safety Management ( Prod.SM ), Contractor Safety Management (CSM) and Industrial Best Safety Practices, apart from the regular training module.

The Company strives towards for achieving Zero Fatality or Environmental Harm and in order to bring it into reality, had set target to reduce Total Reportable Incident Rate (ie: TRIR) which was 0.76 (financial year 2012-13) down to 0.194 (financial year 2024-25). Severity Rate and Frequency Rates are as low as 0.389 and 0.194 respectively. Such low incident rate in an EPC company shows a sustainable improvement in Occupational Health, Safety & Environment Management System compared to other EPC firms in India.

McNally Bharat Engineering Company Limited has continued to adopt preventive measures on the spread of COVID-19 at office and jobsites, to control coronavirus infection among employees and service partners. Initiatives such as restrictions in duty hours, social distancing, thermal checking, wearing of 3-layer nose mask & hand sanitization etc. continues to be followed along with state/central protocols related to COVID-19. Besides, periodical office sanitization, vaccination to all employees and rapid testing to all site-based employees are highly appreciated by many customers. Furthermore, since 2020-21 the organisation has absorbed the COVID-related protocols into its day-to-day functioning and therefore continues to practice the preventive measures in the best interest of its employees and customers.

During the financial year 2024-25, running sites which achieved Loss Time Incident (LTI) free Man-hours are as follows: Sl.	Project Site	LTI free Man-hours
1	OCPL site	12.0 millions
2	KMPCL site	17.8 millions
3	Kawai Adani Power (O&M)	5.0 millions
4	Adani PKEB mines	4.6 millions
5	NTPC Kudgi site	2.9 millions
6	Coal India Ltd. sites (ie., MCL-Sardega, MCL-Ananta, SECL-Chhal, SECL-Dipka and SECL-Baroud)	more than 1 million
7	Coal Handling System HMEL-Bhatinda	5.2 millions

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, notably, 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 (DGMAP) (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 received 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 underline 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 Ltd.	National Safety Award (Mines)	2012	Ministry of Labour & Employment, GoI.
ACC Jamul (Cement Plant) ACC Ltd.	National Safety Award (Mines)	2015	Ministry of Labour & Employment, GoI
TPL Kalinganagar (3x67.5MW Gas Based Thermal Power Plant Project) Tata Projects Limited	National Safety Award (Mines)	2014	Ministry of Labour & Employment, GoI
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 (PDCL)	RoSPA Health & Safety Awards	2014	The Royal Society for the Prevention of Accidents, UK

SIGNIFICANT AND MATERIAL ORDERS

During the financial year 2024-25, 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. No change has taken place in the nature of business of the Company during the year under review.

MATERIAL CHANGES AND COMMITMENTS

Following are the material changes which had occurred since the last date of the financial year till the date of this Report:

- On 5th August 2025, it came to the Companys knowledge that the company regulatory authority in Singapore had deregistered MBE Mineral Technologies Pte Limited, its Singapore subsidiary.

- MBE Minerals Zambia Limited, the Zambian subsidiary, has had no operational or financial activity since the Company entered CIRP. Since, impairment of investment in the said entity had been recognized in the Companys books in earlier years, it was decided to dispose of the investment in near future.

Accordingly, the Company discontinued consolidating the financial results of the aforesaid overseas subsidiaries with effect from the quarter ended 30th June 2025.

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 because of new information, future developments or otherwise. Therefore, undue reliance should not be placed on these statements.

ACKNOWLEDGMENT

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
	Partha Sarathi Bhattacharyya
6th August 2025	(DIN 00329479)
Kolkata.	Chairman