DIRECTORS' REPORT Your Directors have pleasure in presenting the Fifty Second Annual Report together with audited statement of accounts for the year ended March 31,2015. Business Performance/ Review of Operations The financial year 2014-15 have been the most challenging year in the recent past for the entire infrastructure Sector. Complete policy paralysis at the Government level and resulting deferment and delay on all new projects in the infra sector reduced the overall opportunities for all the players. This has resulted in significant fall in order booking during the financial year by all the players. MBE is no exception and during the year the fresh order inflow was substantially lower at Rs. 1226 Cr. The Company during the year faced severe working capital crunch due to nonpayment of dues by certain Private and Public sector customers and delayed execution on part of some customers. This has affected the execution and the billing in spite of high opening order book at the beginning of the financial year. The borrowing level during the year increased substantially which also created pressure on cash flow and profitability due to high interest burden. Though the top line during the year was maintained at the same level of previous year, the pressure on high interest payout and higher provision of depreciation due to change in accounting policy resulted in loss of Rs. 114.22 Cr during the financial year. Some of the significant orders bagged during the year are mentioned below, which are currently under execution: • Substation Order from PGCILfor Rs118 crores • GIS Subsation Order from WBSETCL for Rs.21.10 crores. • Land Mark work for Nabinagar CW and make up water package for Rs. 350 crores • Petcoke handling plant for Chennai Petroleum Corporation Ltd for Rs. 228.46 Crores • Construction of Residential Accommodation at BD Bari, Jammu, Janglot, Ratnachuk for DGMAP at a contract value of Rs. 144.19cr • Construction of Muttom Depot for Kochi Metro of DMRC at a contract value of Rs. 69.91cr • Design, Engg, Manufacture, Supply of 1 set of Rotary WT & Beetle charger of Paradeep Port Trust at a contract value of 12.0 Crores • Design, Engg, Manufacture, Supply of 1No. 80 Ton Electric Level Luffing Crane of DGNP, Vizag at a contract value of 24.0 Crores Project Completed • Construction of Civil Foundation & Structural Steel Work for 6X150MW Captive Power Plant at Mahan Aluminum Project of Hindalco PROJECT EXECUTION During the year a number of projects were at various stages of execution. Some of the major projects which were completed during the year: • 9,000 TPD Cement Plant project at Jamul for ACC • BOP Package for 2 x 600 MW STPP of M/S SCCL • 400 KV Substation Extension Package (Package S1) of M/S PGCIL • 132 KV GIS Substation at Domkol & Nazirpur of M/S WBSETCL • Coal Handling Plant for 1x500 MW TPS at Vindyachal of NTPC • Coal Handling Plant for 3x250 MW TPS at Bongaigaon of NTPC • Coal Handling Plant for 2x500 MW at Sagardighi of WBPDCL • Ash Handling Plant for 2x660 MW at Mouda (Stage II) of NTPC • Ash Handling Plant for 3x800 MW at Kudgi of NTPC • Ash Handling Plant for 3x250 MW TPS at Bongaigaon of NTPC • Ash Handling Plant for 2x250 MW at Bhavnagar of M/S BECL • Limestone Milling and Conveying System for 2x250 MW at Bhavnagar of M/S BECL • CW & Make up Water Package for 2x600 MW at Nabinagar of NPGC • PT Plant for 2x600 MW at Nabinagar of NPGC • PT Plant including Intake for 1x500 MW at Bokaro of DVC • PT Plant for 2x660 MW at Mouda (Stage II ) of NTPC • Booster Pumping Station at Entally in Kolkata of KMC • Sinter Plant at Vizag for RINL • Blast Furnace (BF-5) Stock House for TPL, RSP • 35 TPH GAP for Mahan Aluminium Project, Hindalco • 52 TPH GAP for Aditya Aluminium Project, Hindalco • HDPS GAP for Mahan Aluminium Project, Hindalco • HDPS for Aditya Aluminium Project, Hindalco • Clubbed Water System Package, CCPP: OTPC ACTIVITY HIGHLIGHTS During the year, a number of significant, complex and large value projects were commissioned including Bellary CHP, HCSD Disposal System of Crescent Power, NLC BWE, Paste Fill Plant of HZL etc. Inspite of the tough economic scenario your Company has been able to book fresh orders of Rs. 1,226 Cr. (approx) in various sectors this year. Your Company has been consistently putting efforts towards improvement in Quality and Occupational Health and Safety Standards. MBECL already has ISO 9001-2008 and ISO 14001-2004 Certifications. Our Laboratory is certified by NABL for non-destructive testing. We are also pleased to inform that our OH&S Management System (OHSMS) has been certified this year by BS OHSAS 18001:2007. Our quality and safety standards maintained by us during execution of under HOLCIM Standard and BPCL Refinery at Mahul have been highly appreciated. SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS • McNally Sayaji Engineering Ltd. (MSEL) Major Orders received • JINDAL SAW - Ball Mill & Rod Mill Rs. 890 lacs • BGR, Chennai - Ring Granulator for 1500 TPH - Rs. 255 lacs • BGR, Chennai, Pulley for OPGCL - Rs. 105 lacs • TRF, Rod Mill for NMDC - Rs. 753 lacs • UCIL, Grinding system - Rs. 648 lacs • Navadaya, Rotary scrubber for export to S.A. - Rs. 107 lacs • Scorpio Engineering, Ring Granulator & Screening feeder forIPCL-Rs.218lacs • L & T , Double Roll Crusher for Aditya & Mahan Project - Rs. 94 lacs • L & T , Pulley for NCL - Rs.238 lacs • L & T , Screening Feeder for Chhabra CHP - Rs.165 lacs • JSPL, Double Roll Crusher - Rs. 107 lacs • Maihar Cement, Ring Granulator & Apron feeder - Rs. 50 lacs • HZL, Vibrating Screen - Rs. 30 lacs • JSW for Rs. 527 lacs • Danieli for Rs. 352 lacs • Kilburn for Rs. 284 lacs • Druk for Gypsum crushing plant for Rs. 89 lacs Major Billing in 2014-15- Kumardhubi • Shree Mahavir Ferro Alloys, Ball Mill for Rs. 250 lacs • Super Smelter, Ball mill and scrubber for Rs. 490 lacs • HZL, Screen for Rs. 30 lacs • JSPL, Double roll crusherfor Rs. 107 lacs • HDO, Ball mill for Rs. 93 lacs • JINDAL SAW - Ball Mill & Rod Mill for Rs. 890 lacs • TRF, Rod mill for NMDC, Rs. 550 lacs • Maihar Cement, Ring granulator & Apron feeder - Rs. 50 lacs • Dalmia Cement, Rotor assembly - Rs. 92 lacs • Humboldt Wedag, Slide shoe and other items for Rotary Kiln - Rs. 135 lacs • HZL for Screen & Reciprocating feeder - Rs. 50 lacs • BGR, Chennai for Pulley of OPGCL - Rs. 105 lacs • ACC, Jamul for Roller Screen, Pulley & Stacker - Rs. 460 lacs • SECL, Ring Granulator, Screen & Stacker - Rs. 360 lacs • NMDCforIdlerAssembly-Rs.56lacs • NTPC, Mouda for Silo - Rs 325 lacs MBE Coal & Mineral Technology India Ltd. Major orders received : • Renovation of existing Coarse Coal BATAC® Jig from CCL Sawang washery at Jharkhand. • Renovation of Coarse Coal and Fine Coal BATAC® Jigs from CCL Kedla Washery at Jharknand. • Supply of two(2) nos. 400 tph Deshaling BATAC® Jig and fixed & dewatering screens for coal washery from Monnet Ispat • Supply of 150 tph Batac Jig, Screens and Hydrocyclone from Mahavir Coal Resources at Katni. • Supply of equipment Centrifuges, De-Grit Cyclones & dense Media Cyclones, Screens & Sieve Bends to ACB India for 1.6 mtpa Coking Coal washery. • Several orders of dewatering screens from clients, BCCL, CCL Kathara and Utkal Energy. • Supply of dewatering screens to end user at Bosnia. • Design engineering, supply and erection & commissioning for dry gravity separation pilot equipment, AKAFLOW, along with M/s. AKW of Germany from National Metallurgical Laboratory, Ranchi. • Design Engineering, Supply and Erection Commissioning for 250 tph throughput capacity Silica Removal Plant from bauxite ore from Sesa Sterlite Ltd. at Lanjigrah. • Supply of 90 nos. of Solid Bowl Centrifuge for different environmental projects. Some of the major projects / orders completed during the year2014-15 : • Commissioning, PG test & handover of 2.5 MTPA non coking coal washery for S. V. Power Limited at Korba. • Completed renovation work of existing Coarse Coal BATAC® Jig from CCL Sawang washery at Jharkhand. • Completed renovation of Coarse Coal and Fine Coal BATAC® Jigs from CCL Kedla washery at Jharknand. • Completed supply of several Screen equipments to various clients like CCL, BCCL & Mahavir Coal Washery. • Completed supply of Screen equipments to end user at Bosnia. • Commissioning, Performance Guarantee Tests & handover for 0.6 MTPA Iron ore Beneficiation Plant for MSPL, Hospet, Karnataka. • Supplied 66 nos. Decanter Centrifuges for different Environmental Projects. MBE Mineral Technologies, Singapore: During the year, the Company sold 70% and 90% of its investment in Coal and Mineral Technology GmbH and Cologne Engineering GmbH respectively, both of which were held through its wholly owned subsidiary in Singapore. While the disinvestment in Coal and Mineral Technology GmbH resulted in substantial profits for the Company reported in its consolidated financials, the decision to dispose of holding in Cologne Engineering GmbH was prompted by lack of visibility in its turnaround from the present financial position. In terms of the agreement with the buyer of Coal and Mineral Technology GmbH, the proceeds are due within end September 2015 or any other extended date as may be agreed by both the parties. In accordance with general circular issued by the Ministry of Corporate Affairs, Governmentof lndia, the Balance Sheet, Profit and loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. A Statement containing brief financial details of the subsidiary companies is included in the Annual Report in the Chapter containing Consolidated Financial Statements. Dividend In absence of profit for the current Financial year (2014-15), the Board of Directors of your Company considered it prudent not to recommend any dividend on Equity Shares for the year under review as a measure of conservation. The Non Convertible Redeemable Preference Shares of Rs.100/- each issued by the Company is entitled to a fixed Dividend of 11.5% per annum as per the terms of issuance of such Non Convertible Redeemable Preference Shares. Accordingly, the Board of Directors of your Company has recommended a dividend of Rs.11.50 (11.5%) pershare on 975,000 Non Convertible Redeemable Preference Shares of Rs.100/- each. In absence of profit for the current year, the same will be adjusted out of the previous year's profit. The dividend will be tax free in the hands of the shareholders. The register of members and share transfer books will remain closed from September 21, 2015 to September 27, 2015 (both days inclusive). Share Capital During the Year ended 31st March, 2015, the Equity Share Capital of the Company has increased to 40593818 shares having a face value of Rs. 10/- each. The 11.5% Non Convertible Redeemable Preference Capital of the Company remains unchanged at 9,75,000 having face value of Rs. 100/- each. The proceeds of issue of the fresh equity capital of 95,00,000 has been utilised for the purpose it was issued for i.e to enhance the Company's net worth, improve its debt equity ratio and to meet its working capital and other requirements. Strategic Investment Your Company has entered into an agreement with EMC Limited ("EMC") and Williamson Magor Group ("Existing Promoters") to enable an additional equity investment of upto Rs. 100 Crores as primary equity capital infusion into your Company. Established in 1953, EMC Limited is a leading service provider in the Indian Power Transmission and Distribution sector. Earlier, MKN Investments, a group company of EMC, had made an equity investment of Rs. 50 crore in March 2015 in the Company and it holds 12.5% stake in the Company. This above mentioned capital raising of Rs 100 crore by your Company would be done through a preferential allotment of 10 million equity shares to EMC at a price of Rs. 100 per share. After this preferential issue, EMC group (along with MKN Investments) will hold 29.64% of your Company's expanded equity share capital. In addition, as per SEBI guidelines, there will also be an open offer by EMC and Williamson Magor Group for up to 26% of equity share capital of your Company. Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo The information required pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, is given as Annexure A to this report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT In terms of requirements of Clause 49 of the Listing Agreement(s) with the Stock Exchange(s), a Management Discussion and Analysis Report is attached as Annexure B forming part of this Report. Report on Corporate Governance The Company has adopted the best corporate governance norms and it has been our endeavour to comply and upgrade to the changing norms. In terms of requirements of Clause 49 of the Listing Agreement(s) with the Stock Exchange(s), a Report on Corporate Governance together with the Auditors' Certificate regarding compliances of conditions of Corporate Governance are attached as Annexure C forming part of this Report. Corporate Social Responsibility: In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has established a Corporate Social Responsibility (CSR) Committee. A CSR Policy has been formulated and is available on the website of the Company at <http://www.mcnallybharat.com/> investors/pdf/corporate-social-responsibility-policy.pdf .The policy encompasses the Company's philosophy for delineating its responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for welfare & sustainable development of the community at large. The Annual Report on CSR activities containing inter alia, the brief outline of the CSR policy, the CSR initiatives taken, the expenditure on CSR activities, as well as the composition of the CSR Committee forms a part of this Report as Annexure D. Directors' Responsibility Statement The Board acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 and Clause 49(III)(D)(4)(a) of the Listing Agreement with the Stock Exchanges for the year ended 31st March, 2015 and state that: 1) in the preparation of annual accounts, the applicable accounting standards have been followed. There are no material departures from prescribed accounting standards; 2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of profit/Loss of the Company for that period; 3) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4) the Directors have prepared the annual accounts on a going concern basis; 5) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and 6) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively Directors and Key Managerial Personnel: The Board with profound grief regret to inform you of the sad and premature demise of Late Mr. Deepak Khaitan, who passed away for his heavenly abode on 9th March 2015. Late Mr. Deepak Khaitan served the Company as its Executive Chairman since 2011. The Board acknowledges the significant contributions made by Mr. Khaitan for the growth of the Company during his long association with the Company. Mr. Sudipto Sarkar, who was an Independent Director, submitted his resignation on 6th April, 2015 due to his personal and professional commitments. The Board noted his resignation with regret and recorded its appreciation for the contributions made by Mr. Sarkar during his association with the Company. During the year, Miss. Nandini Khaitan was appointed as an Additional Director and also as an Independent Woman Director. The Company has received requisite Notice from a Member of the Company along with the deposits in terms of Section 160 of the Companies Act, 2013 proposing the candidature of Miss. Nandini Khaitan for appointment as Director at the forthcoming Annual General Meeting of the Company. Mr. Aditya Khaitan has been re-designated by the Board as the Chairman of the Company. The Company being a listed Company is required to have at least one third of the total number of Directors as Independent Directors according to Section 149(4) of the Companies Act, 2013. In the opinion of the Board Mr. A. K. Barman, Mr. V.K. Verma, Mr. S.R Dasgupta, Mr. P.H. Ravikumar are Independent directors in terms of the Listing Agreements and meet the criteria of independence in terms of Section 149 (6) of the Act, should be considered for appointment as Independent Directors of the Company under Section 149, 150 and 152 read with Schedule IVof the Act. Accordingly resolutions will be placed at the ensuing Annual General Meeting (AGM) for their appointment as Independent Directors from the date of the ensuing AGM upto the expiry of five consecutive years or date of the 57th AGM whichever is earlier. After such appointment the said Directors will no longer be liable to retire by rotation during their tenure as Independent Directors. In accordance with the provisions of the Articles of Association of the Company read with Section 152 of the Act, Mr. Aditya Khaitan and Mr. Amritanshu Khaitan will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re appointment. During the year, the Company had four Key Managerial Personnel, being Late Mr. Deepak Khaitan (Mr. Khaitan passed away on 9th March, 2015 and had acted as the Executive Chairman till such date), Mr. Prabir Ghosh, Whole Time Director & Group CFO, Mr. P. K. Chandra, Whole Time Director & COO and Mr. Sukanta Chattopadhyay, Sr. V.P. Commercial & Company Secretary. Mr. Sukanta Chattopadhyay, Sr. V.P. Commercial & Company Secretary submitted his resignation on 15h June, 2015 due to his personal commitments. The Board noted his resignation with regret and recorded its appreciation for the contributions made by Mr. Chattopadhyay during his association with the Company. The Independent Directors have submitted their disclosures to the Board that they meet the criteria as stipulated in Section 149(6) of the Companies Act, 2013. The Board met six times during the year on May 30, 2014, August 14, 2014, November 14, 2014, February 02, 2015, February 14, 2015 and March 30, 2015. The intervening gap between any two Board Meetings was within the period prescribed by the Companies Act, 2013. During the year under review the Company has formulated a Familiarisation Programme for Independent Directors and the same is disclosed on the website of the Company and can be accessed at <http://www.mcnallybharat.com/> investors/pdf/familarisation-programme-for-IDs.pdf. Board Evaluation During the year, the Board formulated and adopted a Board Evaluation Framework for evaluating the performance of the Board as a whole, Committees of the Board and the Individual Directors on the Board. Pursuant to the said Evaluation Framework, the Board evaluated the performance of the Board, its Committees and the Individual Directors for the financial year 2014-15. The Board was of the view that the performance of the Board as a whole was adequate and fulfilled the parameters stipulated in the evaluation framework in its pro growth activity and facing challenging operational and economic adversities during the year. The Board also ensured that the Committees functioned adequately and independently in terms of the requirements of the Companies Act, 2013 and the Listing Agreement and at the same time supported as well as coordinated with the Board to help in its decision making. The individual Directors' performance was also evaluated and the Board was of the view that the Directors fulfilled their applicable responsibilities and duties as laid down by the listing agreement and the Companies Act, 2013 and at the same time contributed with their valuable knowledge, experience and expertise to grab the opportunity and counter the adverse challenges faced by the Company during the year. Audit Committee The Audit Committee of the Board as on 31st March 2015 consisted of Mr. V.K. Verma, Mr. A.K. Barman, Mr. U. Parekh and Mr. S.R Dasgupta. Mr. V.K Verma, a Non-Executive Independent Director, is the Chairman of the Audit Committee. The Company has established a vigil mechanism / whistle blower policy and oversees through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also made provisions for adequate safeguards against victimisation of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of the employees and the Company. The vigil mechanism / whistle blower policy of the Company has been uploaded on the website of the Company and can be accessed at <http://www.mcnallybharat.com/> investors/pdf/vigil-policy.pdf. Nomination and Remuneration Committee The Nomination and Remuneration Committee of the Board as on 31st March 2015 is comprised of Mr. Asim. Kr. Barman, a Non Executive Independent Director as its Chairman and Mr. V.K. Verma , Mr. S.R Dasgupta and Mr. Utsav Parekh, Non Executive Independent Directors as its Members. The Company's Policy relating to appointment of Directors, payment of managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and clause 49 of the Listing Agreement is attached to this report as Annexure E. Particulars of Loans, Guarantees or Investments made underSection 186 of the Companies Act, 2013 The particulars of loans, guarantee or investment made under Section 186 of the Companies Act, 2013 are furnished in the Notes to the Financial Statements for the year ended March 31,2015. Particulars of contracts or arrangements made with related parties and related party policy The particulars of contracts or arrangements made with related parties pursuant to Section 188(1) of the Companies Act, 2013, furnished in Form AOC -2, is attached to this report as Annexure F. During the year under review the Company has formulated a Related Party Transaction Policy and the same is disclosed on the website of the Company and can be accessed at <http://www.mcnallybharat.com/investors/pdf/related-party->transaction-policy.pdf. Deposit During the financial year ended March 31, 2015, your Company has not accepted any deposits from the public. Going Concern Status No significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operation in the future. Details in respect ofadequacy of Internal Financial Controls with reference to the Financial Statements Financial statements (i.e. Balance Sheet, Profit & Loss Statement and Cash-Flow Statement, together with notes) are prepared through the process which has automated as well as manual controls to ensure accuracy of recording all transactions which have taken place during any accounting period, and the resultant financial position at period end. All data pertaining to payroll, purchases, manufacturing, project cost and other financial activities are recorded through ERP systems operating in various sites as well as head office. All data/ transactions entered in systems are checked by various functional personnel on the basis of supporting documents & records, then the accounting entries are checked by accounts personnel, and finally those are validated by managerial personnel. At periodic intervals, the accounting data are compiled and financial statements are prepared. While preparing the financial statements, it is ensured that all transactions pertaining to the accounting period are recorded. Fixed assets, all significant items of stores and monetary assets are physically verified. Balance confirmations are obtained for all significant items of trade receivables and advances. After preparation of the financial statements, all items appearing in the statements are analysed in order to ensure overall reasonableness. The Company has adopted policies and procedures including Internal Audit system for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. Annual Return The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached to this Report as Annexure G. Statutory Auditors M/s Lovelock and Lewes, Chartered Accountants (FRN: 301056E), the Statutory Auditors of the Company hold office till the conclusion of the Annual General Meeting for the year ended March 31,2017, under the provisions of Section 139(2) of the Companies Act, 2013, subject to the ratification of the Members of the Company. Accordingly, the ratification of their appointment as the Statutory Auditors of the Company is being placed before the Members at the Annual General Meeting. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment. Secretarial Audit In terms of the requirements of Section 204 of the Companies Act, 2013 the Secretarial Audit of the Company for the year ended March 31, 2015, was conducted by M/S A. K. Labh & Co., Company Secretaries. The Secretarial Auditors' Report is attached to this Report as Annexure H and forms part of the Directors' Report. Clarifications regarding the matter of emphasis of the report of the Secretarial Auditor are as under: 1. Due to severe cash crunch there were some lapses in depositing the contributions towards Provident Fund and the Employee State Insurance with the prescribed authorities. However, the Company is taking best possible measures to regularise the same. 2. The Company has taken the requisite approval from its shareholders through a special resolution at the Extra Ordinary General Meeting of the members of the Company held on July 30, 2015 and has applied to the Ministry of Corporate Affairs for waiver of the excess payment of remuneration to its managerial personnel during the financial year2014-15. 3. The Company has Chief Financial Officer (CFO) in terms of Section 203 of the Companies Act, 2013 and the Company is in the process of filing the requisite form (DIR-12) with the Office of the Registrar of Companies for such appointment. Cost Auditor M/s A Bhattacharya & Associates, Cost Auditors has been appointed as Cost Auditors for conducting the audit of cost records of the Company for the Financial Year 2014-15. Auditors' Report The Board has duly examined the Statutory Auditors' Report to the accounts and clarifications regarding the qualified opinion of the Statutory Auditors are as underand the same have also been included in the Notes to the Accounts section of the Annual Report: Standalone Financial Statement During the previous financial year, the Company paid a sum of Rs. 5.60 Crores towards managerial remuneration to its Executive Chairman and two Whole Time Directors, out of which a sum of Rs. 3.79 crores was in excess of the maximum permissible limit under The Companies Act, 2013 read with Schedule V of the said Act. However, the Company has taken necessary approval from its shareholder through a special resolution at the Extra Ordinary General Meeting held on July 30, 2015 and has applied to the Central Government waiver of such excess payment of remuneration to its managerial personnel. Consolidated Financial Statement The Company on 24th March 2015 disposed 70% of its investment in one of its step-down subsidiaries in Germany for EURO 14 mio. As per the amended agreement with the buyer, the sales consideration is to be received on or before 30th September 2015 or any other extended date as may be agreed by both the parties. Management feels the sales consideration will be received within the due date in relation to which the Auditor has expressed qualified opinion/ reservation in their Report. Risk Management Policy Your Company has a robust Risk Management Policy. The Management of your Company regularly monitors the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. However, none of the identified risks, in the opinion of the Board, are threatening to the existence of the Company. Insurance The assets of the Company including building, shed, plant & machinery, etc. are adequately insured. Occupational Health & Safety In line with your Company objectives, the Occupational Health & Safety (Oh&S) Management System has been integrated & tuned up with the production/construction process with an eye on continual improvement. Your Company has revised the OH&S Policy in July 2013 and laid down a norm to establish the OH&S MANAGEMENT SYSTEM, which has subsequently been certified as per BS OHSAS 18001:2007 standard in October 2013. The OH&S system and norms have been accorded international recognition and are compatible with international standards. As a part of the OH&S Management System, there are periodic audits, training and inspections to ensure health & safety compliance at all the sites. The Company has a system of 'Daily OH&S Message' for all the email users of the Company, which gives update about recent OH&S requirement. There is an intranet webpage (MBE-Bridge) for OH&S, which contains 'Procedure', 'Formats', copy of 'Certificates' and 'Training' model etc. In 2014 MBECL as a whole achieved 'No Fatality' records, which shows a sustainable improvement in Occupational Health & Safety. Apart from that there are many satisfied customers, who issued 'Merit Certificate' for excellent safety performance in their project sites this year (such as BPCL-Kochi Refinery, NTPC Mauda, ACC Expansion Project Jamul, WBPDCL for Sagardighi Thermal Power-CHP#2 and Tata Projects - Kalinganagar etc.). This year the Company achieved National Safety Council Award for TPL-Kalinganagar site and in recent past the Company was awarded international recognitions like RoSPA Awards etc. Particulars Of Employees The ratio of the remuneration of each Director to the median employee's remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached to this Report as Annexure I. Cautionary Statement Certain statements in the Directors' Report describing the Company's operations, objectives, projections and expectations regarding future performance may constitute 'forward looking statements' with the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied, depending on the economic conditions, Government policies and other incidental factors and developments. Acknowledgement The Directors place on record their sincere appreciation for significant contribution made by the employees through their dedication, hard work, active involvement and devoted services rendered. The Directors would also like to thank all the stakeholders, investors including Bankers and other business associates, who have extended their valuable support and encouragement. This has, understandably, been critical for the Company's success. The Directors look forward to their continued support and understanding in the years to come. For and On behalf of the Board of Directors Prasanta Kumar Chandra Whole Time Director & COO Prabir Ghosh Whole Time Director & Group CFO Place : Kolkata, date : August 13, 2015 |