YEARS OF CELEBRATING THE MAHATMA MECON MECON

MECON LIMTED (A Govt. of India Enterprise) MECON LIMITED

Head O ce Vivekananda Path, Doranda, Ranchi - 834002, Jharkhand, India CIN No. - U74140JH1973GOI001199 www.meconlimited.co.in For Enquiry Contact Joint General Manager (Marketing) Phone : +91-651-2483136/2481440, Fax : +91-651-2482214/ 2482189 E-mail: [email protected]

Major O ces

City Phone Fax e-mail Bangalore +91-80-26252000 +91-80-26576352 [email protected] New Delhi +91-11-22041872 +91-11-22041214 [email protected] th Navi Mumbai +91-22-27812155-58 +91-22-27812275 [email protected] 46 ANNUAL REPORT Kolkata +91-33-22822381-82 +91-33-22824441 [email protected] 2018-19 Find us on : @MECONLimited /@meconranchi meconranchi

396_1019_ Annapurna Press & Process 0651-2331800, [email protected] GLIMPSES OF CSR ACTIVITIES

CMD MECON Shri Atul Bhatt, welcoming Hon’ble Shri Dharmendra Pradhan, Hon’ble Shri Dharmendra Pradhan, Minister of Petroleum & Natural Gas and Minister of Steel, Minister of Petroleum & Natural Gas and Minister of Steel along with Shri Atul Bhatt, CMD MECON, Shri PK Sarangi, Director (Technical), Shri Goutam Chatterjee, Director (Commercial), Shri Salil Kumar, Director (Projects) and Shri RH Juneja, Director (Finance) during Review meeting of MECON, at Ranchi

Foundation Laying of Boys Hostel Building at Orphanage Cataract Surgery of Villagers of Mecon's Adopted Village at (Anmol Basera), Village - Sungi, Karra, District - Khunti Ispat Hospital, Shyamali

Smt. Rasika Chaube, Additional Secretary, Ministry of Steel, being briefed about Shri Yogendra Paswan, member of National Commission for Scheduled Caste various projects of MECON during her visit to technical sections of MECON (NCSC) during his visit to MECON

Annual Examination of Stitching Training Centres Health Camp at Adopted Village - Sungi, Karra, District - Ranchi

Under the aegis of Ministry of Steel, MECON participated in METEC 2019 at Shri Atul Bhatt, CMD MECON, addressing the gathering at India Steel 2019, Dusseldorf, Germany, to showcase India’s Steel Growth story at Indian Steel Pavilion. 4th International Exhibition & Conference on Steel Sector, at Mumbai.

Painting Competition (Swacchta Abhiyan) for the School Children Swacchta Abhiyan at Adopted Village - Pancha, of Adopted Village - Sungi, Karra, District - Khunti Bundu, District - Ranchi

MECON was awarded 1st prize in the16th National Award on Excellence in Cost Management MECON received 1st CSR Honourable Mention 2019- Excellence in CSR in Challenging Circumstances 2018, category- Consulting & others, by the Institute of Cost Accountants of India from Ministry of Corporate Affairs in presence of Hon'ble President of India and other dignitaries for implementation of Solar water pumping system in adopted village, Pancha CORPORATE VISION

To be an internationally recognized brand in design, engineering, consultancy, project management and EPC execution.

CORPORATE MISSION • To be a global centre of excellence for providing innovative and cost– effective engineering and technological solutions in Metals & Mining as well as diversified sectors like Energy, Infrastructure, Space, Defence etc. • Leverage deep domain knowledge in the metals and mining sectors to provide solutions from concept to commissioning. • Leverage in-house capabilities to provide engineering, technological and project management services to priority sectors of economy. • Develop indigenous technological base and promote self reliance. • Expand geo-strategic presence and export of services. LEADERSHIP AT MECON As on the date of AGM Shri Atul Bhatt Chairman and Managing Director

Shri P. K. Sarangi Shri Goutam Chatterjee Shri Salil Kumar Shri R. H. Juneja Director (Technical) Director (Commercial) Director (Projects) Director (Finance) w.e.f. 20.04.2018

Shri Saraswati Prasad, IAS Smt. Rasika Chaube Government Director Government Director

Shri Sisir Kumar Appikatla Shri Deepak Krishan Independent Director Independent Director w.e.f. 23.01.2019 CORPORATE INFORMATION BANKERS

State Bank of India Union Bank of India Indian Overseas Bank STATUTORY AUDITOR Bank of Baroda United Bank of India M/s V. Rohatgi & Company YES Bank Chartered Accountants, Andhra Bank 1st Floor, Sarjana Building,1, Main Road, HDFC Bank Ranchi – 834001 (Jharkhand) Canara Bank Axis Bank FINANCE INCHARGE ICICI Bank IndusInd Bank Shri S. Samanta

COMPANY SECRETARY CORPORATE IDENTIFICATON NUMBER

Shri Ravi Bambha U74140JH1973GOI001199

REGISTERED OFFICE WEBSITE

Vivekanand Path, Doranda www.meconlimited.co.in Ranchi - 834002 Jharkhand INDIA MECON - SUCCESS STORY

MECON is India’s frontline Design, Engineering & METALS Consultancy, Project Management Consultancy and Contracting organization under Ministry of Steel, Govt. of India, rendering services required for setting-up of projects from Concept to Commissioning in the areas of Metals & Mining, Energy, Infrastructure and other Strategic sectors. With strong workforce of over 1050 experienced & dedicated engineers, scientists and technologists, having network of ENERGY offices spread all over the country and extensive capabilities in handling Consultancy and EPC projects, MECON is one of the biggest Consultancy & Contracting organization in the world. Our multi-skilled expertise in 35 technical disciplines creates the synergy vital for realizing projects in Time, Cost and Quality. INFRASTRUCTURE We have successfully completed over 3,500 consultancy and EPC assignments in India and abroad covering wide range of areas and services. We are an ISO 9001:2015 Company and have strategic technological partnerships with leading International organizations.

MAJOR ACHIEVEMENTS

50+ 150+

Years 135+ 53 Publications of Assignments Total presence completed 300+ 16 Patents worldwide EIA / EMP 110+ Sectors Reports NABET since EPC accreditation 1990. projects executed CONTENTS

6 Chairman’s Speech

9 Board Report

26 MGT 9 - Extract of Annual Return

33 AOC 2 - Statement pursuant to Section 134

34 CSR & Sustainability

52 Technology Absorption

53 (MDAR) Management Discussion & Analysis Report

60 Corporate Governance

65 Independent Auditors’ Report

75 C&AG’s Comments

76 Balance Sheet

77 Statement of Profit & Loss

78 Statement of changes in Equity

79 Cash Flow Statement (Indirect Method)

81 Notes to Financial Statements

132 AOC 1 - Statement pursuant to Section 129 MECON

CHAIRMAN’S SPEECH

First, Strengthen the Core & Strategic sectors; To this end we seek to create further value by developing the opportunities embedded in our existing operations and move up the value chain for offering end-to-end EPC services. Second, Expand the horizon in Diversified sectors; To develop our portfolio, we intend to look beyond our core business for other growth opportunities based on priority sectors of the GoI. Finally Third, expand Geographical reach; To gain access to International markets and seek new opportunities to fuel Company’s future growth. This strategy and our performance this fiscal further emboldens our aspiration of growing into a ₹1500 Crore Company over a period of five years. To summarize, 2018-19 has been a year of good progress for our company. We have emerged stronger with a restructured organization that positions us well to continue executing our strategy over the coming years. Physical and Financial Performance Your Company’s well-planned business initiatives and strong Corporate Strategy have delivered a reasonable performance and we are optimistic about enhancing the growth rate with our carefully prepared business strategies. Your Company has registered a Turnover of ₹470.17 Crore this FY as against ₹445.72 Crore the previous Dear Fellow Shareholders, year and has earned a Profit After Tax of ₹13.74 Crore. The Earnings per Employee of the Company for the t is my pleasure to welcome you all to the 46th Annual financial year 2018-19 has also improved by 17.90% as IGeneral Meeting of your Company. compared to previous year. The 2018-19 has been a year of building on the Your Company has sustained its growth in the domestic achievements of the last fiscal and scaling new heights, market and has taken steps to enhance presence in whilst remaining profitable. It gives me immense various overseas markets. The perseverance to adapt pleasure to inform you that your Company has made new technologies has redefined perception of your giant strides in achieving Order Booking of ₹3191.75 Company, which is now seen to be a Transformational Crore, breaking all records and more than doubling Consultant, bringing-in new technologies, designs, our previous record of ₹1418.65 Crore in FY2016-17. process know-how as well as new standards in This continual development and progress has largely automation and safety in the Iron & Steel Industry. been due to the commitment of Team MECON, support Your Company’s continued business strategy to expand and encouragement from all our stakeholders and the horizon in diversified sectors has yielded rich dividends foresight and judicious planning of your Management, and the ₹3191.75 Crore Order Booked across the 3 in putting into place, a resilient Corporate Plan with business verticals this fiscal, has set a new benchmark business strategy, based on its core competencies and for us, overshadowing all previous records. diversification policy to de-risk business from cyclicity The patronage and massive repeat business that your of Steel sector. Company has received from some of its major clients, Our business strategy, in a nutshell, focuses on a 3 bears testimony to the success of your Company’s pronged approach for growth: resolve to cater to the varied needs of the customer, 6 MECON MECON Limited

through prompt response and quality deliverables, imported Iron & Steel. Within two years of across the range of our capabilities. Salient projects its implementation, the country has saved bagged include: around INR 8,000 Crore by increasing import ŠŠ Assignments from UCIL for Development of substitution through augmented usage of several Uranium Projects from Concept to domestically manufactured steel. Commissioning as well as Expansion of existing ŠŠ Urja Ganga: The “Energy Highway (Urja Uranium projects. In addition, UCIL have also Ganga)” of Eastern India a major step of GoI, entrusted your company to carry out Centralized towards collective growth and development of Procurement of Spares, Consumables and services the Eastern region of India. Your Company is for their existing Mines and Plants. providing Engineering and Project Management ŠŠ Assignments from ISRO Consultancy services for approximately 2900km Natural Gas (NG) Pipeline projects and India’s ¾¾ EPC service for Integrated Engine Testing First Integrated LNG Satellite Station for GAIL. Facility of IPRC – Semi Cryo engine for ISRO, Mahendragiri. ŠŠ Bharatnet: A project of national importance ¾¾ Consultancy services for Revolving Dome for envisioned by GoI to digitally connect all the Gram 2.5m dia Telescope for ISRO at Mount Abu. Panchayats and Villages of India consequently ¾¾ PMC services for Payload Fabrication & achieving the goal of Digital India. Your company Testing Facility for ISRO at Bopal, Ahemdabad. is providing Project Management Consultancy services for the BharatNet Phase – II Project ¾ ¾ Consultancy services for Solid Propellant in Jharkhand for Jharkhand Communications Space Booster Plant (SPROB), Augmentation Network Limited, GoJ in 11 Districts and 1684 Facilities for ISRO, Sriharikota. Gram Panchayats. Contribution in Priority Sectors of GoI This year your Company completes 60 illustrious years ŠŠ Railway Station Redevelopment: Conceived of contributing to the socio-economic growth of the by the Hon’ble Prime Minister, this project is for country. We have secured a plethora of jobs in the fields the redevelopment of 400 stations to world class of Metals, Energy and Infrastructure which illustrate stations that deploy state of the art sustainable your Company’s technical expertise in diversified fields. technologies. Indian Railway Stations Development Corporation has awarded your Company projects In the quest for growth your Company has aligned its for providing Design, Engineering, Consultancy business strategy to focus on the major initiatives of and PMC services for eight (8) stations: Andheri, the GoI and some of the major projects being executed Bokaro Steel City, Lokmanya Tilak, Bandra under these initiatives include: Terminus, Lonavala, Ranchi, Ajmer and Chennai ŠŠ Make in India: Continuing in its endeavor towards Egmore. this national mission, your Company Environment Management ¾¾ conceptualized the idea of ‘Indigenization With understanding of its responsibility towards the of Capital Goods & Spares in Iron & Steel environment and society, your Company also focuses industry’ and as Knowledge Partner , under on other tangibles like, value addition in terms of the aegis of Ministry of Steel, organized a improved efficiency and environmental protection conclave on “Capital goods for Steel Sector: etc. At a time of challenges posed by changing climate, Manufacture in India” at Bhubaneswar, your company has endeavored to adapt and rethink the Odisha. During the conclave 38 MoUs were energy efficiency, safety, resource conservation, zero signed among steel producers, equipment discharge and waste control measures, for existing as manufacturers and foreign steel technology well as future projects assigned to it. suppliers, which is expected to drive the indigenization of capital goods & spares for Your Company has been retained as Environmental minimizing Import Bill of the country. Consultant for challenging environmental projects of various clients. Significant environmental engineering ¾ ¾ Your Company, as an active member of projects carried out during the year include: Standing Committee & Grievance Committee Š on Domestically Manufactured Iron and Steel Š Hexavalent Chromium Remediation Project of Products (DMI&SP) Policy, is contributing OMC South Kalia Pani in Odisha - for providing in implementation of the policy for Project Management and Consultancy services for providing preference to ‘Make in India’ over remediation of hexavalent chromium from mine 7 MECON

discharge effluent. special projects carried out was in past, the “Solar Photovoltaic based Drinking Water System” at Pancha, ŠŠ Environmental Impact Assessment (EIA), Ranchi (Jharkhand) for providing safe drinking water Environmental Clearance (EC) & Coastal to the underprivileged sections of the society, through Regulatory Zone (CRZ) clearance from MOEFCC usage of clean and renewable source of energy. As for “Away from Reactor (AFR), spent fuel storage a recognition of this effort, your company has been facility” at Kudankulam, Tamilnadu for Nuclear selected to receive Honourable Mention under the Power Corporation of India Limited. National CSR Awards 2018, in the category- Corporate Human Resource Awards in CSR in Challenging Circumstance, sub- MECON’s commitment to its dream of becoming category- East by Ministry of Corporate Affairs, GoI. an organization par excellence, demands company’s Steps towards Good Governance attention to continuous expansion of the skills set of its Your Company’s Corporate Governance principle employees, through continuous investment by way of is based on imbibing best practices with emphasis participation in National and International Technical on integrity, honesty and ensuring transparency, seminars, Specialized technical trainings and in-house accountability, compliance of all statutory and Mentoring programs, etc. regulatory requirements and adhering to integrity in Additionally, your company has provided apropos business ethics. training to an appreciable number of middle and senior Like the past years, this year also your Company scored level executives, through state-of-the-art programs, ‘Excellent’ rating in compliance to Guidelines on including those offered by ‘Centre of Excellence’ Corporate Governance issued by Government of India institutes through DPE. which maintains our record of Excellent rating every Corporate Social Responsibility year since inception. Your company, as a responsible Public Sector Acknowledgement entity, has been shouldering its Corporate Social I acknowledge that all achievements have been possible Responsibility (CSR) with the same commitment and only due to persistent and dedicated efforts made by pride as providing technological services to the nation. the employees of the Company, who have always Your company has been carrying out activities for the contributed their best for the Company. development & welfare of underprivileged sections of the society, in slum and backward areas, in & around I am also grateful for the capable guidance of my Ranchi as well as Naxal affected adopted villages of colleagues on the Board, gratitude for their prudent Ranchi and Khunti districts, which are among the GoI counsel and continued guidance. identified Aspirational districts of Jharkhand. I gratefully acknowledge the support extended to During FY 2018-19, your company, in addition to the us by GoI, Ministry of Steel and thank them for the perennial CSR programs for women empowerment confidence and trust bestowed upon the Company and and education, has extensively worked towards the the opportunities given for growth. Your continued Government’s Annual theme of Education & Health support, trust and encouragement, is what gives us Care. confidence and motivation to strive for excellence. Out of many impactful CSR projects, one of the Thank you & Jai Hind!

8 MECON MECON Limited BOARD REPORT

Dear Members, our Directors have the pleasure in presenting 46th YAnnual Report on the operations of the Company and the Statements of Accounts for the Financial Year ended on 31st March, 2019. The Report of the Statutory Auditors and the Comments on the Accounts of the Company by the Comptroller and Auditor General of India (C&AG) are annexed to this Report. 1.0 PERFORMANCE HIGHLIGHTS The financial year 2018-19 settles down on satisfactory note for MECON as the company maintained the ¾¾ FAC for Coal Handling Plant has been issued. profitable trail though modest, while registering improved turnover and has showcased an encouraging business procurement score card. Oil & Gas and Mining Sectors have emerged as flag runners of the company’s business portfolio clearly showing the diversified areas of future business roadmap in addition to putting firm foot forward in metals by consolidating our in-house strength and reinforcing with appropriate partnerships with technology know-how leaders to break new grounds as well as to stay on the cutting edge of technology in core sector. ¾¾ Commissioning of Propane plant has been So, needless to say that imperatives like recovery of completed. sticky dues and more committed performance on projects under execution would have to be pursued rigorously to improve the bottom lines. Major prestigious projects of national importance completed / under progress during the year include: Metals Sector ŠŠ Detailed Engineering & Consultancy services for 7.0 Mtpa Expansion Plan of SAIL/Bhilai Steel Plant have been provided by your company and following are the major achievements: ŠŠ Detailed Engineering & Consultancy services for ¾¾ Performance Guarantee certificate issued for 5.7 Mtpa Expansion Project of SAIL/Bokaro Steel Coke Oven Battery No.-9, BSP Bhilai. Plant and following are the major achievements:

ŠŠ Detailed Engineering & Consultancy services ¾¾ Commissioning certificate issued for Wet for 4.2 Mtpa Expansion Project of SAIL/ Quenching System of COB-7 & 8, BSL Bokaro. Rourkela Steel Plant and following are the major achievements: ŠŠ SAIL/Durgapur Steel Plant had entrusted your company for carrying out Extended Category-II ¾¾ Performance Guarantee certificate issued for Capital Repairs of Blast Furnace # 4 on EPC basis. Coke Oven Battery No.-6, RSP Rourkela with BF blowing-in has been successfully done. Computerized Oven Heating Control System (Level-2 automation). ŠŠ Detailed Engineering & Consultancy including ¾¾ FAC for Torpedo Ladle Repair shop has been Project Management Consultancy services for issued. 2.5 Mtpa New Stream Expansion Plan of SAIL/

9 MECON

IISCO Steel Plant, Burnpur have been provided including Project Management Consultancy by your company and following are the major services are being provided by your company for achievements: setting up of 3.0 Mtpa Integrated Steel Plant of NMDC Limited at Nagarnar. The project is under ¾¾ Secondary Refining units have been commissioned. execution.

¾¾ Electrical power from Grid has been charged ¾¾ Performance Guarantee Test of Continuous to Main Receiving Station (MRS) after Casting Plant was successfully conducted & conducting Preliminary Acceptance Tests PG certificate has been issued. (PAT) and for Oxygen Plant, PAC has been issued. ¾¾ Integrated Operation of 2.5 Mtpa New Stream Expansion Project has been issued by ISP to ¾¾ Successful Charging and Energisation of 10 MECON. nos. 33/6.6kV LBDS for transmission of power to various shops/units in the entire steel plant ¾¾ Performance Guarantee Test of Hot Metal NISP, Nagarnar has been completed. Desulfurization Plant was successfully completed & PG certificate has been issued. ¾¾ Engineering of the major technological packages like Raw Material Handling System ¾¾ Performance Guarantee Test of Reheating (RMHS), Sinter Plant, Blast Furnace, Steel Furnace of Universal Section Mill has been Making Shop (SMS), Hot Strip Mill & completed and PG certificate has been issued. Thin Slab Caster (HSM & TSC) have been completed.

¾¾ Coal route unit of RMHS, Coke Oven Battery No. 1, Sinter Plant, Blast Furnace, Oxygen Plant, readiness for Hydro Test of Boiler-1 of Power Plant, Pipe laying for Water from Indrāvati river, LPG for Coke Oven heating and interplant pipeline for Nitrogen, Steam & Compressed Air are in advanced stage of execution.

¾¾ Load Trial run of wagon tippler has been ¾¾ Final Acceptance Certificate of Coke Oven conducted successfully. Battery#11 & Blast Furnace Complex have been issued. ŠŠ JSW Steel Limited, Vijaynagar Works has entrusted your Company for providing Design, ¾¾ Performance Guarantee of IPPL with mixing Engineering & Consultancy services for Rebuilding station, Plant wide Networking & By product & Capacity Enhancement of their Blast Furnace Plant have been completed. #3 (4,019 m3 Useful Volume) to become country’s largest Blast Furnace (5,339 m3 Useful Volume). ŠŠ Detailed Engineering & Consultancy services The project is under execution. 10 MECON MECON Limited

entrusted your Company for providing Design, Engineering & Consultancy services for installation of their New Pellet Plant # 2 (816 m2) which will be the largest in the country. The project is under execution. ŠŠ JSW Steel has entrusted your company for providing consultancy & detail engineering services to implement independent SGP for Blast Furnace#1. The project is under execution. Non Ferrous Sector ŠŠ VISA Steel Limited, Jajpur, had entrusted your Š Company for providing Design, Engineering Š Birla Copper Ltd. (Aditya Birla group) has awarded your company the assignment for & Consultancy services for Technological Up- Detailed Study and preparation of Feasibility gradation of their Mini Blast Furnace. All the jobs Report for its Phase – 2 Upgradation of Copper have been completed on schedule and the Blast Smelter and Sulphuric Acid Plant-1 at Dahej, Furnace is ready for commissioning. Gujarat. The Final report has been submitted to ŠŠ KIC Metaliks Limited, Durgapur has entrusted client. your Company for providing Design, Engineering ŠŠ Birla Copper Ltd. (Aditya Birla group) has & Consultancy services for augmentation of hot entrusted your company for the preparation of metal production by introducing Pulverized Coal Feasibility Report for its proposed greenfield Injection System, Waste Heat Recovery System expansion of 5.0 LTPA Copper Smelter and (in Hot Blast Stoves) and Oxygen Enrichment Refinery Plant at Dahej, Gujarat. The Report is facilities for Cold Blast in their existing Mini Blast under preparation. Furnace. The project is under execution. ŠŠ Industrial Promotion and Investment Corporation Ltd. (IPICOL), Odisha had entrusted MECON with the identification and finalization of Aluminium Downstream Products for their business promotion in Odisha. The Final Report has been submitted to Client. ŠŠ Industrial Promotion and Investment Corporation Ltd. (IPICOL), Odisha had entrusted MECON for the land assessment for Aditya Birla’s Aluminium Smelter and Captive Power Plant complex at Lapanga, Odisha. The report is under preparation. ŠŠ JSW Steel Limited, Dolvi Works has entrusted ŠŠ Mishra Dhatu Nigam Ltd. (MIDHANI), your Company for providing Design, Engineering Hyderabad has entrusted your company for the & Consultancy services for installation of their preparation of DPR for Hi-End Aluminium Alloy New Pellet Plant # 2 (816 m2) which will be Flat Rolled Products Plant at Andhra Pradesh the largest in the country. The project is under to meet the specific requirements of defence, execution. automotive as well as other special applications. The Final DPR has been submitted to client.The project is to be set up in Joint Venture with Public Sector NALCO. The DPR has been cleared by Niti Aayog for setting up the proposed project at Nellore, AP. ŠŠ MECON is carrying out the Detailed Engineering and consultancy Services for setting up an Aluminium Alloy Wire Rod Plant at Angul for NALCO. The project is under execution. ŠŠ Adani Group had assigned MECON to carry out ŠŠ JSW Steel Limited, Vijayanagar Works has a Bankable Feasibility Report for their proposed 5 11 MECON

LTPA Copper Project to be set up at Adani Ports The target for Gas from Phulpur to Varanasi, and Special Economic Zone Ltd.(APSEZ), Gujarat, Dobhi (Gaya Bihar) to Patna (Bihar) has been based on imported concentrate. The Final Report successfully completed. has been submitted to Client. Power Sector ŠŠ Maharashtra State Power Generation Co. Limited has entrusted your company for carrying out the Third Party Delay Analysis of BTG & BOP Works of Khaperkheda Project (1x500 MW). The project has successfully been completed. ŠŠ Bokaro Power Supply Company Limited has entrusted your company for preparation of Techno-Commercial Due Diligence report for Major Repair of Boiler#1(capacity 220TPH) with a schedule of 4 months. The project has been Š successfully completed. Š Hindustan Petroleum Corporation Limited (HPCL) has entrusted your company for Š Š Damodar Valley Corporation has entrusted your Engineering & Project Management Consultancy company for carrying out RLA and Up rating (EPMC) for setting up Petroleum oil & lubricants Study for Preparation of DPR for Panchet Hydel (HSD, MS,SKO & Ethanol) depot of capacity Station Unit-1 of Capacity 40 MW. The project has 29,000 KL at Meerut ,Uttar Pradesh .The project is been successfully completed. under execution. ŠŠ NTPC SAIL Power Company Limited has entrusted your company for carrying out the Technical Audit of Coke Oven Gas Pipe System of Power Plant Boiler at NSPCL, Bhilai. The project has been successfully completed. ŠŠ Commissioning of 100kWp Hybrid solar PV plant for Jharkhand MSME tool room, Ranchi has been successfully completed. ŠŠ Commissioning of 11kV LBDS for providing auxiliary power to Turbo-blower-5 in CPP of VS P, Vizag has been successfully completed. ŠŠ Project monitoring & supervision of quality of work under RGGVY project of MPMKVVCL, Bhopal for five districts covering Betul, Datia, ŠŠ Hindustan Petroleum Corporation Limited Harda, Bhind, Moren, Raisen,Vidisha under (HPCL) has entrusted your company for 12th plan for MPMKVVCL, Bhopal has been Engineering & Project Management Consultancy successfully completed. (EPMC) services for setting up Petroleum, oil & ŠŠ 100% electrification in Dhanbad, Bokaro, lubricants depot of capacity 77,000 KL at Hissar, Ranchi, Ramgarh & Lohardaga Districts has Haryana. The project is under execution. been successfully completed. 100% House Hold connections given under SAUBHAGYA Scheme in entire Jharkhand for JBVNL under DDUGJY scheme. Oil & Gas Sector ŠŠ GAIL India Limited (GAIL) has entrusted your company for Project Management Consultancy (PMC) for Cross Country Natural Gas Pipeline Project from Phulpur (Uttar Pradesh) via Varanasi, Dobhi (Gaya Bihar), Rajgir (Silao Bihar) to Patna / Barauni (Bihar). 12 MECON MECON Limited

ŠŠ Hindustan Petroleum Corporation Limited Infrastructure Sector (HPCL) has entrusted your company for Engineering Consultancy services for Emission Controls System (VRU) at Jaipur, Palanpur, Wadala, Loni, Kolkata (Budge Budge), Chennai, Irumpanam & Vashi terminals. The project is under execution.

ŠŠ OIL India Limited, Assam has awarded your company for Engineering, Procurement, and Construction Management Consultancy (EPCM) for construction of Gas pipeline from Baghjan to ŠŠ Your company is rendering Consultancy and CGGS Madhuban, Duliajan, in Assam. The project Project Management Services for interconnection is under execution. of Iron Ore Handling Plant (IOHP) with the Mechanized Coal Handling Plant (MCHP) using ŠŠ IGL awarded 3 number CNG stations with network of conveyors and a customized stacker Equipment on RCC Canopy concept to economize machine at Paradip Port, Paradip, Odisha. The the space requirement of CNG station and to project is under execution. reduce the noise pollution etc. The Project has been delivered before time with full satisfaction of the client.

ŠŠ Ordnance Factory Board, Ministry of Defense had entrusted your company for providing consultancy services for modernization of CODs at Agra & Jabalpur. The project is under advance stage of completion.

ŠŠ India’s first L-CNG Satellite Station commissioned at Bhubaneswar for GAIL (India) Limited.

ŠŠ Your company along with its consortium partner (M/s RHDHV) has been appointed as a Design Consultant by Indian Navy for a part of phase wise expansion (Phase IIA) of their existing Naval base at Karwar (Karnataka) under “Project Seabird”. The project is under execution. 13 MECON

Your Company is serving a large number of clients in the Public and Private Sectors. Some of the major clients in Public Sector include SAIL, GAIL, NMDC, AN ISO 9001:2008 ESIC, NSPCL, JBVNL, MAHAGENCO, Ministry of ISPS COMPLIANT PORT AYUSH, ISRO, HAL, MRPL, HEC, BARC, HINCOL, APMDCL, NINL, RINL/VSP, KIOCL, HCL, NML, RINMOIL, SAILMOIL, MIDHANI, Corporation Bank, BEL, GoJ, RPTPL, PFC, HPCL, BPCL, OPTCL, UPPCL, UPRVUNL, TANGEDCO, OMDC, OMCL, MRPL, TVNL, FCRI, IPICOL, NALCO, BPSCL, NLC, NSPCL, NPCIL, WBSEB, WBPDCL, WBSEDCL, BESCOM, OHPC, CMWSSB, UCIL, BGL, APPGCL, IOCL, HPGCL, ONGC, CPCB, KPCL, VPT, KPT, PPT, GGL, IGL, BGL, TNGCL, DVC, MSTC, NHPC, NMPT, IDCOL, IREL, BARC, SBI besides Ministry of Power, Govt. of India, the State Electricity Boards in Jharkhand, West Bengal, Madhya Pradesh, Chhattisgarh, Rajasthan, Tamil Nadu, Uttaranchal, Uttar Pradesh, Odisha. Jindal Group, Bhushan Group, Tata Group, UML, ESSAR, ESSEL, KIC METALIKS, AXIS BANK, UML, ULTRATECH, MONNET, BMM, UGSL, MEL, BRPL, VEDANTA, ADHUNIK, HINDALCO, TML,

BIL, MNGL, TOPWORTH, ADANI, MSPL, IIL, SLR, INDIAN ARMY etc. are some of the major clients in the private sector. In addition to above, some of the major clients to whom your company has been rendering services during this year include Project Seabird, CCL, OMC, PFCCL, LANCO, HPCL, SHAR, Oil India, OPTCL, Assam State Housing Board, IOCL, HPCL, BPCL, NALCO, NLC, ECL, UCIL, NPCIL, JSW, Petronet MHB, KIC Metaliks, JSPL, Brila Copper, Electrosteel, etc. The Company is also providing services to Defence Sector.

ETA - ZUMA GROUP

Business procurement in the area of Engineering Consultancy & PMC services was ₹ 533.27 Crore in previous year and ₹ 359.63 Crore during this financial year. In Supply / Turnkey projects it was ₹ 470.17 Crore in previous year and ₹ 2832.12 Crore during this year. 14 MECON MECON Limited

2.0 BUSINESS DIVERSIFICATION

Diversification is an ongoing phenomena in business SBU wise Business Procured planning of any vibrant business organization and at (Consultancy) MECON too, it is pursued earnestly inface of technical 29% 51% challenges it comes across every day. Our strategic diversification has attained maturity as our Oil & Gas business has made international debut with executing oil pipe line project in Bangladesh. We have been making foray into strategic mining and processing areas like Uranium mining and processing thereof for clients 20% like UCIL. We have also found new business in Port Metal Energy Infastructure and material handling area, Flue Gas desulphurization in Thermal Power Plant, fire and safety management and Energy Efficiency areas which is bound to grow with growing concern for Environment and safety in 3.0 MANAGEMENT INITIATIVES society and Government. Management is continuing its focus on strengthening During this fiscal year, business procurement from the potentially high growth areas by deploying the Metal sector has been significant which is clearly additional resources and widening the global reflected in overall order booking in Metal sector outreach of the company through participation of (94.48%) outweighing the order booking in Non-Metal employees in international technical and trade events. sector (5.52%). In Engineering and Consultancy, the Concerted efforts are being made for supplementing Company’s order booking is 49% (previous year 61.75%) the knowledge/ technology gaps through MoUs with in Non-Metal sectors and 51% (previous year 38.25%) global leaders in respective fields and squeezing out in Metal sector. In case of supply / turnkey projects, it opportunities trickling from the traditional business is 0% (previous year 99.49%) in the diversified sectors areas. and 100% (previous year 0.51%) in Metal sector. 4.0 MOU WITH MINISTRY OF STEEL ON PERFORMANCE Like in the previous years, your Company has signed a Business Procured (Consultancy) MoU with the Ministry of Steel for the F.Y. 2018-19 and Metal Non-Metal 500 is expected to achieve “Fair” rating. 400 5.0 ISO 9001:2015 CERTIFICATION 300 Recently, your Company has successfully migrated 200 in ` crore to ISO 9001:2015 Standards from ISO 9001:2008 100 standards. The certificate has been awarded by M/s TÜV 0 NORD. The scope of Company’s certification includes 2014-15 2015-16 2016-17 2017-18 2018-19 Consultancy, Design & Engineering, Procurement of Plant & Equipment, Inspection, Construction & Project Management Services and Erection of Turnkey Projects. The surveillance audit by TÜV has been conducted during November – December 2018 and Company’s QMS has been certified for ISO 9001:2015 Business Procured (Supply) and validated upto 29.01.2021. Metal Non-Metal 6.0 INDIAN ASSIGNMENTS 3000 2500 Your company has procured following major work 2000 orders during 2018-19: 1500

in ` crore 1000 Metals Sector 500 ŠŠ Executing Agency for Development of Mosabani 0 2014-15 2015-16 2016-17 2017-18 2018-19 Uranium Recovery Plant (MURP) & Development of Rohil Uranium Project for Uranium Corporation of India Ltd., Jaduguda. 15 MECON

ŠŠ Centralised Procurement services for procurement Rebar Mill & Power Plant for the proposed of spares, consumables and services for existing Expansion Project of Aloke Steels Industries Pvt. Mines and Plants of Uranium Corporation of Ltd., Ramgarh. India Ltd., Jaduguda. ŠŠ Engineering, Procurement and Construction ŠŠ Detailed Engineering & Consultancy services (EPC) services for installation of an Alternate for enhancement of Steel Plant Capacity from 13 Coke Oven Gas Fuel Main for COB#10 at SAIL/ Mtpa to 18 Mtpa for JSW Vijayanagar Works for IISCO Steel Plant, Burnpur. JSW Steel Ltd., Mumbai. ŠŠ Preparation of Detailed Project Report (DPR) and ŠŠ Deployment of Manpower against the requirement selection of Mine Developer cum Operator (MDO) of NALCO in Construction, Commissioning and for Utkal-D&E in NALCO at Angul, Odisha for Operation of Existing, Brownfield, Greenfield National Aluminium Co. Ltd., Bhubaneswar. Projects of National Aluminium Co. Ltd., ŠŠ Detailed Engineering & Consultancy services for Bhubaneswar. Expansion Project (CAL) at Vasind for JSW Steel ŠŠ Detailed Engineering & Consultancy services for Coated Products Ltd., Maharashtra. 30 Mtpa Iron Ore Slurry Pipeline, Odisha Project ŠŠ Change Order for providing Engineering, for JSW Steel Ltd., Mumbai. Procurement and Construction (EPC) services for ŠŠ Amendment to Contract for providing Repair of Concrete Nozzle Deck (Rebuilding of Engineering, Procurement and Construction COB # 8) for SAIL/Bokaro Steel Plant, Bokaro. (EPC) services for Establishment of Structural ŠŠ Detailed Engineering & Consultancy services for & Mechanical Systems of Integrated Engine Test Augmentation job of SMS-II for SAIL/Rourkela Facility for ISRO Propulsion Complex (IPRC), Steel Plant, Rourkela. Mahendragiri, Tamil Nadu. ŠŠ Detailed Engineering & Consultancy services ŠŠ Detailed Engineering & Consultancy services for for integration of Secondary De-dusting System Heat Size Enhancement from 130 MT to 160 MT of Converter#3 with Converter#1&2 of SMS-II of SMS#1 at JSW Steel Vijayanagar Works for JSW Complex of SAIL/Rourkela Steel Plant, Rourkela. Steel Ltd., Mumbai. ŠŠ Detailed Engineering & Consultancy services ŠŠ Consultancy services for implementation of Zero for modification in Coke Screening Building and Liquid Discharge (ZLD) at SAIL/Rourkela Steel Stock House of BF-1 of JSW Steel Ltd., Dolvi. Plant, Rourkela. ŠŠ Consultancy Services for getting Statutory ŠŠ Engineering, Procurement and Construction Clearance (EC from MoEFCC and NOC from (EPC) services for Manufacture, Testing, Supply, SPCB) for expansion cum modernisation of SAIL/ Installation & Commissioning of Bowl Cleaning Bokaro Steel Plant, Bokaro. Machine (BCM) at Sriharikota for Indian Space Research Organisation, Sriharikota. ŠŠ Preparation of EIA/EMP report for VSP’s Capacity Expansion Project of 6.3 Mtpa to 7.3 ŠŠ Additional work for providing Detailed Mtpa for RINL/Visakhapatnam Steel Plant, Engineering & Consultancy services for Expansion Visakhapatnam. Project of SAIL/Rourkela Steel Plant, Rourkela. ŠŠ Preparation of Feasibility Report (FR) for entire ŠŠ Detailed Engineering & Consultancy services for Block of Parbatpur Central Coal Mine for SAIL/ Pellet Plant # 3 Project at Vijayanagar Works of Collieries Division. JSW Steel Ltd. ŠŠ Detailed Engineering & Consultancy services ŠŠ Consultancy services for Augmentation of for New LHF-5 at SMS#2 for JSW Steel Ltd., existing Coal Chemicals Plant as an additional Toranagallu. work to the Contract for “installation of COB # 5 alongwith by-product plant and other associated ŠŠ Engineering services for Steel Plant Layout - Plan, facilities” for RINL/Visakhapatnam Steel Plant, Elevation & Cross Section for proposed 6.0 Mtpa Visakhapatnam. Integrated Steel Plant at Bellary for Uttam Galva Ferrous Ltd., Mumbai. ŠŠ Preparation of Techno-Economic Feasibility Report (TEFR) & providing Detailed Engineering ŠŠ Detailed Engineering & Consultancy services & Consultancy services for Induction Furnace, for modification in Water Treatment Plant for 16 MECON MECON Limited

Production Enhancement in HSM-I at Vijayanagar ŠŠ Pre-dispatch inspection of Ladles and Converter Works for JSW Steel Ltd., Toranagallu. sets from China for SAIL/IISCO Steel Plant, Burnpur. ŠŠ Preparation of EIA/EMP report for expansion of JSW Steel from 16 to 18 Mtpa at Bellary for JSW ŠŠ Preparation of Study Report on Odisha Vision Steel Ltd., Bellary. 2030: Development of Downstream & Ancillary Units in Metal Sectors for IPICOL, Bhubaneswar. ŠŠ Preparation of Viability Study report for Capacity Augmentation of SMS-I of BPSL Plant at ŠŠ Preparation of Detailed Project Report (DPR) for Jharsuguda, Odisha for JSW Steel Ltd., Mumbai. setting-up of Forward and Backward Integration Projects to the Blast Furnace Unit, Mangalore for Š Š Preparation of TEV & Asset Evaluation report KIOCL Ltd., Bangalore. along with TEFR for 1.0 Mtpa Integrated Steel Plant at Hospet for MSPL Ltd. ŠŠ Preparation of Detailed Project Report (DPR) for setting up of a 2.0 Mtpa Pellet Plant at RINL ŠŠ Consultancy services for Process Water Premises, Visakhapatnam for KIOCL Ltd., Optimization and Water Efficiency Audit for Bangalore. Rajpura Dariba Complex and Debari Zinc Smelter Š Complex for Hindustan Zinc Ltd., Udaipur. Š Preparation of Feasibility Report (FR) for Chasnalla West Quarry for Optimum Extraction ŠŠ Preparation of Techno-Economic Feasibility of Coal Reserves by Open Cast for SAIL/Collieries Report (TEFR) for Pellet Plant-3 and Coke Oven Division. Battery # 5 of JSW Steel Ltd., Toranagallu. Energy Sector ŠŠ Preparation of Detailed Feasibility Report (DFR) ŠŠ Additional work for providing Engineering for 240 KTPA Zinc Smelter Complex at Rajpura & Project Management Consultancy (EPMC) Dariba Mine for Hindustan Zinc Ltd., Udaipur. services for Replacement of Pipelines of Gujarat ŠŠ Preparation of Detailed Feasibility Report (DFR) Region and Cauvery Basin Area Pipeline for GAIL for 250 KTPA Zinc Smelter Complex at Debari for (India) Ltd., Noida. Hindustan Zinc Ltd., Udaipur. ŠŠ Engineering & Project Management Consultancy ŠŠ Detailed Engineering & Consultancy services for (EPMC) services for Vadodara CGD Projects for improvement of BF Gas Network of Gerdau Steel Vadodara Gas Ltd., Gujarat. India Pvt. Ltd., Bangalore. ŠŠ Preparation of RLA & Uprating study for ŠŠ Preparation of Techno-Economic Feasibility preparation of Detailed Project Report (DPR) for Report (TEFR) for Augmentation / setting-up of Panchet Hydel Station Unit-1 of Capacity 40 MW additional facilities for 13 MT Expansion of JSW for Damodar Valley Corporation, Kolkata. Steel Ltd., Toranagallu. ŠŠ Consultancy services for Warehouse Management, ŠŠ Detailed Engineering & Consultancy services for Project Management, Engineering and other implementation of Independent Slag Granulation services for Lube Field Paharpur, Kolkata of System in BF#1 Complex of JSW Steel Ltd., Indian Oil Corporation Ltd., Mumbai. Toranagallu. ŠŠ Preparation of Market Survey report and Detailed ŠŠ Preparation of TEV & Asset Evaluation report Feasibility Report (DFR) for Development of City along with TEFR for 1.0 Mtpa Integrated Steel Gas Distribution Network in Five GA’s for GAIL Plant at Hospet based on in-house data (Stage-1) Gas Ltd., Noida. for MSPL Ltd., Hospet ŠŠ Engineering & Project Management Consultancy ŠŠ Preparation of TEV & Asset Evaluation report (EPMC) services at Dibiyapur Compressor Station along with TEFR for 1.0 Mtpa Integrated Steel for Fire Water Revamping Project for GAIL Plant at Hospet as per actual site condition after (India) Ltd., Noida physical data verification (Stage-2) for MSPL Ltd., ŠŠ Consultancy services for Augmentation of 132 Hospet. KV MRS Sub-station of Hindustan Copper Ltd., Malanjkhand. ŠŠ Preparation of Asset Valuation & Techno Viability Study of Steel Plant and Mines for Neelachal Ispat ŠŠ Consultancy services for various O&M related jobs Nigam Ltd., Duburi. under GAIL NCR for GAIL (India) Ltd., Noida. 17 MECON

ŠŠ Consultancy Services for Tendering of various Development Corporation Ltd., New Delhi. Procurement Packages / Services involved in City ŠŠ Project Management Consultancy (PMC) services Gas Distribution on ARC Basis for Sabarmati Gas for Bharatnet Project Phase-II in Jharkhand for Ltd., Gandhinagar. Jharkhand Communication Network Ltd., ŠŠ Additional work for providing Detailed Ranchi. Engineering & Consultancy services for ŠŠ Consultancy & PMC Services for installation of modernisation of IOCL’s Lube Blending Plant at suitable Fugitive Dust Pollution Control System Paharpur, Kolkata for Indian Oil Corporation along roads inside Paradip Port Trust, Odisha. Ltd., Kolkata. ŠŠ Master Consultant for the work of upcoming ŠŠ Preparation of Detailed Feasibility Report (DFR) 50 MLD Desalination Plant at Dahej, Bharuch, for Development of New Bitumen & Base Oil Gujarat for Gujarat Industrial Development Terminal at Mumbai Refinery area for Bharat Corporation, Bharuch. Petroleum Corporation. Ltd., Mumbai. ŠŠ Additional work for providing Project ŠŠ Additional work for providing Engineering, Management Consultancy (PMC) services to Procurement and Construction Management execute Payload Fabrication & Testing Facility (EPCM) services for Pet Coke silos for Trucks & (PFTF) Building at 39 Acres New SAC Campus Wagon Loading along with associated Conveying at Bopal, Ahmedabad for Indian Space Research System, Covered Shed for Sulphur Yard and Organisation, Ahmedabad. DCU Coke Pit for Mangalore Refinery & Petrochemicals Ltd., Mangalore. ŠŠ Design, Engineering & PMC Services for Construction of 2nd RCC Bridge over the ŠŠ Additional work for providing Engineering, Atharabanki Creek near Gate No. 2 for Paradip Procurement and Construction Management Port Trust, Odisha. (EPCM) services for Construction of MS, HSD, ATF Day Tanks Loading Facilities, Truck Parking ŠŠ Preparation of Detailed Feasibility Report (DFR) Terminal (Marketing Terminal) and Flare Gas for Alternate Water Supply from Muvattupuzha Recovery System (FGRS) for Mangalore Refinery River for BPCL Kochi Refinery for Bharat & Petrochemicals Ltd., Mangalore. Petroleum Corporation Ltd. ŠŠ Preparation of Detailed Feasibility Report (DFR) ŠŠ Engineering & Project Management Consultancy for Nellore to Kakinada Natural Gas Pipeline for (EPMC) services for Construction of Office Indian Molasses Company. Building at Sonepat for GAIL Gas Ltd. ŠŠ Preparation of Pre-Feasibility Report for 10 nos. of ŠŠ Preparation of Feasibility Report (FR) for Coal GAs for the purpose of participation in 10th round Transportation system between Gidhmuri-Paturia of Bidding by PNGRB for GAIL Gas Ltd. Coal Mine to Prem Nagar TPP at Dist. Surajpur for Chhattisgarh State Power Generation Co. ŠŠ Preparation of Feasibility Report (FR) to adhere to Ltd., Raipur. MoEF norms for Flue Gas Emission and Specific Water Consumption limits in Power Plant for 7.0 FOREIGN ASSIGNMENTS Bokaro Power Supply Co. (P) Ltd., Bokaro. Overseas assignment bagged by your company is ŠŠ Extension of Contract for providing Consultancy highlighted below: services for installation of 300 Tph Boiler & 30 ŠŠ Detailed Engineering & Design for transportation MW BPTG Project of Bokaro Power Supply Co. of White Oil Petroleum through Pipeline from (P) Ltd., Bokaro. Chattogram to Dhaka, Bangladesh for Auleek ŠŠ Additional work for providing Detailed Services & Oncosys International JV, Dhaka, Engineering & Consultancy services for Coal based Bangladesh. Thermal Power Plant (1x250 MW) at Rourkela for ŠŠ Preparation of Feasibility Study report for NTPC-SAIL Power Company Ltd., New Delhi. extension of Iron Ore Storage Yard for Bahrain Infrastructure Sector / Other Engineering Steel BSCC E.C., Bahrain. 8.0 FUTURE BUSINESS VISION ŠŠ Project Management Consultancy (PMC) services for Redevelopment/ Development of The Global Steel outlook seems to be positive with Railway Stations for Indian Railway Stations all regions – NAFTA, EU, CIS, AFRICA, Middle 18 MECON MECON Limited

East, ASIA & OCEANIA expecting a positive growth despite a tense Global trade scenario. The short Turnover range outlook of WSA corroborates it with a healthy 500 2.9% and 4.6% growth projection for developing 400 e r 7 o Economies (excluding China). A stable Govt. and vast 300 7 1 r 5 . . 3 C 8 0 5 9 ` 2

. opportunities in infrastructure coupled with Govt. 7 . 200 4 n 2 4 7 i 4 4 1

resolve for betterment of country’s infrastructure would 3 100 3 keep the growth wheel moving. Nevertheless, the Oil 0 & Gas sector opportunities are expected to keep the 2015-16 2016-17 2017-18 2018-19 momentum going whereas Mining & Mineral sectors, Year Energy Efficiency, Flue Gas desulphurization etc. are the new avenues your company is looking at with great interest. Your company is in the process of forging new 10.0 DIVIDEND business alliances with global leaders which would Considering the financial position, CAPEX, future further leg up our efforts to enter into new business business expansion needs, etc., Board has not areas as well as strengthen our positioning in the recommended dividend on Equity Share Capital for existing market. We stand committed to our business the Financial Year 2018-19. vision of consolidating our presence in the traditional business domain while keep scratching the ground for 10.1 CUMULATIVE DIVIDEND & TAX PAID virgin opportunities thrown open by economy – both Your company which had paid up capital of ₹4,013.84 domestic as well as global. lakh (previous year ₹4,013.84 lakh) including Bonus 9.0 FINANCIAL RESULTS Shares worth ₹40.31 lakh, has paid cumulative dividend including tax (Equity & Preference) of ₹7,863.78 lakh The extract of Annual Return for the period under till 2017-18 and have not recommended dividend review, is annexed as Appendix- I. on Equity Share Capital for 2018-19. The cumulative The financial highlight for the period under review is income tax to the exchequer amounting to ₹37,998.33 as under: lakh has been paid / provided till 2018-19.

(₹ In Lakh) 11.0 EARNING PER EMPLOYEE Particulars 2017-18 2018-19 Operating Turnover per employee per year is as follows: 9.1 Material changes and commitment, if any, affecting OPERATING TURNOVER PER EMPLOYEE the financial position which 30 has occurred between the end NIL NIL 25

of financial year to which the h 20 k a

financial statements relate and L 15 27.66 ` the date of the report. 23.46 n 10 I 15.99 9.2 The amount, if any which is 5 11.35 proposed to carry to any reserve. 0 Opening Balance 10,634.02 16,570.23 2015-16 2016-17 2017-18 2018-19 Addition during the year 5,802.33 1,374.01 Year Adjustment due to implementation of Ind AS - 13,485.57 12.0 RESEARCH & DEVELOPMENT Utilised / Reversed during the year 133.88 (1397.70) Commitments to R&D are essential in the present Closing Balance 16,570.23 30,032.11 Indian scenario. Make in India focus is one of the 9.3 Particulars of loans, guarantees key areas on which our laboratories and research or investments under Section 519.52 # 519.52 # institutions are working by identifying the problems 186 of the Companies Act, 2013 and solving them with technology. R&D plays an 9.4 Particulars of contracts or important role in augmenting the capabilities of the arrangements with related party company through innovations in ideas, designs etc. referred under section 188(1) Nil Nil which can be a source of potential values, when it in Form AOC-2. (Enclosed as comes to gaining competitive advantages. Innovation Annexure- A) results in high quality jobs, successful business, better (#) Represents the investment (Gross) made by the goods and services and more efficient process. R&D of company. your Company mostly undertakes Applied Research 19 MECON

and Experimental Development in the core area of Over the years, your company has suggested a number business such as Iron and Steel as well as focused areas of established energy saving measures / technologies to of national importance such as Defence, Environment various steel plants projects in India, resulting in saving etc. In recent years, not only your Company carries in scarce, high priced coking coal, saving in import out self sponsored research works but also collaborates of coking coal and resultant reduction in production with various external funding agencies such as DRDO, costs. In addition to these measures, the company DST, Ministry of Environment, Ministry of Steel etc has suggested few more energy saving measures / for research activities. Collaborative efforts in R&D technologies in various area of steel production, during with academic institutions and Industrial house are 2018-19, which are summarised below: undertaken to strengthen the research potential and Coke Making Plant application domain. ¾¾ Machine based Hydro-jet door cleaning Considering the Government of India’s initiative of system adopted in VSP COB # 5 will conserve promoting innovative culture in CPSEs, your Company energy by less machine travel time as well as has setup an Innovation Cell which comprises of less pollution through doors which results in members from technological departments and R&D. prevention of energy rich raw coke oven gas The scope of Innovation Cell is to establish innovative leakage. technology and business process re-engineering ideas with significant business potential, social relevance and ¾¾ Adoption of VVVF drive for Raw Gas focus on environment protection. The objective behind Exhauster in BPP plant of VSP COB # 5 for setting up of the Cell is to translate the innovative ideas saving electrical power. into a viable technology through collaborative effort 13.2 Technology Absorption with external institutions. The detailed information on efforts made and benefits The R&D of your Company is recognised by the derived like products improvement, cost reduction, Department of Scientific & Industrial Research (DSIR), product development or import substitution from Government of India and the recognisition is valid technology absorption along with technology imported for three years upto 31.03.2019. The application for and expenditure incurred on R&D as per Section renewal of recognisition has already applied for. 134(3) of the Companies Act, 2013 read with Rule 8 Till 31.03.2019, your Company has filed 11 patent of Companies (Accounts) Rules 2014 is enclosed at applications with Indian Patent Office which are Annexure-I to this Report. pending at different levels. 14.0 FOREIGN EXCHANGE EARNINGS AND Projects Completed OUTGO Development of Torpedo Ladle Car monitoring Your Company has earned ₹462.38 lakh Foreign system using Infrared Imaging. Exchange during the year 2018-19. The expenditure in Foreign Exchange remitted / actually spent during the With the intent of reducing failures in Torpedo ladles year is ₹275.33 lakh as per details given below. and increasing its average life, your Company initiated the project which has been successfully implemented Particulars (₹ in Lakh) at RSP, Rourkela. The project is funded by the Ministry Professional & Consultation Fees 143.27 of Steel. Other matters 132.26 Patents Sealed: Total 275.33 Your Company has been granted 1 (one) patent rights 15.0 HUMAN RESOURCE DEVELOPMENT in the field of Basic Oxygen Furnace (BOF) during the year under review. In a knowledge-based organization, Services, Processes and Business Models can be copied, but to have 13.0 CONSERVATION OF ENERGY AND competitive advantage, the organizational competence TECHNOLOGY ABSORPTION i.e. the Human Capital needs to be unique in nature. In your Company, developing and sustaining a competent 13.1 Conservation of Energy and highly responsive workforce with adequate domain Efforts are being undertaken to change Steel plant expertise, by constantly upgrading their knowledge and configuration by eliminating energy intensive outdated skills has always been Management’s topmost priority. technologies and introducing state of the art energy Focus is laid on acquiring new skills and sharpening efficient technologies in iron and steel plants. existing ones, which leads to better performance, 20 MECON MECON Limited

increases productivity and evolves our employees as employees. Liaison with other associated external better leaders. agencies was also maintained cordially and on regular basis. To transform our company into a learning organization and encourage a culture of continual development 18.0 ACTIVITIES / STEPS TAKEN FOR THE amongst employees, apart from conducting regular WELFARE OF SC / STs IN THE COMPANY. trainings on technical, skill related and soft skill, In addition to its corporate and business objectives, based on Training Need Analysis and Organizational the Company is fully aware of its social responsibilities Requirement, more focus was laid upon latest for development and welfare of members of Scheduled Technological Advancements and developing Caste / Scheduled Tribe Communities. The strength Leadership Effectiveness. Moreover, various and number of SC / ST candidates presently employed Knowledge Sharing sessions have been conducted in your Company are indicated below: through concerned domain experts. Management has achieved 1556 Man days of training and development Cat./ Man- SC ST PWD (Technology – 598 Mandays, Skill related – 557 Man Group power No % No % No % days and Soft Skill – 401 Man days) as against the target as on of 1300 Man days fixed for the financial year. 31st Apart from this, to facilitate holistic development and March, increase productivity, employee engagement activities 2019 such as Health Awareness Programs, Quiz competitions, A 1131 225 19.89 68 6.10 6 0.53 Debate competitions, Retirement Planning, etc., were B 56 7 12.50 23 41.07 0 0 organized on regular basis. C 97 17 17.53 44 45.36 5 5.15 16.0 PERSONNEL & WELFARE Total 1284 249 19.39 131 10.51 11 0.86 Employees strength of your Company at the end of the The Company has adopted adequate measures for year i.e., as on 31.03.2019 was 1284. Out of the total safeguarding their interests and welfare, such as strength of 1284, 249 belong to SC, 135 belong the promotion as per general trend, power regard for ST categories & 11 belong to PWD category. Out of human rights, equality and impartiality in all spheres the total strength of 1284 employees, 127 are female of activities and providing abundant opportunities for employees. self development through sports, cultural, educational 16.1 Sexual Harassment of women at workplace and recreational facilities. Scheduled Caste / Scheduled (Prevention, Protection and Redressal Act, Tribe employees and their families residing in Shyamali 2013) Township enjoy all the facilities as available to others. In order to implement the Government of India Directives Number of Cases Number of cases and Post-based Rosters with regard to recruitment filed disposed. and promotion of SCs/ STs , and SC/ST Cell has been Nil Nil formed with Deputy General Manager I/c (Personnel) as Liaison Officer. The SC/ST Cell maintains proper 16.2 As per DPE Guidelines, Women in Public Sector record regarding recruitment and promotion and (WIPS) Cell was established in your company statistics of SC/ST employees and furnishes reports to in November, 2015 for development of women the Ministry of Steel on regular basis. The Company employees and for promoting their interactions has made consistent efforts to accommodate SC/ST with women employees of other public sector candidates in all recruitments in MECON as well as in units. promotion to the next higher grade as per Government 17.0 INDUSTRIAL RELATIONS directive. The Company focused on employee relationship and All possible steps are taken to fill up the post in reserved all employee related matters were addressed leading category as per Government Directives issued from to greater satisfaction of the employees. The work time to time. atmosphere remained healthy and harmonious and 19.0 CORPORATE SOCIAL RESPONSIBILITY this helped the Company to achieve better productivity. AND SUSTAINABILITY DEVELOPMENT The Company continued to have peaceful and cordial (CSR&SD) relations with the employees and most of the issues were resolved through interactions and dialogue with As provided under Section 135 read with Schedule – the representatives of Non-Executive and Executive VII to the Companies Act, 2013 your Company has 21 MECON

carried out CSR activities, mainly focused on Sanitation this occasion all employees took a pledge (Swachh Bharat Abhiyan), Healthcare, Drinking Water, to increase use of Hindi in their day to day Education, Skill development & Livelihood, Rural official work. During the “Hindi Pakhwara” development, etc. out of carried over fund from FY competitions of various nature were also 2017-18 and fund allocated for FY 2018-19. The details organized at Head Office and other offices are enclosed vide Appendix – II. of the Company. A special Hindi workshop and a Rajbhasha symposium on “Unicode ke 20.0 OFFICIAL LANGUAGE POLICY (USE OF jariye Hindi me Kam-Kaj” were also organised RAJBHASHA) during the Hindi Pakhwara. Your Company is effectively implementing the Official ¾¾ Organised “Hashya Kavi Sammelan” at Head Language Policy of Govt. of India in its official work. It office. is also making all out efforts to achieve the targets fixed in the Annual Programme issued by Rajbhasha Vibhag, ¾¾ Organised “Three-days Natkotsab” at Head Ministry of Home Affairs, Govt. of India. For this office. purpose, there is an Official Language Implementation Committee under the Chairmanship of CMD. Hindi ¾¾ “Noting & Drafting” Competition was also th workshops are being organised regularly for the organised on 27 February, 2019 on TOLIC employees. Your Company is an important member of level. In the competition participants from all Town Official Language Implementation Committee TOLIC members (PSU) , Ranchi took part. (TOLIC), Ranchi and actively participates in all the ¾¾ Obligatory Hindi Training for Non-Hindi programmes. speaking personnel of the company was Joint Director (Rajbhasha), Ministry of Steel, Govt. organised from January-May, 2019 (Session) of India inspected the progressive use of Hindi at our covering Prabodh, Praveen & Pragya classess Head Office, Ranchi on 11th May, 2018. The Dy. Director which was attended by 10 employees. (Rajbhasha), Home Ministry, Govt. of India inspected 21.0 VIGILANCE ACTIVITIES the progressive use of Hindi in our Delhi Office on 10th October, 2018. The Vigilance set up of the Company is functioning under Shri Upkar Kumar Kedia, ITS, CVO (Full Time) Rajbhasha Vibhag of the Company had organised who took charge on 30.10.2017. CVO of the Company following events during 2018-19. provides a link between the organization and the ¾¾ Inhouse Hindi Natak was organised on 7th Administrative Ministry, CVC and CBI and also acts as July, 2018 in our Community Hall. a special assistant/ advisor to CMD and reports directly to him in all matters pertaining to vigilance. ¾¾ All India Rajbhasha symposium was organised on 7th September, 2018 at our Head Office, Efforts are on to continuously enhance transparency Ranchi. It has two sessions, the theme of first in various business activities of the company with sessions was “Make in India : The role of PSU’s use of computerization and leveraging of technology. of Ministry of Steel” and the theme of Second Emphasis is laid on preventive vigilance, spreading Sessions was “The Role of Rajbhasha Hindi in awareness, surveillance and analysis of systems & respect of World seneriao”. In this symposium procedures in detail to ensure optimum utilization of Sri Anand Kumar, Joint Director (Rajbhasha), resources, appropriate & timely decisions, corrective Ms. Astha Jain, Assistant Director (Rajbhasha), action against defaulters and transparency & Ministry of Steel, Govt. of India & Sri Prabhat accountability in the system. In this direction relevant Verma and Dr. Vikas Dave, Member of Hindi circulars and guidelines from CVC and statutory Advisiory Committee, Ministry of Steel, Govt. authorities, as and when issued, are put in the in-house of India were present as a Special Guest. In this intranet ‘meconinfo’ for wider circulation among the symposia many delegates also participated employees. Vigilance articles are also published in the from different PSU’s under Ministry of Steel in-house publications whenever possible. like RINL, NMDC, SAIL, Ferro Scrap Ltd., MSTC etc. Complaints, as and when received, are investigated promptly by Vigilance Department after checking their ¾¾ “Hindi Pakhwara” was observed at Head veracity wherever needed. Sensitive sections/ areas Office as well as in all the site offices of the in the organization have been identified and thrust company from 14.09.2018 to 28.09.2018. On is laid on conducting surprise inspections, regular 22 MECON MECON Limited

inspections, scrutiny of files & studies in these areas and on Company’s website with a provision of lodging suitable suggestions including job rotation are given for complaint online which is accessible to common improvement in the system to eliminate discrepancies individuals. Contact Details of CVO and Senior Officials found, if any. A number of suggestions given by of Vigilance department, Organizational Structure of Vigilance Department for systemic improvement Department, Vigilance Quality Policy of the Company, and streamlining various procedures have been ISO Certificate of Vigilance Department, Handbook implemented and the process is continuing. of CVC Circulars & Guidelines, Resolution on Public Interest Disclosures & Protection of Informer (PIDPI), Online Vigilance Clearance System for the purpose Integrity Pact have been uploaded in the Vigilance tab of vigilance clearance/ status of employees in case of available on the Company’s website. Whistle Blower promotion, resignation, retirement etc. exists and Policy, Fraud Prevention Policy and RTI Manual Vigilance Department maintains a computerized have been uploaded on Company’s website www. database. Submission of Annual Property Returns has meconlimited.co.in. been made online in the Company and APRs for the year 2018 have been submitted by the employees and its Your company is pleased to share with you that online database is maintained and is continuously scrutinized Bill Watch System has been combined with Company’s and monitored. GST system (MecGST) w.e.f. 01.09.2018 to enable display of status of payments of vendor’s/ supplier’s Integrity Pact (IP) is functional in your Company since bills/ invoices more effectively and avoiding duplication 2007 under an Independent External Monitor who is of data entry for two different systems. It would also responsible for overseeing the process of procurement ensure compliance with recent instructions from CVC and transactions where Integrity Pacts are signed on monitoring & release of payments to vendors/ between your Company and counterparties. Your suppliers/ contractors. Company enters into Integrity Pact with vendors/ suppliers/ contractors for orders of one crore & above Your Company is pleased to inform you that Vigilance for EPC Projects and for orders of ₹ 25.0 lakh & above Department follows a well-established Quality for Town Administration and In-house Procurement. Management System (ISO 9001:2008) which has been The draft IP forms part of tender documents, wherever certified by TUV India Pvt. Ltd. (a subsidiary of TUV applicable. Till March 2019, your Company has signed NORD CERT Gmbh, Germany) and the department is Integrity Pact (IP) with 196 suppliers/ contractors. So in the advance stages for meeting the requirements to get upgraded to ISO 9001:2015 certification. far no representation/ complaints/ disputes have been received in the matters of tenders and contracts under 22.0 DEVELOPMENT AND IMPLEMENTATION I P. OF RISK MANAGEMENT. Vigilance Awareness Week-2018 was observed at The Company has a Risk Management Policy Company’s Head Office, Ranchi and at various Site with the objective of managing the potential risks Offices i.e. Delhi, Bangalore, Bhilai, Burnpur, Durgapur, and reducing the risk exposure in the long run by Kolkata, Visakhapatnam, Nagarnar (Chhattisgarh), continual identification, assessment / monitoring Rourkela from 29th October to 3rd November 2018 and management of risks associated with its overall in which the employees & students participated with business processes and operations. enthusiasm. As part of outreach activities awareness programmes in various forms were conducted in The Company’s risk management framework several schools & colleges located in these places encompasses all areas of operation including technical, in course of observance of VAW-2018. The theme marketing, contracts, financial and human resources. for observing Vigilance Awareness Week 2018 was Management is accountable to the Board for effective “Eradicate Corruption – Build a New India”. implementation of risk management strategies in all relevant areas of company operations. For this purpose, Program such as talks, interactive sessions, presentation, periodic reviews are held both at the operational levels essay competition, poster and painting competition, and at the corporate level to identify and prepare vigilance walk, were also organized in these offices/ action plans to address any new risk or harness new Institutions across the country for sensitizing opportunities that have arisen or likely to emerge employees & participants against corruption. Panel and also to prevent / eliminate the instances of non- discussions were also organized on topics of sensitive compliance with laws & regulations. areas of working. The Company’s risk management and control systems Complaint Handling Policy has been uploaded provide a reasonable assurance towards the realization 23 MECON

of strategic objectives of the organization. During 26.0 CORPORATE GOVERNANCE the year under review there was no such potential risk which could have threatened the existence of the The company has complied with the requirements of Company. However, in view of the ever increasing Corporate Governance Guidelines issued by Govt. of complexities of business models and market dynamics, India. The detail in this regard forming part of this your company is in the process of upgrading the Risk report is enclosed vide Annexure-III. Management framework. 27.0 AUDITORS 23.0 RIGHT TO INFORMATION M/s. V. Rohatgi & Co, Chartered Accountants, was appointed as the Statutory Auditors for the financial In line with the directives of the Government of year 2018-19 by the Comptroller & Auditor General of India, your Company has implemented the Right India (C&AG). They have also been assigned to carry to Information Act, 2005 from the date of its out the audit under Section 44AB of the Income Tax implementation. All relevant manuals pertaining to Act, 1961 for the financial year 2018-19. RTI Act, 2005 have been hoisted on the Company’s website www.meconlimited.co.in w.e.f 19.09.2005 28.0 DIRECTOR’S RESPONSIBILITY STATEMENT and are timely updated. A Public Information Officer Pursuant to the requirement under Section 134 (5) of (PIO) has been nominated by the Management at its the Companies Act, 2013 with respect to Director’s Headquarters and various Asst. Public Information Responsibility Statement, it is hereby confirmed that: Officers (APIO) have been nominated at Head Office as well as various Regional and Site offices of the i) In the preparation of the annual accounts for Company. The queries coming to the Company from the financial year ended 31st March, 2019, the the public are being attended to by these nominated applicable accounting standards had been officials and replied back to the applicant by the Public followed along with proper explanation relating Information Officer within the stipulated time period. to material departures;

All quarterly and annual returns are timely e-filed with ii) The Directors had selected such accounting the Statutory Authorities. policies and applied them consistently and made judgments and estimates that are reasonable 24.0 CHANGES IN BOARD OF DIRECTORS and prudent so as to give a true and fair view of DURING F.Y 2018-19. the state of affairs of the Company at the end of the financial year and of the profit or loss of the Shri R. H. Juneja was appointed as Director (Finance) Company for that period; w.e.f.20.04.2018. iii) The Directors had taken proper and sufficient Shri Sunil Barthwal, IAS who was appointed as care for the maintenance of adequate accounting Government Director on 11.10.2017 ceased to be the records in accordance with the provisions of director of the Company w.e.f. 24.05.2018. the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and Shri T. Srinivas was appointed as Government Director detecting fraud and other irregularities;. on 24.05.2017 ceased to the director of the Company iv) The Directors had prepared the annual accounts w.e.f. 16.07.2018. for the financial year 2018-19 on a going concern Smt. Rasika Chaube, Additional Secretary, Ministry basis; and of Steel was appointed as Government Director w.e.f. v) The Directors had devised proper systems 16.07.2018. to ensure compliance with the provisions of all applicable laws and that such system were Shri Deepak Krishan was appointed as Part- time adequate and operating effectively. Independent Director w.e.f. 14.12.2018. 29.0 INDEPENDENT DIRECTOR DECLARATION 25.0 MANAGEMENT DISCUSSION & ANALYSIS REPORT In terms of Section 149(7) of the Companies Act, 2013, necessary declaration have been given by Part- The Management Discussion & Analysis Report time Independent Directors stating that they meet the covering the performance and outlook of the Company criteria of independence as provided in Section 149(6) is enclosed vide Annexure-II. of the Companies Act, 2013. 24 MECON MECON Limited

30.0 ACKNOWLEDGEMENT strategic plans of your Company to steer it responsibly to stellar heights. The Directors commend the indefatigable efforts of the employees at all levels which has contributed For and on behalf of the immensely to the growth of the Company this year. Board of Directors of Their dedication and commitment will stand the MECON Limited organisation in good stead to meet the challenges in future.

MECON has also enjoyed unstinting support and guidance from all the Ministries of the Government Atul Bhatt of India, particularly the Ministry of Steel, State Chairman and Managing Director Governments etc. All the stakeholders, especially the suppliers, customers and business partners, have extended tremendous support towards the success of Place: Ranchi the Organisation. Date: 28.09.2019 The Directors assure of their unwavering focus on the

25 MECON

Appendix - I FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2019 Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014. I. REGISTRATION & OTHER DETAILS:

1 CIN U74140JH1973GOI001199 2 Registration Date 31.03.1973 3 Name of the Company MECON LIMITED 4 Category/Sub-category of the Company PRIVATE COMPANY GOVERNMENT COMPANY 5 Address of the Registered office & contact details VIVEKANANDA PATH, P.O. DORANDA, RANCHI -834002 (JHARKHAND) 6 Whether listed company NO 7 Name, address & contact details of the Registrar & NIL Transfer Agent, if any. II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

Sl. Name and Description of main products NIC Code of the Product/ % to total turnover of the No. / services service company 1 CONSULTANCY SERVICES 80.00% 2 CONSTRUCTION CONTRACTS 20.00% III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl Name and address of the CIN/GLN Holding/ % of shares Applicable Section No Company Subsidiary/ held Associate 1 METALLURGICAL 2(6) OF & ENGINEERING JOINT – 50% COMPANIES ACT, CONSULTANTS (NIGERIA) VENTURE 2013 LTD. IV. SHARE HOLDING PATTERN (Equity share capital breakup as percentage of total equity) (i) Category-wise Share Holding

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change Category of % of Total % of Total during the Shareholders Demat Physical Total Demat Physical Total Shares Shares year A. Promoters (1) Indian ------a) Individual/ HUF - 240 240 0.0006% - 240 240 0.0006% 0.0000% b) Central Govt - 40,138,120 40,138,120 99.9994% - 40,138,120 40,138,120 99.9994% 0.0000% c) State Govt(s) - - - 0.0000% - - - 0.0000% 0.0000%

26 MECON MECON Limited

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change Category of % of Total % of Total during the Shareholders Demat Physical Total Demat Physical Total Shares Shares year d) Bodies Corp. - - - 0.0000% - - - 0.0000% 0.0000% e) Banks / FI - - - 0.0000% - - - 0.0000% 0.0000% f) Any other - - - 0.0000% - - - 0.0000% 0.0000% Sub Total (A) (1) - 40,138,360 40,138,360 100.0000% - 40,138,360 40,138,360 100.0000% 0.0000% (2) Foreign a) NRI - - - 0.0000% - - - 0.0000% 0.0000% Individuals b) Other - - - 0.0000% - - - 0.0000% 0.0000% Individuals c) Bodies Corp. - - - 0.0000% - - - 0.0000% 0.0000% d) Banks / FI - - - 0.0000% - - - 0.0000% 0.0000% e) Any other - - - 0.0000% - - - 0.0000% 0.0000% Sub Total (A) (2) - - - 0.0000% - - - 0.0000% 0.0000% TOTAL - 40,138,360 40,138,360 100.0000% - 40,138,360 40,138,360 100.0000% 0.0000% shareholding of promoter (A) = (A) (1) + (A) (2) B. Public Shareholding 1. Institutions a) Mutual Funds - - - 0.0000% - - - 0.0000% 0.0000% b) Banks / FI - - - 0.0000% - - - 0.0000% 0.0000% c) Central Govt - - - 0.0000% - - - 0.0000% 0.0000% d) State Govt(s) - - - 0.0000% - - - 0.0000% 0.0000% e) Venture - - - 0.0000% - - - 0.0000% 0.0000% Capital Funds f) Insurance - - - 0.0000% - - - 0.0000% 0.0000% Companies g) FIIs - - - 0.0000% - - - 0.0000% 0.0000% h) Foreign - - - 0.0000% - - - 0.0000% 0.0000% Venture Capital Funds i) Others - - - 0.0000% - - - 0.0000% 0.0000% (specify) Sub-total (B)(1):- - - - 0.0000% - - - 0.0000% 0.0000% 2. Non-Institutions a) Bodies Corp. i) Indian - - - 0.0000% - - - 0.0000% 0.0000% ii) Overseas - - - 0.0000% - - - 0.0000% 0.0000% b) Individuals i) Individual - - - 0.0000% - - - 0.0000% 0.0000% shareholders holding nominal share capital upto Rs. 1 lakh

27 MECON

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change Category of % of Total % of Total during the Shareholders Demat Physical Total Demat Physical Total Shares Shares year ii) Individual - - - 0.0000% - - - 0.0000% 0.0000% shareholders holding nominal share capital in excess of Rs 1 lakh c) Others (specify) Sub-total (B)(2):- - - - 0.0000% - - - 0.0000% 0.0000% Total Public (B) - - - 0.0000% - - - 0.0000% 0.0000% = (B) (1) + (B) (2) C. Shares held - - - 0.0000% - - - 0.0000% 0.0000% by Custodian for GDRs & ADRs Grand Total - 40,138,360 40,138,360 100.0000% - 40,138,360 40,138,360 100.0000% 0.0000% (A+B+C) (ii) Shareholding of Promoters

Shareholding at the beginning of the year Shareholding at the end of the year % of Shares % of Shares % change in % of total % of total S Pledged/ Pledged / shareholding Shareholder’s Name No. of Shares No. of Shares N encumbered encumbered during the Shares of the Shares of the to total to total year company company shares shares 1 THE PRESIDENT OF 40,138,120 99.9994% NIL 40,138,120 99.9994% NIL 0.0000% INDIA 2 SMT. RASIKA 120 0.0003% NIL 120 0.0003% NIL 0.0000% CHAUBEY, Govt. Director & Additional Secretary, Ministry of Steel* 3 SHRI ATUL BHATT, 120 0.0003% NIL 120 0.0003% NIL 0.0000% CMD* TOTAL 40,138,360 100.0000% 40,138,360 100.0000% 0.0000% * held as nominee shareholder of the President of India. (iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Shareholding at the beginning of Cumulative Shareholding during SN Particulars the year the year No. of shares % of total shares No. of shares % of total shares At the beginning of the year Date wise Increase / Decrease in Promoters - NO CHANGE - Share holding during the year specifying At the end of the year

28 MECON MECON Limited

(iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):

SN For each of the Top Shareholding at the beginning of the Cumulative Shareholding during the 10 shareholders year year

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

At the beginning of the year

Date wise Increase /Decrease in Promoters Share holding during the - NIL - year specifying

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

(v) Shareholding of Directors and Key Managerial Personnel:

SN For each of the Directors and Shareholding at the beginning of Cumulative Shareholding Key Managerial Personnel the year during the year

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

1 Smt. Rasika Chaube, Government Director & Additional Secretary, Ministry of Steel*

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

Date wise Increase /Decrease in Share holding during the - 0.0000% - 0.0000% year specifying the reasons for increase/ decrease

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

2 Shri Atul Bhatt, Chairman and Managing Director*

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

Date wise Increase /Decrease - 0.0000% - 0.0000% in Share holding during the year specifying the reasons for increase/ decrease

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

* held as nominee shareholders of the President of India

29 MECON

V. INDEBTEDNESS

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

(Amt. ₹/Lakh)

Particulars Secured Loans Unsecured Deposits Total excluding Loans Indebtedness deposits

Indebtedness at the beginning of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due - -

Total (i+ii+iii) - -

Change in Indebtedness during the financial year

* Addition

* Reduction - -

Net Change - -

Indebtedness at the end of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) NIL NIL

30 MECON MECON Limited

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

S Particulars of Name of Managing Director / Whole time Director / Manager (Shri) Total Amount N. Remuneration Atul Bhatt P. K. Sarangi Gautam Salil Kumar RH Juneja Chatterjee Period From 01-04-18 to 31-03-2019 1 Gross salary (a) Salary as per provisions contained 2,758,070.00 2,758,751.00 2,514,684.00 2,707,800.00 2,088,448.00 12,827,753.00 in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) 181,785.00 282,502.00 172,118.00 156,612.00 206,689.00 999,706.00 Income-tax Act, 1961 (c) Profits in lieu of salary under section - 17(3) Income- tax Act, 1961 2 Stock Option - 3 Sweat Equity - 4 Commission - - as % of profit - - others, specify - 5 Others, please specify - Total (A) 2,939,855.00 3,041,253.00 2,686,802.00 2,864,412.00 2,295,137.00 13,827,459.00

B. Remuneration to other Directors

Independent Directors S Total Particulars of Remuneration N. Shri Sisir Kumar Shri Deepak Krishnan Amount Appikatla (w.e.f. 23.01.2019) Fee for attending board committee meetings Commission - - - 1 Others, please specify 135,000.00 15,000.00 1,50,000.00 Total (1) 135,000.00 15,000.00 1,50,000.00

“Other Non- Executive Directors Shri Saraswati Prasad, IAS, S Total Particulars of Remuneration Smt Rasika Chaube (w.e.f. 16.07.18) N. Amount Shri T Srinivas, (from 24.05.18 to 16.07.18) & Shri Sunil Barthwal, IAS (upto 24.05.18)” Fee for attending board committee meetings Commission - - Others, please specify - - 2 Total (2) - - - Total (B)=(1+2) - - 1,50,000.00 Total Managerial Remuneration - - 1,50,000.00

31 MECON

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

Particulars of Remuneration Name of Key Managerial Personnel Total SN. Name & Designation CEO Company Secretary CFO Amount 1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - NA - 2 Stock Option 3 Sweat Equity 4 Commission - as % of profit - others, specify 5 Others, please specify Total VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Authority Appeal made, Companies Act Description Penalty / [RD / NCLT/ if any (give Punishment/ COURT] Details) Compounding fees imposed A. COMPANY Penalty Punishment NIL Compounding B. DIRECTORS Penalty Punishment NIL Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment NIL Compounding

32 MECON MECON Limited

ANNEXURE-A FORM AOC- 2

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

------

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

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

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

(b) Nature of contracts/ arrangements/ transactions NA

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

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

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

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

(g) Amount paid as advance, if any NA

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

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

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

b) Nature of contracts/ arrangements/ transactions NA

c) Durations of the contracts/ arrangements/ transactions NA

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

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

f) Amount paid as advance, if any NA

Atul Bhatt Chairman and Managing Director

33 MECON

APPENDIX- II CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY 1. a) Brief Outline of CSR & Sustainability Policy of MECON Limited ŠŠ The CSR & Sustainability policy of your Company is in accordance with the provisions of the Companies Act, 2013 and DPE guidelines and is approved by the Board based on the recommendation of the CSR & Sustainability Committee. The Board approved CSR & Sustainability Policy of the Company is available at www.meconlimited.co.in/Writereaddata/ Downloads/CSR_Policy.pdf ŠŠ Your Company has two-tier organizational structure to steer the CSR agenda. The Board Level CSR & Sustainability Committee comprising of a Part Time Independent Director as Chairman and two functional Directors as Members and a team of cross-section of employees, headed by a Nodal Officer constitutes the two-tier organization structure. ŠŠ The annual budget for CSR and Sustainability is approved by Board of Directors. ŠŠ The CSR plans are formulated and approved by CSR & Sustainability Committee and ratified by Board of Directors, as per the provision of Companies Act, 2013 and DPE guidelines. ŠŠ Your Company spends in each financial year, at least 2.0% of the average net profits made during the three immediately preceding financial years. Any unspent/unutilized fund of a particular year, is carried forward to the following year. ŠŠ The overall responsibility of CSR plans lies with the Nodal Officer, CSR & Sustainability. ŠŠ The CSR & Sustainability activities of your Company are as per Schedule-VII to the Companies Act,2013, with special attention to the development of weaker/marginalized/under privileged sections of the society including SC/ST/OBC/Minorities, women and children, old and aged, physically challenged etc. ŠŠ All the CSR activities are implemented in project mode. ŠŠ Your Company having expertise in Engineering and Project Management, all the CSR projects are monitored by the Company itself. ŠŠ The implementation and monitoring of CSR activities are overseen by the CSR & Sustainability Committee. ŠŠ As per Board’s approved CSR & Sustainability policy, Impact Assessment for all completed CSR projects / activities upto project cost of ₹ 50.0 lakh are carried out by the Company. However, where project cost exceeds of ₹ 50.0 lakh, the Impact Assessment is carried out by external agency. ŠŠ Your Company reports / discloses CSR activities to stakeholders through its official website: www.meconlimited.co.in/csr.aspx and its Annual Report at: www.meconlimited.co.in/Annual_ Report.aspx. b) The details of CSR Projects approved by the Board of Directors is available at www.meconlimited. co.in/csr_activities_planned.aspx c) The main highlights of CSR Projects/ Activities undertaken by your Company during the year are as follows: i) Sanitation (Swachh Bharat Abhiyan) ii) Healthcare iii) Drinking Water iv) Education v) Skill Development & Livelihood

34 MECON MECON Limited

vi) Social Welfare vii) Rural Development viii) Other activities/ Miscellaneous Programs 2. Composition of the CSR Committee ŠŠ The last reconstituted CSR & Sustainability Committee which was in place as on 31.03.2019, consists of the following Directors : i) Shri Sisir Kumar Appikatla Part Time Independent Director ii) Shri Pradipta Kumar Sarangi Director (Technical) iii) Shri Rajendra Harbhagwan Singh Juneja Director (Finance) The details on latest reconstituted CSR & Sustainability Committee is available at www.meconlimited.co.in/ Board_level_comitte_csr.aspx 3. a) Net Profit for CSR for the last 3 financial years are as follows : 2015-16 : ₹ (-) 17,496.18 Lakh 2016-17 : ₹ (-) 8,815.32 Lakh 2017-18 : ₹ 4,397.97 Lakh b) Average Net Profit for the last 3 financial years : ₹(-) 7,304.51 Lakh 4. a) Funds allocable towards CSR expenditure for the : NIL Financial Year 2018-19 (As per Section-135 of The Companies Act, 2013) b) Funds allocated towards CSR expenditure : ₹87.96 Lakh for the Financial Year 2018-19 {2% of Adjusted PBT (i.e., Rs. 4,397.97 Lakh) for FY 2017-18 as per DPE Guidelines} 5. Details of CSR fund spent during the financial year 2018-19, are indicated in Annexure-I. Manner in which the amount spent are as given below:

a) Total amount available for the financial year 2018-19 :

i) Unspent (Carry-over) fund : ₹ 456.07 Lakh *

ii) Allocation for financial year 2018-19 : ₹ 87.96 Lakh

Total amount : ₹ 544.03 Lakh

(*) Refer Note 40.20 “Disclosure on CSR” reported under Financial Statement in the Annual Report of the Company for the FY 2017-18

b) Total amount spent on CSR activities during the financial year 2018-19 : ₹ 16.92 Lakh

c) Amount unspent (to be carried to next financial year (i.e. FY 2019-20) : ₹ 527.11 Lakh 6. Reasons for not spending the amount: 6.1 The majority of CSR projects/activities are infrastructure development projects which take time in conceiving the project, carrying out basic design & detailed engineering, tendering, and then construction, etc. 6.2 The following projects as listed below could not be completed in FY 2018-19 due to the reasons as indicated:

35 MECON

i) Construction of Boys Hostel Building in Orphanage at Village-Sungi, Khunti [Sl. No.4 (i) of List of Carry-over Projects for FY 2018-19]: During FY 2017-18, the tender for the above project was invited in February’2018. However, as the L1 party had quoted the price which was very high compared to the approved cost estimate, the tender was cancelled in July’2018.The project was retendered in October’2018 and the Work Order was placed on Contractor in March’ 2019. The construction work at site is under progress. ii) Construction of Borewell at Old Age Home, Nagri, Ranchi [Sl. No. 4 (ii) of List of Carry-over Projects for FY 2018-19]: The tender for the above project was invited in August’ 2018. In spite of extending the due date of tender submission twice, no offer was received. The tender was again invited with revised Eligibility Criteria in October’ 2018. Despite extending the date of submission twice, only one offer was received and the Work Order could be placed on the Contractor at the end of March’ 2019. Work is under progress at site. iii) Construction of Community Centre in UP [Sl. No. 4 (iii) of List of Carry-over Projects for FY 2018- 19]: Regular reminders were sent to M/s HSCL (A subsidiary of NBCC) to complete the balance work of above project and submit their bills in line with GST along with Anti-profiteering declaration, but they are yet to submit the same. iv) All the projects mentioned below are complete and handed over to the Beneficiaries. The final bills of same are under processing for release of payment. a) Construction of Toilet Block in Village School of Adopted Village-Pancha [Sl. No. 5 (i) of List of Carry-over Projects for FY 2018-19] b) Construction of Toilet Complex in Adopted Village-Pancha [Sl. No. 5 (ii) of List of Carry-over Projects for FY 2018-19] c) Construction of Toilet Block for Girls in Orphanage of Adopted Village-Sungi [Sl. No. 5 (iv) of List of Carry-over Projects for FY 2018-19] d) Construction of Toilet Block for Boys in Orphanage of Adopted Village-Sungi [Sl. No. 5 (v) of List of Carry-over Projects for FY 2018-19] v) Construction of Toilet Complex in Adopted Village-Parsa Toli, Pancha [Sl. No. 5 (iii) of List of Carry- over Projects for FY 2018-19] The Contractor has submitted the 5th RA bill, which is under processing for release of payment. vi) Construction of 1 no. of Class room in Rural area of UP [Sl. No. 5 (vi) of List of Carry-over Projects for FY 2018-19] Regular reminders were sent to M/s HSCL (A subsidiary of NBCC) to complete the balance work of above project and submit their bills in line with GST along with Anti-profiteering declaration, but they are yet to submit the same. vii) a) Solar powered based Drinking water system in Adopted Villages –Nagri, Ranchi [Sl. No. 1 (i) of List of New Projects for FY 2018-19]: b) Solar powered based Drinking water system in Adopted Villages – Sungi, Block-Karra, Dist.- Khunti [Sl. No. 1 (ii) of List of New Projects for FY 2018-19] c) Solar powered based Drinking water system in Adopted Villages – Rai, Block-Khunti, Dist.- Khunti [Sl. No. 1 (iii) of List of New Projects for FY 2018-19] The tender for the above projects were invited in November’ 2018. In March’2019, the offers were under advanced stage of scrutiny and recommendation. viii) Project Smile : Cleft lip and Palate surgery for poor/down-trodden/needy patients [Sl. No. 2 (i) of List of New Projects for FY 2018-19]

36 MECON MECON Limited

The invoice(s) / bill(s) for Cleft lip and Palate surgery carried out in respect of four patients are awaited from M/s Akila Bharatha Mahila Seva Samaj, Bengaluru. ix) Construction of Toilet Complex at Adopted Village – Bar Toli, Pancha, Block-Bundu, Dist.-Ranchi [Sl. No. 3 (i) of List of New Projects for FY 2018-19]: The tender for the above projects were invited in December’ 2018. In March’2019, the offers were under advanced stage of scrutiny and recommendation. 7.0 The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and policy of the company. 8.0 i) It is also affirmed that all the applicable clauses of Guidelines issued by DPE vide OM No.: 15(13)/2013-DPE(GM) dated: 21.10.2014 is being complied with. ii) As per the guidelines issued by the Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises vide ref. No. CSR-08/0002/2018-Dir (CSR) dtd. 10.12.2018 for taking theme based intervention in School Education & Healthcare area in Aspirational Districts (as identified by NITI Aayog), your Company identified projects related to construction of Drinking water facilities in Adopted villages of Ranchi & Khunti Districts of Jharkhand (planned as Healthcare) and Cleft Lip & Palate Surgery for poor/down trodden / needy people at Visakhapatnam, and which are under progress.

Pradipta Kumar Sarangi Sisir Kumar Appikatla Director (Technical) Chairman (CSR Committee)

37 MECON 38 Appendix-A

MECON LIMITED Corporate Social Responsibility and Sustainability Summary of Planned Expenses for On-Going Regular/Carry-Over Projects under Implementation and New Projects for FY 2018-19

SI. Projects Item no. of Planned Recurring Planned Planned Total Planned Remarks No. Schedule-VII expenses on On- Expenses on Expenses on Expenses going Regular Carry-over New Projects of (In Rs. Lakhs) (Committed) activity projects 2018-19 (In Rs. Lakhs) (In Rs. Lakhs) (In Rs. Lakhs)

1 Sanitation (i) 0.000 2.970 0.000 2.970

2 Drinking water (i) 0.000 0.000 40.000 40.000

3 Healthcare (i) 2.000 0.000 4.500 6.500

4 Education (ii) 3.870 0.500 0.000 4.370

5 Skill development and Livelihood (ii) 3.800 1.920 0.000 5.720

6 Social Welfare (iii) 0.000 58.350 0.000 58.350

7 Rural development (x) 0.000 72.989 23.500 96.489

8 Other Activities/Miscellaneous Programs 13.600 1.000 0.000 14.600

TOTAL 23.27 137.73 68.00 229.00

Note: Š Th e overall expenditure on On-Going Regular Projects/Carry-Over Projects/New Projects shall be limited to the total fund available ₹ 229.00 lakhs. MECON

Appendix-B MECON LIMITED Corporate Social Responsibility and Sustainability List of “On-Going Regular Projects” under Implementation for FY 2018-19 Sl. Projects Item Financial Project Planned Remarks No. no. of Progress Cost Recurring Schedule- Target (%) in (In Rs. expenses on On- VII FY 2018-19 Lakhs) going Regular (Committed) activity From To (In Rs. Lakhs) 1 Healthcare i) Health Camps (i) 0 100 2.000 2.000 On-going regular activity Sub-Total (1) 2.000 2.000 2 Education i) Honorarium to Teachers of 13 Community Education Centres (ii) 0 100 3.120 3.120 On-going regular activity ii) Study Materials, Stationery, Plastic mat (Chatai) etc. for Community Education (ii) 0 100 0.750 0.750 On-going regular activity Centres Sub-Total (2) 3.870 3.870 3 Skill development and Livelihood i) Honorarium to Teachers of 10 Stitching Centres (ii) 0 100 2.400 2.400 On-going regular activity ii) Cloth, Stitchining Materials, Plastic mat (Chatai) for Students of Stitching Centres (ii) 0 100 0.400 0.400 On-going regular activity for Training iii) Annual Examination of 10 Stitching & Embroidery Centres (ii) 0 100 1.000 1.000 On-going regular activity Sub-Total (3) 3.800 3.800 4 Other Activities/Miscellaneous Programs i) Engagement of Photographer as supporting staff 1.750 1.750 On-going regular activity ii) Tours & travels for monitoring, site supervision etc. of projects 2.000 2.000 On-going regular activity

iii) Training of CSR employees & associated personnel for capacity building; Seminar, 2.600 2.600 On-going regular activity MECON Limited CSR Fair etc. iv) Printed stationery, Banners, Signboards etc. 0.250 0.250 On-going regular activity v) Other welfare projects/activities; Miscellaneous programmes 7.000 7.000 On-going regular activity Sub-Total (4) 13.600 13.600

39 TOTAL 23.270 23.270 MECON 40 Appendix-C MECON LIMITED Corporate Social Responsibility and Sustainability List of “Carry-Over Projects” under Implementation for FY 2018-19 Sl. Projects Item Financial Project Expenses Planned Expenses on Carry-over projects Remarks No. no. of Progress Target Cost done in (In Rs. Lakhs) Schedule- (%) in FY 2018- (in Rs. FY 12-13, VII 19 Lakhs) 13-14, 14- From To 15, 15-16, Under Under Under Sub- 16-17 & Initiation Tendering/ construction Total 17-18 (in stage/ Ordering stage stage/billing Rs. Lakhs) Management stage Approval Active Less stage Active 1 Sanitation i) Construction of Toilet Blocks / Repair of (i) 90.31 100 57.33 56.36 0.97 0.97 Project of FY 2014-15 dis-functional Toilets in MHRD schools in MHRD Schools in Jharkhand (under Swachh Vidyalaya Abhiyan) ii) Annual Maintenance of 36 nos. Bio- (i) 0 100 1.00 1.00 1.00 Project of FY 2017-18 Toilet / Purchase of Bio-Media Kit iii) Annual Maintenance of 36 nos. Bio- (i) 0 100 1.00 1.00 1.00 Additional fund Toilet / Purchase of Bio-Media Kit requirement for Sl. No. 1 ii) for completion of already approved project of FY 2017-18. Sub-Total (1) 59.33 2.00 0.00 0.00 0.97 2.97 2 Education i) Study materials, Stationery, etc. for (ii) 0 100 0.50 0.00 0.00 0.00 0.00 0.50 0.50 Project of FY 2017-18 Community Education Centres Sub-Total (2) 0.50 0.00 0.50 0.00 0.00 0.50 3 Skill Development i) Cloths, Stitching Materials for Students (ii) 0 100 0.75 0.00 0.00 0.00 0.00 0.75 0.75 Project of FY 2017-18 of Stitching Centres for Training

Contd... MECON

Sl. Projects Item Financial Project Expenses Planned Expenses on Carry-over projects Remarks No. no. of Progress Target Cost done in (In Rs. Lakhs) Schedule- (%) in FY 2018- (in Rs. FY 12-13, VII 19 Lakhs) 13-14, 14- From To 15, 15-16, Under Under Under Sub- 16-17 & Initiation Tendering/ construction Total 17-18 (in stage/ Ordering stage stage/billing Rs. Lakhs) Management stage Approval Active Less stage Active ii) Annual Examination of 10 nos. Stitching (ii) 0 100 0.37 0.00 0.00 0.00 0.00 0.37 0.37 Project of FY 2016-17 & Embroidary Centres (Payment to UIL) iii) Annual Examination of 10 nos. Stitching (ii) 0 100 0.82 0.00 0.00 0.00 0.00 0.80 0.80 Project of FY 2017-18 & Embroidary Centres Sub-Total (3) 1.94 0.00 0.00 0.00 0.00 1.92 1.92 4 Social Welfare i) Construction of Boys Hostel in (iii) 0 100 28.10 0.00 0.00 28.10 0.00 0.00 28.10 Project of FY 2015-16 Orphanage at Vill.-Sungi, Khunti (Fund provision in FY 2015-16 : Rs. 15.0 lakhs; in FY 2016-17: Rs. 12.0 lakh: in FY 2017-18 Rs. 1.10 Lakh) ii) Construction of Borewell at Old Age (iii) 0 100 3.25 0.00 0.00 3.25 0.00 0.00 3.25 Project of FY 2017-18 Homes, Nagri, Ranchi iii) Construction of Community Centre in 33.40 100 40.55 13.55 0.00 0.00 0.00 27.00 27.00 Project of FY 2013-14 UP Sub-Total (4) 71.90 13.55 0.00 31.35 0.00 27.00 58.35 5 Rural Development i) Construction of Toilet Block in Village (x) 83.14 100 42.07 34.98 0.00 0.00 0.000 7.09 7.09 Project of FY 2012-13 School of Adopted Village-Pancha MECON Limited ii) Construction of Toilet Complex in (x) 88.70 100 59.14 52.46 0.00 0.00 0.00 6.68 6.68 Project of FY 2012-13 Adopted Village-Pancha iii) Construction of Toilet Complex in (x) 44.19 100 59.14 26.13 0.00 0.00 0.00 33.01 33.01 Project of FY 2012-13 Adopted Village-Parsa Toil, Pancha 41 Contd... MECON 42

Sl. Projects Item Financial Project Expenses Planned Expenses on Carry-over projects Remarks No. no. of Progress Target Cost done in (In Rs. Lakhs) Schedule- (%) in FY 2018- (in Rs. FY 12-13, VII 19 Lakhs) 13-14, 14- From To 15, 15-16, Under Under Under Sub- 16-17 & Initiation Tendering/ construction Total 17-18 (in stage/ Ordering stage stage/billing Rs. Lakhs) Management stage Approval Active Less stage Active iv) Construction of Toilet Block for Girls in (x) 71.55 100 35.37 25.31 0.00 0.00 0.00 10.06 10.06 Project of FY 2013-14 Orphanage of Adopted Village-Sungi v) Construction of Toilet Block for Boys in (x) 60.27 100 35.57 21.44 0.00 0.00 0.00 14.13 14.13 Project of FY 2014-15 Orphanage of Adopted Village-Sungi vi) Construction of 1 no. of Class room in (x) 73.43 100 7.60 5.58 0.00 0.00 0.00 2.02 2.02 Project of FY 2012-13 Rural area of UP Sub-Total (5) 238.89 0.00 0.00 72.99 72.99 6 Other Activities/Miscellaneous Programs i) Exhibition-cum-Craft Mela for centres, 1.00 1.00 0.00 0.00 0.00 1.00 Project of FY 2015-16 villages etc. Sub-Total (6) 1.00 1.00 0.00 0.00 0.00 1.00 TOTAL 3.00 31.85 0.00 102.88 137.73 MECON

Appendix-D MECON LIMITED Corporate Social Responsibility and Sustainability List of “New Projects” for FY 2018-19

Sl. Projects Item no. of Financial Progress Target Project Cost Planned Expenses on Remarks No. Schedule-VII (%) in FY 2018-19 (in Rs. Lakhs) New Projects of 2018- From To 19 (In Rs. Lakhs) 1 Drinking water i) Solar powered Drinking water system in Adopted (i) 0 100 14.00 14.00 New project Village-Nagri, Ranchi. ii) Solar powered Drinking water system in Adopted (i) 0 100 13.00 13.00 New project Village-Sungi, Block-Karra, Dist.-Khunti iii) Solar powered Drinking water system in Adopted (i) 0 100 13.00 13.00 New project Village-Rai, Block-Khunti, Dist.-Khunti Sub-Total (2) 40.00 40.00 2 Healthcare i) Project Smile : Cleft lip and Palate surgery for poor/ (i) 0 100 3.50 3.50 New project down-trodden/needy patients ii) Cataract surgery for poor/down-trodden needy (i) 0 100 1.00 1.00 villagers Sub-Total (3) 4.50 4.50 3 Rural development i) Construction of Toilet Complex in adopted Village (x) 0 100 23.50 23.50 MECON Limited Bar Toli, Pancha, Block-Bundu, Dist-Ranchi Sub-Total (4) 23.50 23.50 TOTAL 68.00 68.00 43 MECON 44 ANNEXURE - I MANNER (DETAILS OF THE PROJECT) IN WHICH THE AMOUNT SPENT DURING THE FINANCIAL YEAR 2018-19 (Period April’2018 – March’2019) (As on: 31.03.2019)

1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads 1. Sanitation (SwachhVidyalaya – Swachh Bharat Abhiyan in MHRD Schools) i) Construction of Toilets in MHRD Infrastructure 10 nos. in Ranchi&Deoghar 96,620 — 1,80,040 2,31,585 Work complete Schools of Jharkhand (under Development districts of Jharkhand (in FY 14-15) + a) Physical progress – SwachhVidyalayaAbhiyan) Programme 46,22,850 100% (Carry-over project of FY 2015- - Sanitation (in FY 15-16) + b) Financial progress – 16) 98.31% 8,33,490 c) Performance Certificate [Project Cost : (Toilets) : (in FY 16-17) awaited from Contractor. ` 57,33,000/-] = 56,36,380 ii) Annual Maintenance of 36 nos. Sanitation 12 nos. in Hazaribagh and 24 2,00,000 89,965 89,965 Direct Work complete Bio-Toilets/ Purchase of Bio- nos. in Lohardaga Districts of a) Physical progress – Media Kit Jharkhand 100% b) Financial progress – 100% Sub-Total (1) 2,96,620 89,965 57,26,345

* Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON

1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads 2. Healthcare i) Health camps in Mobile Ambulance Healthcare i) Mobile Health camps 2,00,000 2,31,585 2,31,585 Direct 1) Regular on-going project Van with a team of doctors, with a team of doctors, a) Physical progress – paramedical staff etc. alongwith paramedical staff etc. 100% medicines for free health check- alongwith medicine for b) Financial progress – up, wherein medicines were given free health check-up & 100% to the poor & needy patients medicines were given 2) No. of Health Camps : 95 to the poor & needy No. of Patients : 4,464 patients at Vill.- Ganyor Toli, Jagannathpur, CSR Pavilion, Shyamali in proper & near Ranchi;Vill,- Pancha, Block - Bundu; Vill.-Rupru, Block – Angara in Ranchi district and Vill.- Raiand Vill – Aamjharia&Vill.- Sungi, Block – Karrain Khunti District of Jharkhand ii) Project SMILE : Cleft Lip and Palate Healthcare At Visakhapatnam, A.P. 3,50,000 — — Bills awaited for 4 nos. Surgery for poor/ downtrodden/ through Akila Bharatha Mahila patients. Application for MECON Limited needy patients Seva Samaja, Koramangala, remaining 16 nos. patients Bangalore, Karnataka awaited from ABMSS. iii) Cataract Surgery for poor/ Healthcare Village – Pancha, Block – Bundu, 2,55,500 1,50,575 1,50,575 Work completed. downtrodden/needy villagers Taimara, District - Ranchi Sub-Total (2) 8,05,500 3,82,160 3,82,160 45 * Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON 46 1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads 3. Drinking Water i) Solar powered Drinking Water Drinking Village – Aamjharia, Sungi, 13,00,000 — — In advance stage of Tendering System in Adopted Village Water Block – Karra, District – Khunti, State - Jharkhand ii) Solar powered Drinking Water Drinking Village – Rai, Panchayat – 13,00,000 — — In advance stage of Tendering System in Adopted Village Water Fudi, District – Khunti, State - Jharkhand iii) Solar powered Drinking Water Drinking Village –Pandutoli, Block – 14,00,000 — — In advance stage of Tendering System in Adopted Village Water Nagri,District – Ranchi, State - Jharkhand Sub-Total (3) 40,00,000 — — 4. Education i) Free Literacy programme for the Education Vill.- Oberia, Vill.- GanyorToli, Regular on-going project under privileged children at 13 Vill.-PokharToli, IrgooToli (2 a) Physical progress – Community Education Centres nos.), Argora, Jaganathpur, 100% RavidasMohalla, Kusai, • Honorarium to teachers 3,12,000 2,72,000 2,72,000 b) Financial progress – PatharKocha, BharamToli in Direct • Study materials, Stationery, 50,000 32,835 32,835 100% proper & near Ranchi; Vill. – etc. (FY 2017-18) Rupru, Angara Block of Ranchi • Study materials, Stationery, District &Vill. – Rai of Khunti 75,000 etc. (FY 2018-19) district of Jharkhand #Purchase of plastic mats 7,920 7,920 Sub-Total (4) 4,37,000 3,12,755 3,12,755

* Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON

1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads 5. Skill Development & Livelihood i) Free Stitching training for under Women Mani Tola, Doranda Mistri Direct Regular on-going project privileged women at 10 stitching Empowerment Mohalla, Hinoo, Argora, a) Physical progress – Centres Scheme Pathar Kocha, Kishoreganj, 100% • Honorarium to teachers (Employment/ Jagannathpur in proper & near 2,40,000 2,26,000 2,26,000 b) Financial progress – • Cloths & Stitching Materials Livelihood Ranchi, Vill.- Pancha, Block – 75,000 44,075 44,075 100% Enhancing for Practice Stitching Bundu & Vill.- Kuchhu, Block Vocational (2017-18 batch) Skills) - Ormanjhi in Ranchi District & • Annual Examination Fees Vill – Sungi of Khunti district of 37,000 31,280 31,280 (FY 2016-17) Jharkhand. • Annual Examination 80,000 (FY 2017-18) : 26,695 26,695 # Annual Examination Fees 29,430 29,430 # Other Expenditure related to Examination Material, Miscellaneous Expenses, etc. • Cloths, Stitching Materials etc. for Training (1-19 batch) 40,000 # Purchase of Plastic Mats 6,000 6,000 ii) Vocational Training in the field of Vocational VTI, Shyamali, Ranchi Direct -- Electrical technician and Welding Training Scheme (Jharkhand) MECON Limited (Employment/ technology Livelihood • Honorarium to staff members Enhancing 2,900 2,900 (March’2018 of FY 2017-18) Vocational Skills)

Sub-Total (5) 4,72,000 3,66,380 3,66,380 47 * Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON 48 1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads 6. Social Welfare i) Construction of Community Centre Infrastructure Akbarpur, Dist.-Kanpur Dehat, 27,00,595 — 6,11,370 Direct Construction work under (Project cost: ` 40,55,205) Development State – U.P. (in FY 13-14)+ progress (Carry-over project of FY 2013- Programme 57,450 a) Work done upto Roof level. 14) (in FY 15-16)+ b) Physical progress – Start date: 07.06.2013 6,62,930 61.79% Completion date: 06.04.2014 (in FY 16-17)+ c) Financial progress – (10 months) 22,860 33.40% (in FY 17-18) d) Bills awaited from M/s HSCL. = 13,54,610 e) Balance work : Doors, Stair’s Railing, Plumbing, Sanitary, Plastering, Electrical, Painting, Septic tank, Soak Pit, Boundary wall, Gate, etc. ii) Construction of Bore well at Old Drinking VikasSamajKalyanSansthan, 3,25,000 — — Direct Work Order placed on Age Home Water Village – Kulgu, Block – Nagri, 29,03.2019. District - Ranchi iii) Construction of Boys Hostel in Infrastructure Village – Sungi, Block – Karra, 35,22,000 — — Direct Physical Progress - 1% Orphanage “AnmolBasera” Development District – Khunti, State - Financial Progress – NIL. (Project cost: ` 35,22,000) Programme Jharkhand (Approved Project of FY 2015-16) Sub-Total (6) 65,47,595 — 13,54,610

* Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON

1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads 7. Rural Development i) Construction of 3 nos. Toilet Infrastructure 1) Village Residential 46,78,195 — 18,27,745 Direct 1) Village School – Work complexes Development School (Pranavanand (in FY 12-13) + complete. (Total Project cost: ` 1,60,34,715/-)Programme - Vidya Mandir), Pancha– 37,31,740 a) Physical progress – 100% (Carry-over projects of FY 2012-13)Sanitation (14-seater toilet) (in FY 13-14) + b) Financial progress – Start date: 08.03.2013 2) Village – Pancha (10-seater 7,65,200 83.14% (LOI) toilet) (in FY 14-15) + c) Final bill under processing in Finance Completion date: 07.09.2013 3) Village –ParsaToli, Pancha 37,52,600 d) Bills for additional work (6 months) (10-seater toilet) (in FY 15-16)+ under processing in Finance. (As per Work Order) All the above in Block – Bundu, 5,01,735 2) Vill.-Pancha – Work complete. Dist – Ranchi, State - Jharkhand (in FY 16-17)+ a) Physical progress – 100% 8,23,090 b) Financial progress – (in FY 17-18) 88.70% = 1,14,02,110 c) Final bill under processing in Finance d) Bills for additional work under processing in Finance. 3) Vill – ParsaToli a) Physical progress –

65.76% MECON Limited b) Financial progress – 44.19% c) Balance work: Plumbing, Sanitary, Electrics, Finishing, Solar PV System, etc. 49 * Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON 50 1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads

ii) Construction of 1 no. Toilet complex Infrastructure Village – Sungi, Block – Karra 10,06,385 — 7,95,590 Direct Work complete Development (in FY 13-14) + (5-seater toilet) for Girls at Dist – Khunti, State – Jharkhand a) Physical progress – Programme Orphanage Hostel (AnmolBasera) 9,92,240 100% Sanitation (in FY 14-15) + (Project cost: ` 35,37,405/-) - b) Financial progress – 7,19,295 71.55% (Carry-over project of FY 2013-14) (in FY 15-16)+ c) Final bill under Start date: 27.09.2013 23,895 processing in Finance. Completion date : 26.03.2014 (in FY 16-17) (6months) = 25,31,020 (As per Work Order)

iii) Construction of 1 no.Toilet Infrastructure Village – Sungi, Block – Karra 14,13,285 — 11,53,045 Direct Work complete Complex (5-seater toilet) for Development Dist – Khunti, State - Jharkhand (in FY 14-15) + a) Physical progress – Boys at Orphanage Hostel Programme - 2,26,525 100% (AnmolBasera) Sanitation (in FY 15-16)+ b) Financial progress – (Project cost: ` 35,57,005/-) 60.27% 7,64,150 c) Final Bill under (Carry-over project of FY 2014-15) (in FY 16-17) processing in Finance Start date: 04.09.2014 = 21,43,720 Section Completion date: 03.03.2015 (6 months) (As per Work Order)

* Note for Column 6 - All expenditures are Direct except shown under Sl. No. 8 & 9 MECON

1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent on Cumulative Amount Status of the Project No. which the outlay the projects or expenditure upto spent: 1. Local area or Others Project is (Budget) programmes for the reporting Direct or covered 2. Specify the state and Project or FY 2018-19* period through district Programme imple- Sub-heads : wise menting (where projects or programmes 1. Direct agency* were undertaken) expenditure on projects or programmes 2. Overheads iv) Construction of a Classroom at Infrastructure Village-Raigaon, Dewariya 2,02,135 — 3,54,700 Direct Some Electrical work, glass Madarsa Ahle Sunnat Development Alawal, Dist-Gonda, State – (in FY 13-14) + fitting, floor repair, painting (Project cost : ` 7,60,677/-) Programme – U.P. 2,03,840 of grill, window & building, (Carry-over project of FY 2012-13) Construction (in FY 14-15) etc is pending. Start date : 27.11.2012 of Classroom =5,58,540 a) Physical progress – 95% Completion date: 31.03.2013 b) Financial progress– 73.43% (4 months) (As per Work Order) v) Construction of 1 No. Toilet Sanitation Village – Bar Toli, Pancha, Block 24,34,000 — — In advance stage of tendering Complex – Bundu, Taimara, District - process. (Project cost: ` 24,34,000) Ranchi Sub-Total (7) 97,34,000 — 1,66,35,390 8. Administrative/ Training Cost i) Tours & Travels, Taxi Fare, etc. 2,00,000 2,66,420 2,66,420 Direct Sub-Total (8) 2,00,000 2,66,420 2,66,420 9. Other activities/Miscellaneous programs i) Miscellaneous Expenses such as 4,23,500 2,74,285 2,74,285 Direct - Engagement of Photographer

on contract, Entry Fee for SCOPE MECON Limited Meritorious Award, expenses on miscellaneous activities, etc. Sub-Total (9) 4,23,500 2,74,285 2,74,285 Grand Total 2,29,16,215 16,91,965 51 MECON

ANNEXURE – I TECHNOLOGY ABSORPTION Efforts made and benefits derived like product improvement, cost reduction, product development or import substitution Indigenously developed Technology

Sl. Efforts made towards technology Benefits derived like product improvement, cost reduction, No. absorption product development

1 Development of Torpedo Ladle Car The technology aims at providing the following benefits. monitoring system using Infrared 1. Increasing safety and average life of torpedo ladle. Imaging. 2. Prevention of torpedo ladle breakout by early detection of affected areas. 3. Reduction of production cost by increasing service life of torpedo refractory. 4. Advanced data management and analysis with the help of database of torpedo ladle.

2 Development of hydraulic tilting In most of the existing smaller blast furnaces the hot metal is runner for hot metal evacuation directly poured into open top ladles through spouts and the ladles in retro-fitting mini blast furnace are maneuvered using cranes. This is a major bottleneck in day- upgradation to-day cast house operation and maintenance. Your Company has designed in-house indigenous tilting runner which is operated hydraulically as in modern large blast furnaces. For retrofitting this kind of tilting runner in smaller and older blast furnaces, your Company has also incorporated Transfer car for ladle positioning and maneuvering. For blast furnaces that are already equipped with motorized tilting runner, the incorporation of hydraulic cylinder based tilting runner offers significant advantages in terms of operation, maintenance and reliability. The system is already in operation successfully at one installation. Your Company with its in-house research and design is fully prepared to provide the industry with innovative solutions such as hydraulic tilting runner along with transfer car arrangement in existing Blast Furnace installations to improve the overall efficiency.

52 MECON MECON Limited

ANNEXURE-II MANAGEMENT DISCUSSION AND ANALYSIS REPORT 1.0 INTRODUCTION The growth saga of MECON continues with order book crossing ₹3000 Crore mark for the last financial year. This has been made possible by leveraging the existing capabilities to explore new areas like strategic mining areas and harnessing full potential of Oil & Gas and Infrastructure projects apart from consolidating the position in traditional metal sector wherein your company is bringing cutting edge technology for various clients through strategic partnerships with global technology suppliers. Your company is making serious endeavors to expand its global outreach through extensive participation in international summits & business meets and bringing international exposure & experience for the young workforce. This would help revamp the working practices in the company in synchronisation with global benchmarks. Nevertheless, consistent efforts for creating satisfied clients and breaking new grounds holds the key to sustain the growth momentum and together we stand committed for another successful year ahead. 2.0 SWOT Analysis STRENGTHS i. Multi-disciplinary experienced and capable pool of engineers / technologists in various specialized technical disciplines. ii. Vast knowledge repository and reference materials, being a legacy design, engineering & consultancy organization. iii. Core competency in providing end to end solutions in the area of Metals & Mining with established market recognition. iv. Capability in equipment & system design and supply & execution in Ferrous area. v. Prominent presence in gas pipelines project of GAIL (Long Distance Pipe Line & City Gas Distribution etc.) vi. Experience in DEC and PMC services for Government Housing Boards, State & Central Institutional Buildings, State Transcos for setting up sub-station etc. vii. In-house Environmental Engineering Laboratory. NABET / QCI Accreditation for 16 sectors. viii. Low average age of employee due to Induction of young professionals. ix. Good credentials with financial institutions and regulatory authorities. x. Wide network of offices at various locations across the country. WEAKNESSES i. High incidence of employee benefit expense as compared to some of the competitors, especially in the private sector. ii. Depletion of critical knowledge / skills in certain areas on account of superannuation / separation of experienced manpower. iii. Skewed organization structure (Still under transition). iv. Technological obsolescence / gap especially in the areas of steel making, continuous casting and rolling mills. v. Challenges in credentials for meeting PQ criteria eg. end to end EPC in the field of thermal and renewable energy, refining & petrochemicals etc. vi. Systemic constraints in vendor development for strengthening execution of EPC jobs. vii. Inadequate experienced manpower for execution activities at project sites. viii. Consolidation of strength in diversified sectors may take some more time. ix. Very limited presence in the overseas market. x. Public sector limitation in operational flexibility.

53 MECON

OPPORTUNITY i. Anticipated future investments in mining, beneficiation, agglomeration / pelletisation, slurry transportation and coal washeries. ii. Possible future investment in Steel sector in view of the National Mission of 300 MT Crude Steel Capacity by 2030-31. iii. Large scale investments in other diversified sectors viz. oil & gas, infrastructure & strategic sectors and power transmission & distribution & renewable energy sector. iv. Leveraging past experience in defence sector to harness new opportunities emanating with the opening of Defence Production sector for participation of private sector (FDI hiked to 49%). v. Expansion in ports, power and mining sector are expected to offer associated Material Handling Projects and the Company expects to generate business from this sector, both on its own credentials and also through joint participation with other Companies. vi. Opportunities from Govt. Flagship schemes such as Pradhan Mantri Awas Yojana (PMAY), Deen Dayal Upadhaya Gram Jyoti Yojna (DDUJGY), Bharat Mala, Sagar Mala, Urja Ganga, Swachh Bharat etc. THREAT i. Mushrooming of consultancy companies operating at low margins. ii. Presence of Indian set-up of all major MNCs like SMS, Siemens, Danielli, Kobe Steel, etc providing comprehensive services including engineering. Private sector, in particular, opting for engineered packages from the turnkey suppliers, without engagement of external consultants. iii. Stringent technical pre-qualification criteria for consultancy as well as supply jobs. iv. Recent decline in investment in the core area of Metals in the past but continued dependence on Metals sector. v. Uneven playing ground for public & private sectors. vi. Today’s consortium partners emerge as future Competitors. vii. Risk/uncertainty in foreign strategic tie-ups. viii. Long approval process along with delays in infrastructure sector may impact the overall opportunity in the sector. ix. Delays in statutory clearances, land acquisition and R&R issues. 3.0 BUSINESS OUTLOOK Global Economic Scenario As per World Economy Outlook recent report, global activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. China’s growth declined due to increased trade tensions with United States & regulatory tightening in shadow banking. The euro area economy lost more momentum than expected as consumer and business confidence weakened and car production in Germany was disrupted by the introduction of new emission standards, investment dropped in Italy as sovereign spreads widened, and external demand, especially from emerging Asia, softened. As a result of these developments, global growth is now projected to slow from 3.6 % in 2018 to 3.3 % in 2019. As per International Monetary Fund (IMF), gradual pickup in the second half of 2019 is predicated on an ongoing buildup of policy stimulus in China, recent improvements in global financial market sentiment, the waning of some temporary drags on growth in the euro area and a gradual stabilization of conditions in stressed emerging market economies, including Argentina and Turkey. Beyond 2020, global growth is set to plateau at about 3.6 percent over the medium term, sustained by the increase in the relative size of economies, such as those of China and India, which are projected to have robust growth by comparison to slower-growing advanced and emerging market economies (even though Chinese growth will eventually moderate). Indian Economic Scenario Despite softer growth in the world economy, the Indian economy remains one of the fastest growing and possibly the least affected by global turmoil. As per the latest projections of Central Statistics Office (CSO), India’s GDP is estimated to have increased 7.2 % in 2017-18 and 7.0 % in 2018-19. Net direct tax collection for 2018-19 had crossed Rs 10 trillion (US$ 144.57 billion) by March 16, 2019, while goods and services tax (GST) collection stood 54 MECON MECON Limited

at Rs 10.70 trillion (US$ 154.69 billion) as of February 2019. Due to launch of campaign such as Make in India (MII) numerous foreign companies are setting up their facilities in India and it is expected that this campaign will boost the manufacturing sector of Indian economy and will also enhance purchasing power of an average Indian consumer. The Government of India, as per National Manufacturing Policy under the Make in India initiative, is trying to give boost to the contribution made by the manufacturing sector and aims to take it up to 25 % of the GDP by 2022-23 from the current 17 %. Besides, the Government has also come up with Digital India initiative, to increase the digital literacy, National Steel Policy to reach 300MT by 2030-31 and other policies such as Housing For All, Power For All, Urja Ganga, Ayushman Bharat etc. in order to further strengthen the Indian economy. ŠŠ Steel Industry The Steel Sector contributes over 2% to the GDP of the nation and employs more than 0.5 million people directly and 3 million indirectly. As per the World Steel Association, India is the fastest-growing market for steel among the top 10 largest steel markets by volume. The steel demand in India is expected to remain robust with growth ranging from 7 to 8% p.a. The total crude steel production in the country has reached 106.50 MT in 2018-19, surpassing Japan to become world second largest producer. Moreover the steel production capacity has increased to 138 MT in 2018-19 which is expected to reach 300 MT by 2030-31 as per National Steel Policy 2017. Considering the comparatively low per capita steel consumption of 71 Kg and expected growth in consumption due to growth in infrastructure, construction and manufacturing, your Company is ready to harness the opportunity. Your Company believes that the growth of the steel industry will be driven by infrastructure, construction, engineering & fabrication, oil and gas and automotive. Moreover easy availability of manpower and presence of rich endowment of iron ore reserves makes India competitive in global set- up. Even the policy support from the Government in the form of imposition of safeguard duty or anti-dumping duty on import of steel and export duty on iron ore ensures that the domestic industry capitalize on the future growth opportunity, mainly drawn by domestic demand, Domestically Manufactured Iron & Steel Products (DMI & SP) Policy, quality control orders etc. The country’s steel production capacity is growing at a CAGR of 8.71% over a period of 10 years and is expected to achieve 300MT of production capacity by 2030-31. Such expansion of production capacity will translate into additional investment of almost Rs 10 Lakh Crore by 2030-31 poising great opportunity for your Company to get a significant share of the additional investment. India’s share in global steel production is expected to be 7.7% by 2021 as compared to 5.9% in 2018. Whereas the domestic finished steel consumption is growing at a CAGR of 5.70% during the last 10 years. Finished steel consumption during the year under review stood at 97.5 MT. Gone are the days when the gap between India’s export and import of finished steel was very huge. Increased supply of steel ensures India will continue to be a major global exporter as well. Now India’s export during April, 2018 to February, 2019 (P) stood at 5.77 MT and import stood at 7.13 MT. The long term prospect for the steel industry in India remains optimistic in wake of domestic demand potential, duly supported by various policy initiatives of Government of India, the National Steel Policy (NSP-2017), DMI & SP, Make in India etc. Your company has strived to reinforce its technological capability in the entire value chain of iron & steel industry through the technological tie-ups and harness the opportunities emerging from the government policies. ŠŠ Power Generation: Sources of power generation in India range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar and agricultural and domestic waste. The Government of India’s focus on attaining ‘Power For All’ has accelerated capacity addition in the country with thrust on renewable source of energy and strengthening Transmission & Distribution (T&D) infrastructure. Total installed capacity of power stations (Thermal, Nuclear, Hydro & Renewable Energy Sources) in India as on 30.04.2019 stood at 356 Giga watts (Source: CEA-Central Electricity Authority). The thermal power generation industry has been retrofitting Thermal Power Plant (TPP) units with pollution control measures in order to comply with the stringent emission limits notified by the Ministry of Environment, Forest and Climate Change (MoEFCC) in December 2015. In order to meet the standards, new emission control systems, including Flue Gas Desulphurization (FGD) and Electrostatic Precipitators (ESPs), needed to be installed at power plants. Accordingly your Company is providing its consultancy services for De-Sox & De-NOx emissions. Your Company has also forged strategic tie-up with technology partner in the area of FGD technology. Also, your Company is focusing on Retrofitting, Renovation & Modernization (R&M) of ageing thermal & hydel plants. 55 MECON

ŠŠ Oil & Gas: The Government of India aims to increase the share of green energy in total energy mix to 15%. Government of India has adopted several policies to fulfill the increasing domestic demand for oil and gas and making the sector conducive for investment. The government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products, and refineries. Under Government of India schemes such as Urja Ganga, your Company has rendered its services in the various projects such as Aurariya- Phulpur Natural Gas Pipeline (NGPL), Kochi-Kottanad-Bengaluru-Mangalore NGPL, Jagdispur-Haldia-Bokaro- Dhamra NGPL. The cumulative length of pipeline of these three projects is more than 2600 KM. Also your Company has offered its Design Engineering & Consultancy (DEC) & Project Management Consultancy (PMC) range of services in Group Gathering Station, City Gas Distribution & Petroleum Oils & Lubricant (POL) terminals. Your Company is also focusing to enrich its services and move up the value chain to cater to the mid-stream & up- stream segments of oil & gas. ŠŠ Infrastructure: Investment worth Rs 50 trillion in infrastructure is planned by 2022. Infrastructure sector is a key driver for the Indian economy. This sector is one of the largest receivers of FDI inflows in India. Initiatives like “Housing For All” & “Smart Cities Mission” will direct the growth of the sector. 100 per cent FDI is permitted through the automatic route in the sector. ¾¾ Power Transmission & Distribution: Government of India have launched various schemes for strengthening the Power T&D infrastructure of the country such as Integrated Power Development Scheme (IPDS), Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) etc. Your Company is offering consultancy services to Jharkhand Bijli Vitran Nigam Limited (JBVNL), Odisha Power Transmission Corporation Limited (OPTCL) etc. ¾¾ Telecom: India is currently the world’s second-largest telecommunications market with a subscriber base of 1.20 billion as on Feb, 2019. FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent; out of 100 per cent, 49 per cent automatic route and the rest will be done through the Foreign Investment Promotion Board (FIPB) approval route. The Government of India has introduced Digital India programme under which all the sectors such as healthcare, retail, etc. will be connected through internet. Under this program BHARATNET services has been launched in order to provide optical fibre network to provide broadband connectivity to all gram panchayats of the country. Your Company is also rendering services in this field. ¾¾ Water: Government of India have launched the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) with the aim of providing basic civic amenities like water supply, sewerage, urban transport, parks as to improve the quality of life for all. Environmental authorities in India have directed industries to introduce Zero Liquid Discharge (ZLD) system in their process plants. Your Company is providing consultancy & project management services in the field of ZLD, Water Desalination plant & Sewerage Treatment plant. ¾¾ Ports: India has a long coast line of about 7,517 Km with more than 200 ports including 13 major ports, providing ample opportunity in this sector. Government of India has allowed FDI of up to 100 per cent under the automatic route for port and harbor construction and maintenance projects. Government of India has embarked on the ambitious Sagarmala Programme which aims to promote port-led development in the country. Your Company may play key role in many projects envisaged under Sagarmala program. Also, your Company is targeting projects in the port related material handling facilities. ¾¾ Healthcare: Government of India launched Pradhan Mantri Jan Arogya Yojana (PMJAY), Ayushman Bharat. Under this scheme, your Company is working in the project of All India Institute of Homeopathy at Narela (Delhi) under Ministry of Ayush. ¾¾ Environment: Under the guidelines of MoEFCC, your Company has been undertaking Environmental Impact Assessment (EIA), Environment Management Plan (EMP) & Socio-Economic Impact Assessment (SEIA) studies for mining industries, infrastructure projects & power. ¾¾ Strategic Sectors: Government policies continue to focus on strategic sectors such as defense, space & atomic minerals with substantial enhancement in the budget. Your Company is already providing DEC & 56 MECON MECON Limited

PMC services in these strategic sectors for projects of Indian Army, Ordnance depots, Navy, ISRO, UCIL etc. BUSINESS PROCUREMENT Total ₹ in Crore

Sl. 2017-18 2018-19 SBU No. Consultancy EPC Consultancy EPC 1. Metal 203.99 2.41 183.41 2832.12 2. Energy 206.71 Nil 72.11 Nil 3. Infrastructure 122.57 467.76 104.11 Nil Total (₹) 533.27 470.17 359.63 2832.12 Grand Total (₹) 1,003.44 3,191.75 4.0. INTERNAL CONTROL SYSTEMS AND ADEQUACY THEREOF Your Company not only has a proper and adequate system of internal control and proper documented procedure encompassing all financial and operating functions but also a history and tradition bequeathed since inception. These have been planned to provide reasonable accuracy for maintenance of proper accounting and adequate control to monitor and to govern the company’s fund, to optimize internal resources for increasing operational efficiency, to secure assets from unauthorized use and to ascertain reliance on financial and all other operational information. The company has undertaken unified untiring team effort to achieve the best possible state-of-the art system. Salient facets of the internal control system are: ¾¾ An in-house internal audit team is responsible for reviewing the established internal control systems at place within the organization. To maintain its objectivity and independence, the Internal Audit Section reports directly to the Chairman and Managing Director. ¾¾ The company has an extensive programme of carrying out internal audits, management and financial reviews to ensure greater efficiency, transparency and accountability. ¾¾ Quarterly Internal Audit reports comprising of significant audit observations and follow-up actions thereon are placed before the Audit Committee for their consideration and review. ¾¾ Well defined delegation of power with sanctioning limits for purchasing of capital items and approving of revenue expenditure. ¾¾ Well planned budget for capital & revenue expenditure and continuous monitoring. ¾¾ Well defined Purchase and Disposal Procedure to carry out function of purchase encompassing various Government and CVC guidelines for in-house procurement as well as procurement of services and goods for executing EPC jobs and consultancy jobs. ¾¾ Well framed Establishment Manual and Service Rules to codify rules and policies governing service conditions of employees. ¾¾ Well codified Apex Quality Manual for ensuring quality of services provided and goods sold for executing EPC jobs. ¾¾ Periodical meeting at all functional levels and also at corporate level for reviewing and achieving the targeted results. ¾¾ With implementation of online information system starting from raising of invoices to collection of money, the entire system has been made more effective in terms of furnishing factual information in shortest possible time. ¾¾ Well defined plan to invest surplus fund most judicially and reporting thereof to the Apex management regularly. 57 MECON

5.0 DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the Financial Year 2018-19, your company achieved Turnover of ₹47,017.24 lakh. Turnover from Consultancy Jobs is ₹37,612.12 lakh, mainly from execution of consultancy order for GAIL, NMDC, different Steel Plants of SAIL, etc. Turnover from Consultancy Jobs constituted 80.00% of the total turnover and turnover from Turnkey Projects constituted 20.00% of total turnover. Total turnover has increased by 5.48% over the previous year. During the year 2018-19 the company has made Profit After Tax of ₹1,374.01 lakh compared to Profit After Tax of ₹5,802.33 lakh of the previous year. During the Financial Year 2018-19, the company has earned interest of ₹3,770.76 lakh through term deposits with scheduled banks. The Net Worth of the company has increased by ₹13,621.25 lakh compared to previous year. The highlights of financial performance of the company for the financial year 2018-19 w.r.t. 2017-18 are mentioned below. (₹in lakh) Sl. FY FY Particulars No. 2018-19 2017-18 # a) Turnover 47,017.24 44,572.62 b) Revenue From Operations 47,920.36 48,037.08 c) Total Income 53,040.05 58,962.03 d) Purchase of Equipments & Direct Expenses 9,070.36 13,768.34 e) Employee Benefit Expenses 28,822.45 31,387.78 f) Other Expenses 11,249.08 8,381.11 g) Profit / (Loss) Before Tax 997.44 4,401.83 h) Profit / (Loss) After Tax 1,374.01 5,802.33 i) Total Comprehensive Income 1,214.64 5,936.21 j) Property Plant & Equipments (Gross) 16,076.24 15,899.08 k) Intangible Assets (Gross) 1,509.81 1,459.00 l) Financial Assets (Current and Non Current) Investment 11.92 11.92 Trade Receivables 44,586.11 38,597.89 Loans 986.90 985.99 Cash and Bank Balance 54,142.29 58,282.60 Other Financial Assets (Excluding Bank Balance) 53,738.29 40,932.06 m) Other Assets (Current and Non Current) 10,317.79 8,511.92 n) Financial Liabilities (Current and Non Current) Trade Payables 18,655.13 20,030.10 Other Financial Liabilities (Current and Non 28,393.69 15,806.57 Current) o) Other Liabilities (Current and Non Current) 13,618.74 17,685.46 p) Net Worth 36,448.18 22,826.93 q) Share Capital 4,013.84 4,013.84 r) Capital Employed 25,696.12 12,940.91 # The Company has adopted Ind AS 115 from 1st April, 2018 and accordingly, financials for 2017-18 are restated. 6.0 HUMAN RESOURCE DEVELOPMENT The management lays emphasis to focus and sustain a competent and highly responsive workforce with adequate domain expertise. Projects being the centre of our delivery mechanism, workshops and trainings were arranged on Selection of Technology & Product Mix, Methodology of Contract Closure and Contemporary trends in Project Management. To bring about an overall development of our future leaders, to enable them to unleash potential for 58 MECON MECON Limited

necessary business impact along with technical capabilities augmentation, management organized training in Soft Skills, Personality and Senior Leadership Development program. With regards to Talent Management and Career Progression, employees were also deputed to various Centre of Excellences under MDP programs, technical programs and DPE’s Research development and Consultancy scheme such as Leadership and Enablers of achieving business excellence, Public Procurement through E- Procurement and GeM portal, IPMA level D certification Course, Managing Foreign Currencies Risk and Understanding Global Finance, HR Analytics, Mergers, Acquisitions and Restructuring, Training on Steel Making & Secondary Refining, Training on Welding Technology and Equipment, City Gas Distribution in India. Management always strives to focus towards development of its employees with the objective that they will lead the company through challenging environment and ensure sustained value creation. 7.0 TECHNOLOGICAL UP-GRADATION Through its 6 (six) decades of experience in the development and expansion of Integrated Steel Plants as well as other business verticals, MECON has been able to build a strong technological base and has acquired, absorbed & innovated state-of-the-art technologies to suit various requirements. Technological & Engineering excellence achieved through above process is up-graded on continuous basis during execution of various projects in association with industry leaders. License agreements and general collaboration/cooperation agreements with organisations sharing common business interests is providing an impetus for MECON to strengthen its business verticals by carving out market share. Such initiatives are complementing knowledge acquisition/up-gradation in addition to building-up database for focussed business areas with the aim to bridge the identified technology gaps. Measures adopted to work towards technology self-reliance include: ŠŠ Exposure to Global Technologies & Benchmarks ŠŠ Maximization of indigenization ŠŠ Exploring global partners for new/potential business areas ŠŠ Aligning internal resources to cater to new areas ŠŠ Engagement of domain experts to complement in-house expertise ŠŠ In-house Research & Development ŠŠ Need based training- both In-house & outside and participation in seminars/technology fairs ŠŠ Use of modern tools for analysis, design, modeling & drafting ŠŠ Cost effective operations achieved through higher reliance on state-of-the-art software tools 8.0 CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY DEVELOPMENT (CSR & SD) As per Section-135 of The Companies Act, 2013, Average Net Profit of your Company for the preceding three financial years (i.e. FYs 2015-16, 2016-17 & 2017-18) was Negative. Thus, as per the Act there was no allocation, as 2% of Average Net Profit was NIL. However, as per DPE Guidelines, 2% of Adjusted PBT for FY 2017-18 was allocated as CSR fund, i.e. ₹87.96 Lakh. Your Company has taken a forward step for the Basic Development needs (Creation of Basic Infrastructure - Potable Drinking water & Sanitation) and Healthcare projects in Adopted Villages of Ranchi & Khunti districts of Jharkhand and in Visakhapatnam, A.P., which are the Aspirational Districts (As identified by NITI Aayog). The various projects/ activities undertaken under its CSR & Sustainability Policy during FY 2018-19 are given in Appendix-I to the Director’s Report. Keeping pace with the Govt. of India’s Mission of Swachh Bharat, the Company has carried out various activities/ programmes for highlighting the benefits of Swachhata. Awareness programme & Cleanliness drive under “Swachh Bharat Abhiyan” were carried-out in Adopted Villages under the following heads: ŠŠ “Swachhta Hi Sewa” Campaign ŠŠ “Swachhta Pakhwada” Campaign The Management of your Company always lay thrust upon timely completion of the CSR projects/ activities so that its benefit is passed on to the end user. Moreover the Management also lays emphasis, that regular on-going schemes such as Free Literacy programme in Community Education Centres, Free Stitching Training under Women Empowerment Scheme, Free Health Camps through Mobile Ambulance Van etc. shall also be continued to keep CSR & Sustainability activity of the Company alive even when there is less or no allocable budget available. 59 MECON

ANNEXURE-III CORPORATE GOVERNANCE

1.0 COMPANY’S PHILOSOPHY The Company’s Corporate Governance practice is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to values that governs relationship with all its stakeholders and attaining maximum level of enrichment of the enterprise. The said practice of Corporate Governance stem from its professionalism. Your Company lays emphasis on the proper conduct of its activities and enhance the value of all those who are associated with the Company viz. Shareholders, Customers, Vendors, Government of India, Ministry of Steel, Department of Public Enterprises, various State Governments, other Government Agencies/ Departments and the society at large. 2.0 BOARD OF DIRECTORS Your Company being a Central PSU, appointment / nomination of all Directors is done by the President of India through the Ministry of Steel. The Chairman and Managing Director and Functional Directors are appointed by the Government of India, Ministry of Steel for a period of five years or till the age of superannuation or until further orders whichever is earlier. Part-time Independent Directors are normally appointed for a tenure of three years. Articles of Association of the Company stipulate that the number of Directors shall not be less than five and not more than thirteen. The composition of the Board is as per DPE Guidelines on Corporate Governance. Composition of Board of Directors

Sl. Particulars of Directors Sanctioned Strength Actual position No as on 31.03.2019 i. Functional Directors including CMD (WTD) 5 5 ii. Part-time Government Directors 2 2 iii. Part-time Independent Directors 3 2* Total 10 9 (*) In December, 2018 two more Part-time Independent Directors were appointed by Government of India on the Board of the Company but only one responded and got inducted on the Board of the Company. 2.1 Terms & Conditions of appointment of Board Member: The terms, conditions and tenure of appointment of all Board Members are decided by the Government of India, Ministry of Steel. 2.2 Remuneration / Compensation to Board of Directors : The Chairman and Managing Director and Whole-time Directors are paid monthly remuneration as fixed by the Government of India. The Company bears all the expenditure of Directors for attending the meetings. Part-time Government Directors are not paid any remuneration. The Part-time Independent Directors are paid sitting fees of ₹ 15,000/- for attending each Board Meeting and ₹10,000/- for attending each Board level Committee meeting. The details of sitting fees paid to the Part-time Independent Director during F.Y 2018-19 are as follows.

Sitting Fees (₹) Name of Director (Shri) Total(₹) Board Meetings Committee Meetings

Sisir Kumar Appikatla 55,000/- 70,000/- 1,25,000/-

Deepak Krishan 15,000/- -- 15,000/-

2.3 Board Meetings: The Board meets statutorily and also as many times as may be warranted. The Board Meetings are convened as 60 MECON MECON Limited

per the Companies Act, 2013 by giving appropriate advance notice after seeking approval of the Chairman of the Board. Detailed agenda notes are circulated in advance as per the Companies Act, 2013 to the Board Members for facilitating meaningful, informed and focused decision at the meeting. In case of special and exceptional circumstances additional agenda item(s) is / are also permitted with the consent of Chairman of the Board. The Company Secretary acts as the Secretary to the Board and Board level Committee Meetings. 2.4 Number of Board Meetings: During the year 2018-19, Five (5) Meetings were held, the details of which are given below:

Sl. No. Date of Meeting Board Strength Number of Directors Present 1 19.07.2018 7 6 2 26.07.2018 8 7 3 25.10.2018 8 8 4 09.01.2019 8 7 5 19.03.2019 9 9 Particulars of the Directors including their attendance at the Board Meetings from 1st April, 2018 to 31st March, 2019.

Name of Directors & Designation Number of Meetings held Number of Meetings (Shri / Smt.) attended I. Whole time Directors Atul Bhatt , CMD Five Five P.K. Sarangi, Director (Technical) Five Five Goutam Chatterjee, Director (Commercial) Five Five Salil Kumar, Director (Projects) Five Five R.H. Juneja, Director (Finance) Five Five (appointed w.e.f 20.04.2018) II. Part-time Government Directors Saraswati Prasad, IAS Five Four Sunil Barthwal, IAS, Nil Nil (upto 24.05.2018) T. Srinivas Nil Nil (From 24.05.2018 to 16.07.2018) Rasika Chaube Four Three (w.e.f. 16.07.2018) III. Part-time Independent Director Sisir Kumar Appikatla Five Four Deepak Krishan (w.e.f 23.01.2019) One One

3.0 BOARD COMMITTEES 3.1 Audit Committee The latest reconstituted Audit Committee in place consists of two Part-time Independent Director and one whole- time Director. The role and powers of the Audit Committee is as per Section 177 of the Companies Act, 2013 as well as the Guidelines on Corporate Governance issued by the Department of Public Enterprises. The Chairman of the Audit Committee is Part time Independent Director. The present Audit Committee in place comprises of the following Directors. 61 MECON

Sl. Name of Directors (Shri) Status in Committee No 1 Sisir Kumar Appikatla, Independent Director. Chairman 2 Deepak Krishan, Independent Director Member 3 R.H.Juneja, Director (Finance) Member Ravi Bambha, Company Secretary Secretary Number of Audit Committee Meetings During the year under review, Five (5) Meetings were held, the details of which are given below:

Sl. Date of Meeting Member’s Strength No. of Members Present No 1 26.07.2018 Three Three 2 25.10.2018 Three Three 3 12.11.2018 Three Three 4 09.01.2019 Three Three 5 19.03.2019 Three Three Particulars of the Directors including their attendance at the Audit Committee Meetings from 1st April, 2018 to 31st March, 2019

Number of Number of Meetings Name of Directors Period Meetings held attended Shri Sisir Kumar Appikatla, 01.04.2018 to Five Five Independent Director & Chairman. 31.03.2019 Shri Goutam Chatterjee, 01.04.2018 to Five Five Director (Commercial) & Member. 31.03.2019 Shri R.H.Juneja, 19.07.2018 to Five Five Director (Finance) & Member 31.03.2019 (w.e.f. 19.07.2018) 3.2 Nomination and Remuneration Committee With the appointment of Shri Deepak Krishan as Part-time Independent Director on the Board of MECON and considering the earlier appointment of Shri Sisir Kumar Appikatla as Part-time Independent Director, the Board has approved constitution of Nomination and Remuneration Committee comprising of following members:-

Sl. No Name of Directors (Shri/ Smt.) Status in Committee 1 Deepak Krishan, Independent Director. Chairman 2 Sisir Kumar Appikatla, Independent Director Member 3 Rasika Chaube, Government Director Member 4 Atul Bhatt, Chairman and Managing Director Member Ravi Bambha, Company Secretary Secretary 3.3 Corporate Social Responsibility (CSR) and Sustainability Committee In compliance of the provisions of Section 135 of the Companies Act, 2013 read with Guidelines on Corporate Social Responsibility and Sustainability issued by the Department of Public Enterprises, a Board level CSR & Sustainability Committee was constituted. The role and functions of the CSR & Sustainability Committee is as per Companies (Corporate Social Responsibility Policy) Rules 2014. The present CSR & Sustainability Committee in place comprises of the following Directors. 62 MECON MECON Limited

Sl. Name of Directors (Shri) Status in Committee No. 1 Sisir Kumar Appikatla, Independent Director Chairman 2 P.K. Sarangi, Director (Technical) Member 3 R.H. Juneja, Director (Finance) Member Ravi Bambha, Company Secretary Secretary

Number of CSR & Sustainability Committee Meetings: During the year under review, Two (2) Meeting were held, the details of which are given below:

Sl. No Date of Meeting Member’s Strength No. of Members Present 1 26.07.2018 Three Three 2 19.03.2019 Three Three

Particulars of the Directors including their attendance at the CSR & Sustainability Committee Meeting.

Number of Meetings Number of Meetings Name of Directors Period held. attended. Shri. Sunil Barthwal, IAS, Government 01.04.2018 to Nil Nil Director & Chairman. 24.05.2018 Shri. T. Srinivas, Government Director 25.06.2018 to Nil Nil & Chairman 16.07.2018 Shri. Sisir Kumar Appikatla, 01.04.2018 to Two Two Independent Director & Chairman, 31.03.2019 w.e.f. 19.07.2018 Shri. P.K. Sarangi, 01.04.2018 to Two Two Director (Technical) & Member 31.03.2019 Shri. R.H.Juneja, 19.07.2018 to Two Two Director (Finance) & Member 31.03.2019

3.4 Part time Independent Directors Meeting Your Company had only one Independent Director on its Board and thus no meeting of Independent Director was carried out. Recently, the Government appointed another Independent Director, raising the strength to two. Now, your Company shall explore the possibility of holding atleast one meeting of the Independent Directors as specified under sub- paragraph (1) of paragraph (VII) of Schedule IV to the Companies Act, 2013. 4.0 ANNUAL GENERAL MEETING The details of the last three Annual General Meeting of the company are as follows:-

Year Date Time Venue

2015-16 22nd Aug., 2016 2.00 P.M Board Room, MECON Office, 13th Floor, SCOPE Minar, Laxmi Nagar, Delhi - 110092.

2016-17 21st Sept.,2017 12.00 Noon OUDH Conference Hall, Hotel Ashok, Chanakyapuri, New Delhi.

2017-18 20th Sept., 2018 2.30 P.M OUDH Conference Hall, Hotel Ashok, Chanakyapuri, New Delhi.

63 MECON

5.0 DISCLOSURES: 5.1 Declaration of independence by Independent Director In compliance of Sec 134(3)(d) of the Companies Act, 2013 the Company has obtained declaration of independence from the Independent Director for the F.Y 2018-19 under Section 149(6) of the Companies Act, 2013. 5.2 Related party transactions There are no ‘materially significant related party transactions’ that may have a potential conflict with the interest of Company at large. The details of Related Party Disclosure as per Ind. AS-24 is disclosed under Note 40.11 of the Financial Statement. 5.3 Disclosure of accounting treatment All applicable Indian Accounting Standards issued by the Institute of Chartered Accountants of India are being followed in the preparation of financial statements. The Significant Accounting Policy of the Company is disclosed under Note 2 of the Financial Statement. 5.4 Compliance Certificate A certificate on compliance of applicable laws is placed before the Audit Committee and Board on quarterly basis. 5.5 Code of Conduct The Board of Directors has laid down Code of Business Conduct and Ethics for the Board Members and Senior Management of the Company. The Code is displayed on the website of the Company. All Board Members and Senior Management officials of the company have affirmed their compliance with the code. 6.0 MEANS OF COMMUNICATION Annual Report containing Chairman’s Speech, Directors’ Report, Management Discussion and Analysis Report, Corporate Governance Report, Auditor’s Report, Audited Accounts and other important information are made available on the website of the Company. 7.0 TRAINING OF BOARD MEMBERS Directors are being nominated, as and when required for the training programme organized by DPE, SCOPE etc. 8.0 WHISTLE BLOWER POLICY The Company has Whistle Blower Policy in accordance with the requirement of Section 177(9) of the Companies Act, 2013 and the same is uploaded on the website of the Company. It is also affirmed that no employee has been denied access to the Audit Committee.

64 MECON MECON Limited INDEPENDENT AUDITORS’ REPORT To The Members of MECON LIMITED Report on the Audit of the Standalone Financial Statements. Opinion We have audited the accompanying standalone financial statements of MECON LIMITED (“the Company”) which comprises the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss (including other comprehensive Income ), the Statement of Changes in Equity and the Statement of Cash Flows for year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”). In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with Indian Accounting Standard prescribed under section 133 of the Act read with the Companies ( Indian Accounting Standards ) Rule, 2015 as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31st, 2019, the profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date. Basis for Opinion We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements. Emphasis of Matter We draw attention to the following matters in the notes to the Standalone Financial Statements: a) Note No. 40.28 with respect to appeal filed by the Company with the Hon’ble High Court of Jharkhand in the matter of Arbitral award pronounced against the company and the related disclosure of contingent liability as mentioned in the said note. b) Note No. 40.27 with respect to appeal filed by the company with the Hon’ble Principal District Court, Cuddlore in the matter related to recovery of advance against the bank guarantee. c) Note No. 40.26 with respect to non provision for pay revision of executive employees w.e.f 01.01.2017 considering the DPE OM dated 03.08.2017 and the financial status of the Company. d) Note No. 40.15(g) with respect to the effect of change in accounting policy due to adoption of Ind AS 115, the retained earning has increased by ₹13,485.57 Lakhs and consequent increase in assets and liabilities by ₹5,739.40 Lakhs. However there is no material effect on the current year’s profit. Our opinion is not modified in respect of these matters. Key Audit Matters Key Audit matters are those matters that in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our reports. 65 MECON

Sl. Key Audit Matters Audit Response on Key Audit Matter No 1. Recognition and Measurement of revenue Our audit procedures on adoption of Ind AS 115, Revenue from contracts with Customers (‘Ind AS 115’), The Company has adopted Ind AS 115, Revenue the new standard on revenue recognition, include the from Contracts with Customers (‘Ind AS 115’), following – the new standard on revenue recognition. • Evaluated the design and implementation of The application and transition to this accounting the processes and internal controls relating to standard is complex and is an audit focus area. implementation of the new revenue recognition The revenue standard establishes a standard. comprehensive framework for determining • Evaluated the detailed analysis performed whether, how much and when revenue should by management across revenue streams by be recognized. This involves certain key selecting samples for the existing contracts with judgments relating to identification of distinct customers and verified the appropriateness of performance obligations, determination of the identification of distinct performance obligations, transaction price, allocation of the transaction determination of the transaction price, allocation price to identified performance obligations, and of the transaction price to identified performance the appropriateness of the revenue recognition obligations and the appropriateness of the revenue methodology. Additionally, the standard recognition methodology. mandates robust disclosures in respect of revenue and periods over which the remaining • Evaluated the appropriateness of the adjustments performance obligations will be satisfied recorded by management as at 1st April, 2018 to subsequent to the balance sheet date. transition to the new revenue standard, using the modified retrospective approach. Refer: Notes 2 (8) to the Standalone Financial Statement of Accounting Policy on Revenue • Evaluated the appropriateness of the accounting Recognition. policy and disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures. Information Other than the Standalone Financial Statements and Auditor’s Report Thereon The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the standalone financial statements and our auditor’s report thereon. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibility of Management and those Charged with Governance for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act 2013 (“the Act”) read with the relevant rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates 66 MECON MECON Limited

that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone financial statements, the management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibility for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: ŠŠ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ŠŠ Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial control system in place and the operating effectiveness of such controls. ŠŠ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. ŠŠ Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. ŠŠ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements. We also communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 67 MECON

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure “A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. 2. As required by section 143(5) of the Act, the Comptroller and Auditor General of India Issued Directions and sub-directions. We give our comment thereon vide Annexure “B”. 3. As required by Section 143(3) of the Act, we report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c. The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under. e. In terms of Govt. of India, Department of Companies affairs Notification No. GSR 463(E) dated 5thJune 2015, Govt. Company is exempt from applicability of provision of section 164(2) of the Companies Act 2013. f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure “C”. g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended) , in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 38.1 to the standalone financial statements. ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses if any, on long-term contracts and the Company did not have any derivative contracts. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For V. Rohatgi & Co Chartered Accountants Firm Registration No: 000980C

Sd/- (Praveer Ranjan) Place: Ranchi Partner Dated: 11th September, 2019 M.NO : 076295 UDIN: 19076295AAAAAB1433 68 MECON MECON Limited “Annexure A” to the Independent Auditors’ Report of even date on Standalone Financial Statements of MECON LIMITED

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section) (i) In respect of its fixed assets: a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets except in respect of some cases wherein the fixed assets register and records are in the process of updation. b) The fixed assets of the Company have been physically verified by the management. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its business. c) The title deeds of the Immovable Properties are held in the name of the Company as certified by the management except Deed of conveyance of Land at Ranchi, measuring 10.25 acres, valued for ₹ 2.69 lakhs, which is pending since long for execution by the Government of Jharkhand. The office building at Scope Minar, Delhi have been acquired on contribution basis without ownership title deed. (ii) In respect of physical verification of Inventory: a) The inventories have been physically verified by the management during the year. b) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of its business. c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory. No material discrepancies have been noticed on verification between the physical stocks and the book records. (iii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence clause (a) to (b) is not applicable to the Company. (iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and guarantees and not made any investments in respect of Section 185 & 186 of the Companies Act 2013. (v) In our opinion and according to the information and explanations given to us, the Company has not accepted any public deposits during the year hence clause (v) is not applicable to the Company. Accordingly the directives issued by the RBI and provisions of Sections 73 to 76 or any other relevant provisions of the Act and rules framed there under are not applicable. (vi) According to the information given to us, the Central Government has not prescribed maintenance of cost records under section 148(1) of the Act. (vii) According to the information and explanations given to us in respect of statutory and other dues: a) The Company has generally been regular in depositing undisputed statutory dues, in respect of Provident Fund, Employee’s State Insurance, Income-tax, Goods & Service Tax, Customs duty, Excise Duty, Cess and other material Statutory dues with the appropriate authorities. b) According to the information and explanations given to us, there are no undisputed statutory dues outstanding for a period of more than six months from the date they became payable, as per books of accounts as at 31st March, 2019. c) According to the information and explanations given to us, there are disputed statutory dues, which have not been deposited as at 31st March 2019, as given herein below: 69 MECON

Period to Amount Name of the Statute Forum which relates (₹ in Lakhs) 1999-2000 STAT, Andhra Pradesh. 4.41 2000-2001 STAT, Andhra Pradesh 101.40 2001-2002 Andhra Pradesh. High Court 450.88 1995-1996 Commissioner of Commercial Taxes, Ranchi 258.12 1999-2000 Commissioner of Commercial Taxes, Ranchi 24.51 2001-2002 Commissioner of Commercial Taxes, Ranchi 49.47 2002-2003 Commissioner of Commercial Taxes, Ranchi 106.62 2009-2010 Jharkhand Commercial Tax Tribunal 27.66 1993-1994, 1994-1995 & JCCT(Appeal), Dhanbad 0.67 1996-1997 2005-2006 Commissioner of Commercial Taxes, Ranchi 78.50 2008-2009 Commissioner of Commercial Taxes, Ranchi 20.61 Central Sales Tax Act & Sales Joint Commissioner of Comm. Taxes, (Appeal), 1996-1997 1.92 Tax Acts of various states Jamshedpur *1994-1995 Jharkhand Sales Tax Tribunal 219.10 *2003-2004 Additional Commissioner, Kolkata 16.47 2006-2007 Jharkhand Commercial Tax Tribunal (Appeal) 9.76 2007-2008 Jharkhand Commercial Tax Tribunal (Appeal) 26.16 2010-2011 Commissioner of Commercial Taxes, Ranchi 217.29 2011-2012 Commissioner of Commercial Taxes, Ranchi 535.81 2011-2012 Commissioner of Commercial Taxes, Ranchi 0.016 2011-2012 Jt. Comm. (Appeals), Sundergarh, Rourkela 206.39 1997-1998 Commissioner of Sales Tax, Cuttack 46.51 2013-2014 Appellate Dy. Commissioner, Vijaywada 16.09 2013-2014 Jt. Commissioner (Appeal), Durg 0.31 2014-2015 Appellate Additional Commissioner, Raipur 14.77 Central Excise Act, 1944 2018-2019 CESTAT, Kolkata 200.00 Commissioner Appeal, CGST & Central Excise Service Tax 2018-2019 30.65 Ranchi Employees Provident Fund 2003-2004 EPF, Appellate Tribunal, New Delhi 229.70 and Misc. Provisions Act 1952 Income Tax Act 2000-2001 Income Tax Appellate Tribunal, Ranchi 178.17 Income Tax Act 2002-2003 CIT (A), Ranchi 105.54 Income Tax Act 2010-2011 CIT (A), Ranchi 79.42 Income Tax Act 2011-2012 CIT (A), Ranchi 96.32 Income Tax Act 2012-2013 Income Tax Appellate Tribunal, Ranchi 116.35 Income Tax Act 2013-2014 Income Tax Appellate Tribunal, Ranchi 205.80 Out of the above income tax dispute of ₹781.60 lakhs consisting of ₹497.89 lakhs has already been adjusted against refund. Out of the above disputed statutory dues, in the two cases marked *, provision has been made in the books of accounts under “Provision for Disputed cases –sales tax matter.” It is also informed that the Company has deposited ₹445.90 Lakhs towards the statutory disputed cases, out of which ₹194.81 Lakhs pertain to the statutory disputed cases listed above. The Balance ₹251.09 Lakhs relates to

70 MECON MECON Limited

disputed cases which have been set aside by the authorities. viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the year. ix) According to the information and explanations given by the management and the audit procedures performed, the company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loan during the year. x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud by the Company or any fraud on the Company by its officers and employees has been noticed or reported during the year. xi) As per notification GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Company. Accordingly paragraph 3(xi) of the order is not applicable to the Company. xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore the provisions of Clause 3 (xii) of the Order are not applicable to the Company. xiii) In our opinion and according to the information and explanations given to us, all transactions with the Related Parties are in compliance with Section 177 & 188 of the Act and the details have been disclosed in the Financial Statements as required by the applicable accounting standards. xiv) According to the information and explanations given to us and based upon the audit procedure performed, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company. xv) According to the information and explanations given to us and based upon the audit procedure performed, the Company has not entered into any non cash transactions with the Directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company. xvi) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For V. Rohatgi & Co Chartered Accountants Firm Registration No: 000980C

Sd/- (Praveer Ranjan) Place: Ranchi Partner Dated: 11th September, 2019 M.NO : 076295 UDIN: 19076295AAAAAB1433

71 MECON

“Annexure B” to the Independent Auditors’ Report of even date on Standalone Financial Statements of MECON LIMITED for the year 2018-19.

Directions under section143(5) of Companies Act, 2013 referred to in paragraph 2 of our report

Sn Question Reply 1. Whether the Company has system in place to process As per the information and explanations given to all the accounting transactions through IT system? us, the Company has a system in place to process all the accounting transactions through IT system. If yes, the implications of processing of accounting transactions outside IT system on the integrity of the The main area covered are financial accounting, accounts along with the financial implications, if any payroll, sales, GST, job progress report. may be stated. Based on the audit procedures carried out and as per the information and explanations given to us, no accounting transactions have been processed/ carried outside the IT system. Accordingly, there are no implications on the integrity of the accounts. 2. Whether there is any restructuring of an existing loan Based on the audit procedures carried out and as or cases of waiver/write off of debts/loans/interest, per the information and explanations given to us, etc. made by a lender to the Company due to the there was no restructuring of existing loans or Company’s inability to repay the loan? cases of waiver/write off of debts/ loans/interest, etc. made by the lender to the Company due to the If yes, the financial impact may be stated. Company’s inability to repay the loan. 3. Whether funds received/receivable for specific Based on the audit procedures carried out and as per schemes from Central/State agencies were properly the information and explanations given to us, the accounted for/utilized as per its terms and conditions? funds received/receivable for specific schemes from Central/State agencies were properly accounted for/ List the cases of deviation. utilized as per the respective terms and conditions.

72 MECON MECON Limited “Annexure C” to the Independent Auditors’ report of even date on Standalone Financial Statements of MECON LIMITED.

Report on Internal Financial Controls over financial reporting under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of MECON LIMITED (“the Company”) as of 31st March, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial control system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statement for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the standalone financial statements.

73 MECON

Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2019, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For V. Rohatgi & Co Chartered Accountants Firm Registration No: 000980C

Sd/- (Praveer Ranjan) Place: Ranchi Partner Dated: 11th September, 2019 M.NO : 076295 UDIN: 19076295AAAAAB1433

74 MECON MECON Limited

COMPTROLLER AND AUDITOR GENERAL OF INDIA’s COMMENTS

The preparation of financial statements of MECON Limited for the year ended 31 March 2019 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 11 September 2019.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial statements of MECON Limited for the year ended 31 March 2019 under Section 143(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.

On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors’ report under Section 143(6)(b) of the Act.

For and on behalf of the Comptroller and Auditor General of India

(Indu Agrawal) Place : Ranchi Principal Director of Commercial Audit Date : 28th September, 2019 & Ex-officio Member, Audit Board, Ranchi.

75 MECON

BALANCE SHEET AS AT 31ST MARCH, 2019 (₹ in lakhs) PARTICULARS NOTE NO. AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 I. ASSETS (1) Non-Current Assets (a) Property, Plant and Equipment 3 6,951.80 7,392.44 7,916.45 (b) Capital Work-in-Progress 4 97.79 12.22 65.51 (c) Investment Property - - - (d) Other Intangible Assets 5 164.57 221.30 254.79 (e) Intangible Assets under Development - - - (f) Financial Assets i) Investments 6 11.92 11.92 511.92 ii) Trade Receivables 7 15,099.77 11,926.14 9,927.93 iii) Loans 8 228.81 232.31 347.31 iv) Other Financial Assets 9 - 15,340.50 7,305.92 19,476.29 1.02 10,788.18 (g) Deferred Tax Assets (Net) 10 8,240.12 7,619.02 5,031.27 (h) Other Non-Current Assets 11 2,048.42 878.62 1,018.29 (2) Current Assets (a) Inventories 12 145.91 148.47 153.21 (b) Financial Assets i) Investments - - - ii) Trade Receivables 13 29,486.34 26,671.75 17,862.72 iii) Cash and Cash Equivalents 14 730.17 2,891.01 233.10 iv) Other Bank Balances 15 53,412.12 48,085.67 55,982.94 v) Loans 16 758.09 753.68 566.96 vi) Other Financial Assets 17 8,153.36 92,540.08 1,336.26 79,738.37 1,463.86 76,109.58 (c) Current Tax Assets (Net) 18 9,706.90 7,727.66 8,545.51 (d) Other Current Assets 19 8,269.37 7,633.30 4,974.31 TOTAL ASSETS 143,505.46 130,847.69 114,857.10 II. EQUITY AND LIABILITIES (A) EQUITY (a) Equity Share Capital 20 4,013.84 4,013.84 4,013.84 (b) Other Equity 21 30,032.11 34,045.95 16,570.23 20,584.07 10,634.02 14,647.86 (B) LIABILITIES (1) Non-Current Liabilities (a) Financial Liabilities i) Borrowings - - - ii) Trade Payables 22 (A) Total outstanding dues of micro 1,279.31 1,256.40 1,032.15 enterprises and small enterprises (B) Total outstanding dues of creditors other 5,828.73 6,249.79 6,202.25 than micro enterprises and small enterprises iii) Other Financial Liabilities 23 928.45 8,036.49 883.33 8,389.52 4,964.92 12,199.32 (b) Provisions 24 40,641.10 38,050.17 33,354.16 (c) Deferred Tax Liabilities (Net) 10 - - - (d) Other Non-Current Liabilities 25 2,356.03 4,241.00 4,366.89 (2) Current Liabilities (a) Financial Liabilities i) Borrowings - - - ii) Trade Payables 26 (A) Total outstanding dues of micro 2,549.04 2,762.35 1,479.42 enterprises and small enterprises (B) Total outstanding dues of creditors other 8,998.05 9,761.56 11,298.34 than micro enterprises and small enterprises iii) Other Financial Liabilities 27 27,465.24 39,012.33 14,923.24 27,447.15 8,169.15 20,946.91 (b) Other Current Liabilities 28 11,262.71 13,444.46 10,893.67 (c) Provisions 29 8,150.85 18,691.32 18,448.29 (d) Current Tax Liabilities (Net) 18 - - - TOTAL EQUITY AND LIABILITIES 143,505.46 130,847.69 114,857.10 Note No.1 to 40 form an integral part of Financial Statements In terms of our report of even date For V. ROHATGI & CO. CHARTERED ACCOUNTANTS Sd/- Sd/- Sd/- Sd/- Sd/- (PRAVEER RANJAN) (RAVI BAMBHA) (S. SAMANTA) (R. H. JUNEJA) (ATUL BHATT) PARTNER COMPANY SECRETARY DY. GENERAL DIRECTOR (FINANCE) CHAIRMAN and Memb.No.076295 MANAGER I/C MANAGING DIRECTOR Firm Regn. No.000980C (FINANCE) Place : Ranchi Date : 11th September, 2019 UDIN : 19076295AAAAAB1433 76 MECON MECON Limited

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2019 (₹ in lakhs) PARTICULARS NOTE NO. Current Year Previous Year

I. Revenue from Operations 30 47,920.36 48,037.08 II. Other Income 31 5,119.69 10,924.95 III. TOTAL INCOME (I+II) 53,040.05 58,962.03 IV. EXPENSES: (a) Purchases of Equipments & Direct Expenses 32 9,070.36 13,768.34 (b) (Accretion)/Decretion to Jobs-in-Progress 33 1,992.28 (78.40) (c) Employee Benefits Expenses 34 28,822.45 31,387.78 (d) Finance Costs 35 142.11 165.91 (e) Depreciation and Amortisation Expenses 36 766.33 935.46 (f) Other Expenses 37 11,249.08 8,381.11 TOTAL EXPENSES (IV) 52,042.61 54,560.20

V. Profit/(Loss) before exceptional items and tax (III-IV) 997.44 4,401.83 VI. Exceptional Items — – VII. Profit/(Loss) before tax (V-VI) 997.44 4,401.83 VIII. Tax Expense: (a) Current Tax 1,588.12 1,187.25 (b) Deferred Tax (1,964.69) (2,587.75) (c) Taxes relating to Earlier Years - - IX. Profit/(Loss) for the year (VII-VIII) 1,374.01 5,802.33 X. Other Comprehensive Income (a) Items that will not be reclassified to Profit and Loss Re-measurement of Defined Benefit Plans (203.14) 133.88 (b) Income tax relating to items that will not be reclassified to Profit and Loss

Re-measurement of Defined Benefit Plans 43.77 - XI. Total Comprehensive Income for the year (IX+X) 1,214.64 5,936.21 XII. Earnings per equity share (Face Value ` 10/- each) 40.13 Basic & Diluted (`) 3.42 14.46 Note No.1 to 40 form an integral part of Financial Statements In terms of our report of even date For V. ROHATGI & CO. CHARTERED ACCOUNTANTS Sd/- Sd/- Sd/- Sd/- Sd/- (PRAVEER RANJAN) (RAVI BAMBHA) (S. SAMANTA) (R. H. JUNEJA) (ATUL BHATT) PARTNER COMPANY SECRETARY DY. GENERAL DIRECTOR (FINANCE) CHAIRMAN and Memb.No.076295 MANAGER I/C MANAGING DIRECTOR Firm Regn. No.000980C (FINANCE) Place : Ranchi Date : 11th September, 2019 UDIN : 19076295AAAAAB1433

77 MECON

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH 2019

A. EQUITY SHARE CAPITAL (₹ in lakhs) Changes in Equity Balance as at 31st Balance as at 31st Particulars Share Capital March, 2018 March, 2019 during the year Equity Share Capital 4,013.84 - 4,013.84 B. OTHER EQUITY (₹ in lakhs) Other Reserves and Surplus Comprehensive Income Particulars TOTAL Capital Re measurement CSR Activity General Retained Redemption of Defined Benefit Reserve $$ Reserve Earnings Reserve $ Plans Balance as at 1st April, 2017 6,300.00 15.25 9,852.39 (3,156.88) (2,376.74) 10,634.02 Net Profit / (Loss) during the period - - - 5,802.33 - 5,802.33 Remeasurement of gains / (losses) on Defined Benefit Plans - - - - 133.88 133.88 Dividend on Equity Shares ------Dividend Distribution Tax ------Transferred from Retained Earnings during the period ------Transferred to Retained Earnings during the period - (15.25) - - - (15.25) Transferred from CSR Activity Reserve during the priod - - - 15.25 - 15.25 Transferred to CSR Activity Reserve during the period ------Transferred to General Reserve ------Adjusted / written back on Revaluation Reserve ------Balance as at 31st March, 2018 6,300.00 - 9,852.39 2,660.70 (2,242.86) 16,570.23 Adjustment due to Ind AS Implementation - - - 13,485.57 - 13,485.57 Net Profit / (Loss) during the period - - - 1,374.01 - 1,374.01 Remeasurement of gains / (losses) on Defined Benefit Plans - - - - (159.37) (159.37) Dividend on Equity Shares - - - (1,027.19) - (1,027.19) Dividend Distribution Tax - - - (211.14) - (211.14) Transferred from Retained Earnings during the period - 87.96 - - - 87.96 Transferred to Retained Earnings during the period - (16.92) - - - (16.92) Transferred from CSR Activity Reserve during the period - - - 16.92 - 16.92 Transferred to CSR Activity Reserve during the period - - - (87.96) - (87.96) Transferred to General Reserve - - - - - – Adjusted / written back on Revaluation Reserve - - - - - – Balance as at 31st March, 2019 6,300.00 71.04 9,852.39 16,210.91 (2,402.23) 30,032.11 $ As per provisions of the Companies Act, the Company has created Capital Redemption Reserve on redemption of 6,30,00,000 5% Non Cumulative Redeemable Preference Shares of `10/- each out of available profits. The Capital Redemption Reserve Account shall be utilised as per provisions of the Act. $$ As per provisions of the Companies Act, the Company has transferred / appropriated necessary CSR amount from Surplus to CSR Activity Reserve Account which is utilised by the Company for CSR Project / Activities, etc. Note No.1 to 40 form an integral part of Financial Statements In terms of our report of even date For V. ROHATGI & CO. CHARTERED ACCOUNTANTS Sd/- Sd/- Sd/- Sd/- Sd/- (PRAVEER RANJAN) (RAVI BAMBHA) (S. SAMANTA) (R. H. JUNEJA) (ATUL BHATT) PARTNER COMPANY SECRETARY DY. GENERAL DIRECTOR (FINANCE) CHAIRMAN and Memb.No.076295 MANAGER I/C MANAGING DIRECTOR Firm Regn. No.000980C (FINANCE) Place : Ranchi Date : 11th September, 2019 UDIN : 19076295AAAAAB1433 78 MECON MECON Limited

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2019 (Indirect Method) (₹ in lakhs) 2018-19 2017-18

Cash Flows from Operating Activities

Net Profit/(Loss) before Taxation 997.44 4,401.83

Add : Adjustments for

Depreciation & Amortisation 766.33 935.46

Loss on Sale/Disposal of Fixed Assets 0.17 2.02

Provision for Bad & Doubtful Trade Receivables / ECL 2,644.03 651.96

Provision for impairment in the value of Investments - 500.00

Other Provisions 2,438.20 926.98

Finance Costs 142.11 165.91

5,990.84 3,182.33

Less : Adjustments for

Profit on Sale/Disposal of Fixed Assets 5.16 0.69

Interest Income 3,770.82 3,872.74

Dividend Received 1.60 1.60

3,777.58 3,875.03

Operating Profit/(Loss) before Working Capital Changes 3,210.70 3,709.13

Add : Adjustments for

(Increase) / Decrease in Inventories 2.56 4.74

(Increase) / Decrease in Trade Receivables (9,025.60) (11,459.20)

(Increase) / Decrease in Loans (174.85) (144.82)

(Increase) / Decrease in Other Current Financial Assets 2,655.02 127.60

(Increase) / Decrease in Tax Assets (3,523.59) (369.40)

(Increase) / Decrease in Other Non-Financial Assets (2,424.83) (2,870.87)

Increase / (Decrease) in Trade Payables (1,374.98) 17.94

Increase / (Decrease) in Financial Liabilities 4,149.15 2,242.11

Increase / (Decrease) in Provisions 3,090.36 5,072.92

Increase / (Decrease) in Non-Financial Liabilities (2,766.69) 2,352.96

(9,393.45) (5,026.02)

Cash Generated from Operations (6,182.75) (1,316.89)

Less : Taxes Paid - -

Net Cash from Operating Activities {A} (6,182.75) (1,316.89)

79 MECON

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2019 (Indirect Method) (Contd.)

(₹ in lakhs)

2018-19 2017-18

Cash Flows from Investing Activities

Purchase of Property, Plant & Eqpt. and Intangible (371.18) (329.28) Assets Property, Plant & Eqpt. and Intangible Asset sold/ 21.64 3.28 discarded (Increase) / Decrease in Deposits with Bank 2,440.41 154.10

Interest Received 3,309.88 4,311.01

Dividend Received 1.60 1.60

Net Cash from Investing Activities {B} 5,402.35 4,140.71

Cash Flows from Financing Activities

Dividend including Dividend Tax Paid (1,238.33) -

Finance Costs (142.11) (165.91)

Net Cash from Financing Activities {C} (1,380.44) (165.91)

Net Increase/(Decrease) in Cash & Cash Equivalent {A}+{B}+{C} (2,160.84) 2,657.91

Cash and Cash Equivalent at the beginning 2,891.01 233.10

Cash and Cash Equivalent at the end 730.17 2,891.01

Note No.1 to 40 form an integral part of Financial Statements

Cash & Cash Equivalent represents

i) Cash at Bank (Current A/c & Flexi Deposit A/c) 724.61 2,882.19

ii) Cheques & Drafts on hand - -

iii) Cash & Stamps on hand 5.56 8.82 730.17 2,891.01

In terms of our report of even date For V. ROHATGI & CO. CHARTERED ACCOUNTANTS Sd/- Sd/- Sd/- Sd/- Sd/- (PRAVEER RANJAN) (RAVI BAMBHA) (S. SAMANTA) (R. H. JUNEJA) (ATUL BHATT) PARTNER COMPANY SECRETARY DY. GENERAL DIRECTOR (FINANCE) CHAIRMAN and Memb.No.076295 MANAGER I/C MANAGING DIRECTOR Firm Regn. No.000980C (FINANCE) Place : Ranchi Date : 11th September, 2019 UDIN : 19076295AAAAAB1433

80 MECON MECON Limited NOTE 1 : CORPORATE AND GENERAL INFORMATION

MECON LIMITED (“the Company”) is India’s frontline Consultancy, Engineering & EPC Solution provider across sectors, with extensive capabilities in Steel Industry. The Company, a wholly owned Government of India Enterprise under Ministry of Steel, that was incorporated on 31st March, 1973 and is domiciled in India. The Company has its registered office situated at Vivekananda Path, Doranda, Ranchi – 834002, Jharkhand, India. The Company operates in three major segments, namely, Metals, Energy & Infrastructure. These financial statements for the period ended 31st March, 2019 were approved for issue by the Board of Directors of the Company in their meeting held on 6th September, 2019.

NOTE 2 : SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS 1.1 Statement of Compliance The financial statements are prepared in accordance with generally accepted accounting principles in India, Indian Accounting Standards as notified / amended from time to time, provisions of the Companies Act, 2013 / 1956 and relevant rules as applicable. 1.2 Basis of Measurement The financial statements are prepared on a going concern basis and on accrual basis of accounting under the historical cost concept except as otherwise mentioned in the policy. 1.3 Functional and Presentation Currency The amounts in financial statements and notes are presented in Indian Rupees (INR) (₹) which is the functional currency of the Company. All financial information presented in INR (₹) has been rounded off to the nearest INR ₹ in lakhs with two decimal places, except as otherwise stated. 1.4 Use of Estimates and Management Judgment In preparing the financial statements in conformity with accounting principles generally accepted in India, Indian Accounting Standards as notified / amended from time to time, provisions of the Companies Act 2013 / 1956 and relevant rules as applicable, the Company makes best estimates, assumptions and judgments that may affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities as at the reporting date and the amount of revenue and expenses during the reporting period. The estimates and judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual result in some cases may differ from such estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision of such estimates is recognised during the period in which the same is determined. In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are as follows: 1.4.1 Revenue The company recognizes revenue over time by measuring the progress towards satisfaction of the performance obligation depending upon the nature / scope, etc. of job. 1.4.2 Defined Benefit Obligations Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increase and the inflation rate. However, any changes in these assumptions may have impact on the resulting calculations. 1.4.3 Provisions and Contingencies Assessments undertaken in recognizing provisions and contingencies have been made as per the best judgement based on the current information as available.

81 MECON

1.5 Current and Non-Current Classification 1.5.1 All items of assets and liabilities in the Balance Sheet are classified as Current and Non-current as per requirement of the Companies Act, 2013, as applicable. 1.5.2 Normal operating cycle of the company is considered 12 months keeping in view past experience and nature of business of the Company. 1.5.3 Trade Receivables (i.e. dues arising only from clients in the normal course of business) outstanding for a period exceeding six months is determined after taking into account 30 days normal credit period allowed by the Company. 1.5.4 Dues on account of goods purchased or services received in the normal course of business are treated as Trade Payables. 2. PROPERTY, PLANT AND EQUIPMENT 2.1 Recognition 2.1.1 Items of Property, Plant and Equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises any directly attributable costs net of tax / duty credit availed and includes borrowing costs which meet capitalization criteria, expenses incidental to acquisition, installation, etc. of bringing the items of Property, Plant and Equipment to the location and working condition for its intended use but excludes training, administration and overhead costs. 2.1.2 Deposits / payments / liabilities made towards compensation, rehabilitation, etc. relating to acquisition of land are treated as cost of land in the period in which they occur. 2.1.3 Items of major spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalised. Otherwise, they are classified as inventories in accordance with Ind AS – 2. 2.1.4 Items of Property, Plant and Equipment purchased during the year costing upto ₹1,000/- each item are charged to revenue. 2.1.5 The cost of any software purchased along with the computer hardware, being an integral part of the hardware, is capitalized along with the cost of the hardware. 2.1.6 Items of Property, Plant and Equipment held under finance lease are recognised as per Ind AS -17. 2.1.7 Advances paid towards the acquisition of Property, Plant and Equipment and outstanding at each Balance Sheet date are classified as “Capital Advances” under Non-Current Assets. 2.2 Subsequent Costs 2.2.1 Subsequent major expenditure on items of Property, Plant and Equipment fulfilling the criteria of recognition is recognised as an increase in the carrying amount of the items of Property, Plant and Equipment. 2.2.2 The costs of the day-to-day servicing of Property, Plant and Equipment are recognised as expenses in the Statement of Profit and Loss as and when they are incurred. 2.3. Derecognition 2.3.1 Items of Property, Plant and Equipment are derecognised on disposal or when no future economic benefits are expected from its intended use. Gains / losses on disposal of an item of Property, Plant and Equipment are determined by comparing the proceeds from disposal with the carrying amount of Property, Plant and Equipment, and are recognised in the Statement of Profit and Loss. 2.3.2 Items of Property, Plant and Equipment held for immediate sale in the present condition, their sale is highly probable and their carrying amount will be recovered principally through a sale transaction are classified separately as “Non-Current Assets Held for Sale” at the lower of their carrying amount and fair value less costs to sale. 82 MECON MECON Limited

2.4 Depreciation 2.4.1 Depreciation on Property, Plant and Equipment is commenced when it is available for intended use and is provided for under “Straight-Line Method”, considering residual value of 5% of the original cost of the Property, Plant and Equipment, over the useful life of the Property, Plant and Equipment in line with Schedule II of the Companies Act, 2013 and relevant rules as applicable. 2.4.2 Items of Property, Plant and Equipment costing above ₹1,000/- each item and up to ₹5,000/- each item are fully depreciated in the year of acquisition. 2.4.3 Items of Property, Plant and Equipment held under Finance Lease are depreciated as per Schedule II of the Companies Act, 2013. However, if there is no reasonable certainty that the Company (lessee) will obtain the ownership by the end of the lease term, the asset is fully depreciated over the lease term or its useful life, whichever is shorter. 2.4.4 Where cost of a part of an item of Property, Plant and Equipment is significant in relation to the total cost of the item and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately for computation of depreciation. 2.4.5 Depreciation on additions to / deductions from Property, Plant and Equipment during the year is charged on pro-rata basis from / up to the date on which the asset is available for use / disposed. 2.4.6 Depreciation on subsequent cost of an item of Property, Plant and Equipment capitalized is charged off prospectively over the remaining useful life of main item of Property, Plant and Equipment. 2.4.7 Depreciation on Property, Plant and Equipment which is declared idle or retired from active use, but not classified as held for sale in accordance with Ind AS – 105, is charged off over the remaining useful life of that Property, Plant and Equipment. 2.4.8 Depreciation on Property, Plant and Equipment is ceased at the earlier of, the date that the asset is classified as held for sale in accordance with Ind AS – 105 and the date that the asset is de-recognised. 2.5 Capital Work-In-Progress The cost of construction of Property, Plant and Equipments incurred till they are ready for their intended use are recognised as Capital Work-in-Progress. 3. INTANGIBLE ASSETS 3.1 Recognition 3.1.1 Expenditure incurred on acquisition of technical know-how, engineering materials, computer software (which is not an integral part of related hardware), etc. is treated as intangible asset. 3.1.2 Intangible assets that are acquired by the Company, which have finite useful lives, are recognised at cost. Subsequent measurement is done at cost less accumulated amortization and accumulated impairment losses, if any. Cost includes any directly attributable expenses necessary to make the assets ready for its intended use but excludes training, administration and overhead costs. 3.1.3 Expenditure incurred on research & development activities are accounted as expenses in the Statement of Profit and Loss. 3.2 Derecognition An intangible asset is derecognised when no future economic benefits are expected from their intended use or upon their disposal. Gains / losses on disposal of an item of intangible asset are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognised in the Statement of Profit and Loss. 3.3 Amortisation 3.3.1 Amortisation is commenced from the date the intangible asset is available for intended use. 3.3.2 Expenditure incurred on acquisition of software is amortised on straight line method over a period of five years or its license period, whichever is less. However, software individually costing upto ₹5,00,000/- each is fully amortised in the year of acquisition. 83 MECON

3.3.3 Expenditure incurred on acquisition of other intangible assets is amortised over a period of five years on straight line method. 4. BORROWING COST 4.1 Borrowing costs incurred by the Company which are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. 4.2 Other borrowing costs are recognised as expense in the period in which these are incurred. 5. IMPAIRMENT OF NON-FINANCIAL ASSETS The Company reviews the carrying amount of its non-financial assets, whenever circumstances indicate that the carrying amount of the asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognised is measured by the amount by which the carrying amount of the assets exceeds the higher of its fair value less costs to sell and its value in use. If it is found that some of the impairment losses already recognised need to be reversed, the same are recognised in the Statement of Profit & Loss in the year of reversal. 6. INVENTORIES 6.1 Closing stock of stores & spares, printing & stationery items and other consumables are valued at lower of cost, on First in First Out (FIFO) basis, and net realisable value. Consumption of the above items during the reporting period is arrived at by deducting the value of physical stock in hand as on the reporting date from the aggregate value of opening stock and purchases during the reporting period. However, spare parts, equipments, etc. are not considered as inventory when it is required to be capitalized as per Ind AS -16. 6.2 Provision for obsolescent / surplus / non-moving inventory is made based on best estimates of net realisable value of such inventories. 7. FOREIGN CURRENCY TRANSACTION AND TRANSLATION 7.1 Foreign currency transactions are translated into the functional currency of the Company using the exchange rate prevailing at the date of the transactions as applicable. 7.2 Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange at the reporting date as applicable. Exchange differences arising on settlement or translation of monetary items are recognised in the Statement of Profit and Loss in the year in which it arises. 7.3 Non-monetary assets and liabilities denominated in foreign currency and measured at historical cost are translated using the exchange rate at the date of the transaction as applicable. 8. REVENUE & OTHER INCOME RECOGNITION The Company derives its revenue from design, engineering & consultancy services, execution of EPC projects / construction contracts, project management & consultancy services. Other income comprises interest on deposits with banks / financial institutions / employees, dividend from investments, other miscellaneous income, etc. 8.1 Engineering / Consultancy Services 8.1.1 Revenue from Engineering & Consultancy services rendered to the clients against contracts or Letters of Intent or Work orders or exchange of letters which stipulate lump sum fee is recognized over time using output method based on satisfaction of the performance obligation / right to receive payment. However, revenue shall be recognised upto the value of invoices raised after adjustment of down payment invoices on proportionate basis, unless stated otherwise in the contract. 8.1.2 Revenue from services rendered other than lump sum fee basis (including reimbursable jobs) is recognized at 100% value of the invoices raised towards satisfaction of the performance obligation. 8.2 Execution of Projects / Construction Contracts 8.2.1 Revenue from execution of projects/ construction contracts (including sale of spares) for the clients 84 MECON MECON Limited

against contracts or letters of intent or work orders or exchange of letters which stipulate fixed price is recognized over time using output method based on satisfaction of the performance obligation. 8.2.2 Revenue from cost plus construction contracts / deposit works with turnkey scope is recognized to the extent of amount billed as per identified performance obligation on the basis of contracts or letters of intent or work orders or exchange of letters received from clients 8.3 Revenue on account of escalation, additional or extra claims etc. from clients and other miscellaneous items like project insurance claims etc. are recognized at 100% value as and when they are admitted. 8.4 In cases where minimum undisputed terms are agreed to by the client, revenue is accounted for on the basis of such undisputed terms. 8.5 Where liquidated damages arises out of contractual terms when the work is not completed within the completion schedule or for non-achievement of any parameter, the liquidated damages amount is adjusted from the contract fee for revenue recognition. 8.6 Other Income Dividend income from Investments is recognized as and when the right to receive the payment is established. 9. JOB-IN-PROGRESS 9.1 Where the progress has been achieved (on the basis of technical estimate) in respect of a job but claim for payment as per contract does not arise, lower of cost or value of the work done based on percentage of progress, is carried forward under Job-in-Progress. However, Job-in-Progress is recognised considering 90% value only, unless technical estimate has reached 100%. 9.2. Where the work is started on the basis of job allotted by LOI / any other communication from the client, but the fee is yet to be settled, the cost incurred against such jobs is carried forward under Job-in- Progress. 10. EMPLOYEE BENEFITS 10.1 Post-Employment Benefits 10.1.1 Defined Contribution Plan Contributions paid / payable under defined contribution plan is recognised on the basis of actual liability on undiscounted basis in the reporting period in which they are incurred and charged to profit and loss. 10.1.2 Defined Benefit Plans The Company has post-retirement defined benefit plans comprising Retirement Gift, Post-Retirement Settlement Benefits, Post-Retirement Medical Benefits, Gratuity and Provident Fund to the extent of interest liability on provident fund contribution. Employee benefits expenses under post-retirement defined benefit plans are recognised based on the actuarial valuation as per Ind AS – 19 as at the end of the reporting period using the projected unit credit method and recognised in profit and loss. Any actuarial gains or losses are recognised in other comprehensive income in the period in which they arise. 10.2 Other Long-Term Employee Benefits Other long-term employee benefits under defined benefit plans comprises of leave encashment, long- service award, leave travel concession / leave travel assistance and employee family benefit schemes. Employee benefits under other long-term defined benefit plans are recognised based on the actuarial valuation as at the end of the reporting period using the projected unit credit method and recognised in profit and loss. Any actuarial gains or losses are recognised in profit and loss in the period in which they arise. 85 MECON

10.3 Short-Term Employee Benefits Short-term benefits comprise of employee costs such as salaries, bonus, etc. are accrued in the year in which the associated service are rendered by employees. 10.4 Termination Benefits Expenses are recognised for termination benefits (including Voluntary Retirement Compensation) in the period in which it is incurred. 11. MATERIAL PRIOR PERIOD ERRORS 11.1 Any expenditure or income which exceeds 0.5% of turnover in each case, which arise in the current period as a result of errors or omissions in the preparation of financial statements of one or more prior periods, are treated as material prior period errors. 11.2 Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest period presented, the opening balances of assets, liabilities and equity for the earliest period presented, are restated. 11.3 A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error. 12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS 12.1 Provisions for estimated liabilities on account of guarantees & warranties etc. in respect of Engineering & Consultancy Services and Turnkey Contracts are made by the company after assessment of risk and consequential probable liabilities on case to case basis. 12.2 Provisions for liquidated damages are made as and when these are deducted and/or considered deductible by the client as per contract. 12.3 Suppliers’/contractors’ claims for price escalation, additional or extra claims, etc. are accounted for to the extent such claims are accepted by the Company. 12.4 Where the effect of time value of money is material, provisions are determined and maintained by discounting the expected future cash flows, wherever applicable. 12.5 Contingent Liabilities / Contingent Assets are disclosed on the basis of best judgement. These are reviewed at each balance sheet date and are adjusted to reflect the current estimate. 13. INCOME TAXES 13.1 Income tax expense comprises current and deferred tax. Current tax expense is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in other comprehensive income (OCI) or equity, in which case it is recognised in OCI or equity. 13.2 Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted and as applicable at the reporting date, and any adjustment to tax payable in respect of previous years. 13.3 Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority. 13.4 Deferred tax is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in OCI or equity, in which case it is recognised in OCI or equity. 13.5 Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. 86 MECON MECON Limited

13.6 Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. 13.7 Additional income taxes that arise from the distribution of dividends are recognised at the same time that the liability to pay the related dividend is recognised. 14. LEASES 14.1 Company as a Lessee 14.1.1 Finance Lease Asset acquired on lease where substantially all the risks and rewards incidental to ownership are transferred by the lessor to the Company is classified under finance lease. At the inception of the lease, finance lease is recorded at amount equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The interest element of lease payments is charged to Statement of Profit and Loss, as finance costs over the period of the lease. 14.1.2 Operating Lease Asset acquired on lease where a significant portion of risk and rewards of ownership are retained by the lessor is classified under operating lease. Lease rental are charged to Statement of Profit and Loss on straight-line basis except where scheduled increase in rent compensate the lessor for expected inflationary costs. 14.2 Company as a Lessor 14.2.1 Operating Lease Asset given on lease where the Company does not transfer substantially all the risks and rewards of ownership of the asset is classified under operating lease. Receipts under operating lease are recognized in the Statement of Profit and Loss on straight line basis over the lease term except where scheduled increase in rent compensates the Company with expected inflationary costs. 15. DIVIDENDS Dividends payable to the shareholders of the Company are recognised as changes in equity in the period in which they are approved by the Board of Directors and the Shareholder’s Meeting respectively. 16. STATEMENT OF CASH FLOWS Statement of Cash Flows is prepared under “Indirect Method” in accordance with Ind AS – 7 “Statement of Cash Flows”. 17. FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. 17.1 Financial Assets 17.1.1 Initial Recognition Financial assets are recognised initially at fair value and transaction cost that is attributable to the acquisition of the financial asset is also adjusted. 17.1.2 Subsequent Measurement Subsequent to initial recognition, all financial assets are measured either at amortised cost or at fair value. Where financial assets are measured at fair value, gains and losses are recognised entirely in profit and loss (fair value through profit and loss, FVTPL). Effective interest rate (EIR) method for measurement is used for financial assets measured at amortised cost. The effective interest rate (EIR) amortization is included in the finance income in the profit and loss. Equity investments in subsidiaries and joint ventures are measured at cost. 87 MECON

17.1.3 Derecognition A financial asset is primarily derecognised when the right to receive cash flows from the financial asset has expired or the Company has transferred its rights to receive cash flows from the financial asset. 17.1.4 Impairment of financial assets Trade Receivables As a practical expedient the Company has adopted ‘simplified approach’ using the provision matrix method for recognition of expected loss on trade receivables. Investment in subsidiaries, joint ventures and associates The Company assesses whether there is any indication that these investments are be impaired. If any such indication exists, the investment is considered for impairment based on the fair value thereof.

Other Financial Assets For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly, impairment loss is provided. The losses arising from impairment are recognised in the Statement of Profit and Loss. 17.2 Financial Liabilities 17.2.1 Initial Recognition Financial liabilities are recognised initially at fair value and transaction cost that is attributable to the acquisition of financial liabilities is also adjusted. 17.2.2 Subsequent measurement Financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognised in profit and loss when the liabilities are derecognised as well as through the EIR amortization process. 17.2.3 Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss. 17.3 Offsetting of Financial Instruments: Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

88 MECON

NOTE 3.1 - PROPERTY, PLANT AND EQUIPMENT (GENERAL)

As on 31st March, 2019 (₹ in lakhs)

COST DEPRECIATION NET CARRYING AMOUNT Sl. Particulars Addition/ Inter- On Sale/ Inter- No. As on Sale/ Ad- As on As on During the Upto As on As on Adjust- Head Ad- Adjust- Head Ad- 01.04.18 justment 31.03.19 01.04.18 period 31.03.19 31.03.19 31.03.18 ment justment ment justment

1. Land 63.93 - - - 63.93 - - - - - 63.93 63.93

2. Building - Freehold 2,445.74 19.05 - - 2,464.79 1,054.78 - - 76.37 1,131.15 1,333.64 1,390.96

- Leasehold 185.11 - - - 185.11 64.20 - - 3.32 67.52 117.59 120.91

3. Road, Bridges & Culverts 0.55 - - - 0.55 0.53 - - - 0.53 0.02 0.02

4. Water Supply and Sewerage 36.17 - - - 36.17 13.15 - - 2.11 15.26 20.91 23.02

5. Furniture & Fixtures 1,120.71 6.53 1.64 - 1,125.60 855.91 1.56 - 40.77 895.12 230.48 264.80

6. Motor Vehicles 67.74 65.43 49.52 - 83.65 40.83 34.24 - 6.43 13.02 70.63 26.91

7. Office Equipments 967.45 23.56 0.62 (4.32) 986.07 731.50 0.11 (0.03) 86.85 818.21 167.86 235.95

8. Computer Hardware 2,336.58 44.73 0.42 4.32 2,385.21 2,070.84 0.40 0.03 120.59 2,191.06 194.15 265.74

9. Laboratory Equipments 591.71 - - - 591.71 403.38 - - 28.08 431.46 160.25 188.33

10. Electrical Installation 1,348.11 28.96 0.22 - 1,376.85 757.48 0.10 - 93.36 850.74 526.11 590.63 MECON Limited

11. Misc. Articles including Library 210.32 6.03 - - 216.35 199.62 - - 2.71 202.33 14.02 10.70

TOTAL 9,374.12 194.29 52.42 - 9,515.99 6,192.22 36.41 - 460.59 6,616.40 2,899.59 3,181.90 89

Contd... MECON 90

As on 31st March, 2018 (₹ in lakhs)

NET CARRYING COST DEPRECIATION AMOUNT Sl. Particulars No. Addition/ Inter- On Sale/ Inter- As on Sale/ Ad- As on As on During the Upto As on As on Adjust- Head Ad- Adjust- Head Ad- 01.04.17 justment 31.03.18 01.04.17 period 31.03.18 31.03.18 31.03.17 ment justment ment justment

1. Land 63.93 - - - 63.93 - - - - — 63.93 63.93

2. Building - Freehold 2,595.03 37.24 - (186.53) 2,445.74 1,011.85 - (69.21) 112.14 1,054.78 1,390.96 1,583.18

- Leasehold 185.11 - - - 185.11 60.88 - - 3.32 64.20 120.91 124.23

3. Road, Bridges & Culverts 0.55 - - - 0.55 0.53 - - - 0.53 0.02 0.02

4. Water Supply and Sewerage 36.17 - - - 36.17 11.03 - - 2.12 13.15 23.02 25.14

5. Furniture & Fixtures 1,119.79 1.09 0.17 - 1,120.71 795.46 0.17 - 60.62 855.91 264.80 324.33

6. Motor Vehicles 67.74 - - - 67.74 33.62 - - 7.21 40.83 26.91 34.12

7. Office Equipments 952.81 19.98 5.34 - 967.45 650.52 4.44 - 85.42 731.50 235.95 302.29

8. Computer Hardware 2,327.13 16.09 6.64 - 2,336.58 1,895.98 4.28 - 179.14 2,070.84 265.74 431.15

9. Laboratory Equipments 591.85 - 0.14 - 591.71 374.57 - - 28.81 403.38 188.33 217.28

10. Electrical Installation 1,265.47 86.15 3.51 - 1,348.11 661.09 2.32 - 98.71 757.48 590.63 604.38

11. Misc. Articles including Library 209.50 0.83 0.01 - 210.32 197.59 - - 2.03 199.62 10.70 11.91

TOTAL 9,415.08 161.38 15.81 (186.53) 9,374.12 5,693.12 11.21 (69.21) 579.52 6,192.22 3,181.90 3,721.96 MECON

NOTE 3.2 - PROPERTY, PLANT AND EQUIPMENT (SOCIAL AMENITIES)

As on 31st March, 2019 (₹ in lakhs)

NET CARRYING COST DEPRECIATION AMOUNT Sl. Particulars No. Addition/ Inter On Sale/ Inter During As on Sale/ Ad- As on As on Upto As on As on Adjust- Head Ad- Adjust- Head Ad- the 01.04.18 justment 31.03.19 01.04.18 31.03.19 31.03.19 31.03.18 ment justment ment justment period

1. Land 197.46 6.21 - - 203.67 - - - - - 203.67 197.46

2. Building 4,057.11 5.37 5.22 - 4,057.26 970.60 4.59 - 68.02 1,034.03 3,023.23 3,086.51

3. Road, Bridges & Culverts 318.12 - - - 318.12 291.71 - - 10.43 302.14 15.98 26.41

4. Water Supply and Sewerage 283.35 2.51 - - 285.86 177.49 (0.01) - 10.20 187.70 98.16 105.86

5. Fences 82.20 - - - 82.20 78.09 - - - 78.09 4.11 4.11

6. Plant & Equipments 490.62 7.82 - - 498.44 284.98 - - 25.09 310.07 188.37 205.64

7. Furniture & Fixtures 114.17 8.19 - - 122.36 79.85 - - 7.42 87.27 35.09 34.32

8. Motor Vehicles 1.05 - - - 1.05 0.88 - - 0.04 0.92 0.13 0.17

9. Office Equipments 31.59 1.76 - - 33.35 22.36 - - 3.17 25.53 7.82 9.23

10. Computer Hardware 20.20 - - - 20.20 10.77 (0.01) - 2.65 13.43 6.77 9.43

11. Electrical Installation 922.87 8.65 - - 931.52 391.75 0.01 - 71.18 462.92 468.60 531.12 MECON Limited 12. Misc. Articles including Library 6.22 - - - 6.22 5.94 - – - 5.94 0.28 0.28

TOTAL 6,524.96 40.51 5.22 — 6,560.25 2,314.42 4.58 — 198.20 2,508.04 4,052.21 4,210.54 91

Contd... MECON 92

As on 31st March, 2018 (₹ in lakhs)

NET CARRYING COST DEPRECIATION AMOUNT Sl. Particulars No. Addition/ Inter On Sale/ Inter During As on Sale/ Ad- As on As on Upto As on As on Adjust- Head Ad- Adjust- Head Ad- the 01.04.17 justment 31.03.18 01.04.17 31.03.18 31.03.18 31.03.17 ment justment ment justment period

1. Land 197.46 - - - 197.46 - - - - - 197.46 197.46

2. Building 3,868.13 2.45 - 186.53 4,057.11 832.98 - 69.21 68.41 970.60 3,086.51 3,035.15

3. Road, Bridges & Culverts 318.12 - - - 318.12 228.81 - - 62.90 291.71 26.41 89.31

4. Water Supply and Sewerage 283.35 - - - 283.35 167.39 - - 10.10 177.49 105.86 115.96

5. Fences 82.20 - - - 82.20 78.09 - - - 78.09 4.11 4.11

6. Plant & Equipments 489.44 1.18 - - 490.62 259.71 - - 25.27 284.98 205.64 229.73

7. Furniture & Fixtures 112.65 1.52 - - 114.17 72.57 - - 7.28 79.85 34.32 40.08

8. Motor Vehicles 1.01 0.04 - - 1.05 0.80 - - 0.08 0.88 0.17 0.21

9. Office Equipments 31.17 0.42 - - 31.59 19.89 - (0.46) 2.93 22.36 9.23 11.28

10. Computer Hardware 16.59 3.61 - - 20.20 7.77 - - 3.00 10.77 9.43 8.82

11. Electrical Installation 787.50 135.37 - - 922.87 325.40 - 0.46 65.89 391.75 531.12 462.10

12. Misc. Articles including Library 6.22 - - - 6.22 5.94 - - - 5.94 0.28 0.28

TOTAL 6,193.84 144.59 - 186.53 6,524.96 1,999.35 - 69.21 245.86 2,314.42 4,210.54 4,194.49 MECON MECON Limited NOTE 3.3 - PROPERTY, PLANT & EQUIPMENT, ETC.

A) LAND

(i) Under Section 7 of Public Sector Iron & Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978, land measuring 118.95 acres for residential colony acquired by the Government of India for the erstwhile Hindustan Steel Limited (HSL) was transferred in favour of MECON Limited by the Gazette Notification dated 30.4.1978. Deed of conveyance for land measuring 118.53 acres has been executed by the Government of Jharkhand in favour of MECON Limited on 1st August, 2016. Balance land measuring 0.42 acres has been released and handed over to Government of Jharkhand for road purpose. Out of the land measuring 118.53 acres executed in favour of MECON Limited, 21.06 acres have been allotted to Steel Authority of India Limited (SAIL), Research & Development Centre for Iron & Steel (RDCIS), Ranchi in 1980-81 for which transfer deed is still pending. The amount received / receivable for such transfer has been taken in the accounts.

(ii) Under Section 7 of Public Sector Iron & Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978, land measuring 10.25 acres for the administrative building acquired by the Government of India for the erstwhile Hindustan Steel Limited (HSL) was transferred in favour of MECON Limited by the Gazette Notification dated 30.4.1978. Deed of conveyance in this respect has not yet been executed by the Government of Jharkhand in favour of MECON Limited. Government of Jharkhand has been approached for deed of conveyance in favour of MECON Limited and the matter is in progress.

(iii) Deed of conveyance has been executed in favour of MECON Limited by Government of Jharkhand on 1st August, 2016 for land measuring 103.33 acres for township at Ranchi acquired from Govt. of Bihar by the Company in 1978-79. Out of the land measuring 103.33 acres, transfer deed in favour of Steel Authority of India Limited (SAIL), Research & Development Centre for Iron & Steel (RDCIS), Ranchi for 7.43 acres of land and in favour of Steel Authority of India Limited (SAIL), Management Training Institute (MTI), Ranchi for 5.42 acres of land is pending. The amount received / receivable for such transfer has been taken in the accounts. Deed of conveyance has been executed in favour of MECON Limited by Government of Jharkhand on 1st August, 2016 for land measuring 1.50 acres of land for township at Ranchi which was acquired from Govt. of Bihar by the Company in 1983-84.

(iv) Out of 223.36 acres of land in possession of the Company in township at Ranchi, 0.856 acres of land is under unauthorised occupation.

B) BUILDINGS

(i) Office Space / Building at SCOPE Minar, Laxmi Nagar, New Delhi, Gross Block ₹1,193.30 lakhs (Previous Year ₹1,193.30 lakhs) have been acquired from SCOPE on self financing / contribution basis without ownership title deed, the cost of acquisition of Office Space / Building has been considered as Building and depreciation thereon has been provided at the rate as applicable for Building.

(ii) Residential buildings at Rourkela, Gross block ₹5.12 lakhs (Previous year ₹5.12 lakhs) and at Durgapur, Gross block ₹8.62 lakhs (Previous year ₹8.62 lakhs) have been constructed on the land belonging to SAIL for which the depreciation is being charged at the rate applicable for Residential Building.

(iii) Pending determination of the proportionate value of the land in respect of Buildings acquired at New Delhi, Gaziabad, Navi Mumbai, Bangalore (Austin Town & Rajiv Nagar) and Kolkata the cost of acquisition of flats has been considered as Building and depreciation thereon has been provided at the rate as applicable for Residential Building.

C) Assets purchased during the year costing above ₹1,000/- each and upto ₹5,000/- each are fully depreciated in the year of acquisition (Refer Note 2 Sl.No. 2.4.2) w.e.f. 1993-94.

93 MECON

NOTE 4 - CAPITAL WORK-IN-PROGRESS

(₹ in lakhs)

Opening Balance Sl. Balance Additions/ Capitalised/ Particulars Total No. as on Adjustments Adjustments As on As on As on 01.04.18 31.03.19 31.03.18 01.04.17

1. Installation of Modular 12.22 (12.22) - - — 12.22 65.51 Furniture / Biometric Attendance System at Head Office at Ranchi, Jharkhand.

2. Energy Meter / Walking - 97.79 97.79 - 97.79 - - Track / Electronic Door Detector at Township, Ranchi, Jharkhand

TOTAL 12.22 85.57 97.79 — 97.79 12.22 65.51

94 MECON

NOTE 5.1 - OTHER INTANGIBLE ASSETS

As on 31st March, 2019 (₹ in lakhs) COST AMORTISATION NET CARRYING AMOUNT Sl. Inter-Head Inter-Head Particulars As on Addition/ Sale/ As on As on On Sale/ During the Upto As on As on No. Adjust- Adjust- 01.04.18 Adjustment Adjustment 31.03.19 01.04.18 Adjustment period 31.03.19 31.03.19 31.03.18 ment ment 1. Computer Software 1,445.77 50.81 - - 1,496.58 1,231.51 - - 105.00 1,336.51 160.07 214.26 (General) 2. Computer Software 13.23 - - - 13.23 6.19 - - 2.54 8.73 4.50 7.04 (Social Amenities) TOTAL 1,459.00 50.81 — — 1,509.81 1,237.70 — — 107.54 1,345.24 164.57 221.30

As on 31st March, 2018 (₹ in lakhs) COST AMORTISATION NET CARRYING AMOUNT Sl. Inter-Head Inter-Head Particulars As on Addition/ Sale/ As on As on On Sale/ During the Upto As on As on No. Adjust- Adjust- 01.04.17 Adjustment Adjustment 31.03.18 01.04.17 Adjustment period 31.03.18 31.03.18 31.03.17 ment ment 1. Computer Software 1,369.17 76.60 - - 1,445.77 1,123.97 - - 107.54 1,231.51 214.26 245.20 (General) 2. Computer Software 13.23 - - - 13.23 3.64 (0.01) - 2.54 6.19 7.04 9.59 (Social Amenities) TOTAL 1,382.40 76.60 - - 1,459.00 1,127.61 (0.01) - 110.08 1,237.70 221.30 254.79 MECON Limited 95 MECON

NOTE 6 - INVESTMENTS (NON-CURRENT) (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Trade Investment - at Cost (Unquoted) i) Investment in Equity Instruments 1) Joint Venture 5000 Equity Shares of Naira 10 each fully paid 7.60 7.60 7.60 up being 50% of paid up share capital of M/s Metallurgical & Engineering Consultants (Nigeria) Limited, a Company set up in Nigeria jointly by this Company with two Nigerian Government Companies and Nigerian Citizens Less : Provision for impairment in the value of investment 7.60 - 7.60 - 7.60 - 2) Others 50,00,000 Equity Shares of `10/- each fully paid 500.00 500.00 500.00 up of “Neelachal Ispat Nigam Limited”. Less : Provision for impairment in the value of investment 500.00 - 500.00 - - 500.00

(b) Other Investment - at Cost (Unquoted) Investment in Equity Instruments 1) Others 106,383 Equity Shares of `10/- each fully paid-up 11.92 11.92 11.92 of “Global Procurement Consultants Limited”. (Out of the above, 6,383 Equity Shares of `10/- each fully paid-up acquired at a premium of `20/- per share subsequently.) TOTAL 11.92 11.92 511.92

a) Aggregate amount of Quoted Investments NIL NIL NIL b) Aggregate amount of Unquoted Investments 519.52 519.52 519.52 c) Aggregate provision for impairment of in the value of investment 507.60 507.60 7.60 NOTE 7 - TRADE RECEIVABLES (NON-CURRENT) (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 a) Considered Good - Secured — – – b) Considered Good - Unsecured 15,099.77 11,926.14 9,927.93 c) Significant increase in Credit Risk 230.68 139.35 129.44 d) Credit Impaired 6,780.22 4,255.61 4,021.21 22,110.67 16,321.10 14,078.58 Less : Provision for Bad and Doubtful Trade Receivables 7,010.90 4,394.96 4,150.65 / Expected Credit Loss TOTAL 15,099.77 11,926.14 9,927.93

96 MECON MECON Limited NOTE 8 - LOANS (NON-CURRENT) (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

(a) Security Deposits (i) Government Authorities $ 5.46 5.45 5.44 (ii) Others Considered Good - Secured - - - Considered Good - Unsecured 201.83 201.42 316.79 Significant increase in Credit Risk - - - Credit Impaired 216.30 186.33 113.24 418.13 387.75 430.03

Less : Provision for doubtful deposits 216.30 201.83 186.33 201.42 113.24 316.79

(b) Loans to Related Parties - - -

(c) Others (i) Advance to Employees $ 1.63 6.97 7.57 (ii) Interest Receivable on Advance to 9.83 13.06 14.50 Employees $ (iii) Claims Recoverable Considered Good - Secured - - - Considered Good - Unsecured 10.06 5.41 3.01 Significant increase in Credit Risk - - - Credit Impaired 260.31 116.34 116.34 270.37 121.75 119.35 Less : Provision for Claims Recoverable 260.31 10.06 116.34 5.41 116.34 3.01

TOTAL 228.81 232.31 347.31 $ Considered good - Unsecured NOTE 9 - OTHER FINANCIAL ASSETS (NON-CURRENT) (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

(a) Bank Balances - 7,300.00 1.00

Fixed deposits with more than 3 months maturity which are due for maturity beyond 12 months from balance sheet date

(b) Interest accrued but not due - 5.92 0.02

TOTAL - 7,305.92 1.02

97 MECON

NOTE 10 - DEFERRED TAX ASSETS (NET) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

(a) Deferred Tax Assets

(i) Provision for bad & doubtful debts 2,369.28 1,470.77 1,380.37

(ii) Provision for Gratuity 1,674.89 1,404.75 8.31

(iii) Provision for ECL 318.86 244.83 -

(iv) Provision for LD Recovered 58.59 131.02 128.27

(v) Provision for Claims Recoverable 98.16 47.86 47.40

(vi) Provision for Doubtful Advances to Suppliers 126.42 126.42 125.21

(vii) Provision for Doubtful Deposit with Others 57.75 55.82 29.98

(viii) Provision for EMD/SD 1,629.78 1,621.23 252.02

(ix) Provision for Misc. Deductions 943.85 1,044.26 1,081.75

(x) Provision for Disputed Cases 99.63 99.63 98.67

(xi) Provision for Service Tax Receivable 557.99 318.79 208.42

(xii) Provision for Stagnant Jobs 743.40 1,525.02 2,220.30

(xiii) Provision for Output VAT Receivable 155.49 154.13 145.67

(xiv) Provision for Doubtful GST Receivable 6.60 - -

(xv) Prov. for Doubtful STDS Certificate Recv. 5.79 5.79 5.73

(xvi) Provision for Bonus 3.96 3.73 3.66

(xvii) Prov. for dimunition in the value of 174.72 174.72 - Investment

(xviii) Provision for expenses on R&D - 9,025.16 - 8,428.77 138.43 5,874.19

(b) Deferred Tax Liability

(i) Diff. between book and tax depreciation 635.27 668.75 703.27

(ii) Sales Tax Paid 149.77 785.04 141.00 809.75 139.65 842.92

NET DEFERRED TAX ASSET / (LIABILITY) (a) - (b) 8,240.12 7,619.02 5,031.27

98 MECON MECON Limited NOTE 11 - OTHER NON-CURRENT ASSETS

(₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

(a) Capital Advances - - -

(b) Advances other than Capital Advances (i) Security Deposits - - - (ii) Advances to related parties - - - (iii) Other Advances - Advance to Suppliers and Sub-Contractors Considered Good - Secured # 1,695.63 762.34 763.38

Considered Good - Unsecured - - -

Considered Doubtful 361.73 361.73 361.73

2,057.36 1,124.07 1,125.11

Less : Provision for doubtful advance to Suppliers and Sub-Contractors 361.73 1,695.63 361.73 762.34 361.73 763.38 - Advance to Others $ 106.08 104.69 105.60 - Prepaid Expenses $ 1.55 1.59 0.34 - Advances to Board of Trustees, MECON — – 138.97 Employees Gratuity Fund $ - Payment against Sales Tax / VAT $ 10.00 10.00 10.00 (c) Others - Liquidated Damages Recovered by Clients Considered Good - Unsecured 235.16 - - Considered Doubtful 161.18 253.96 249.67 396.34 253.96 249.67 Less : Provision for doubtful liquidated damages recovered 161.18 235.16 253.96 - 249.67 - - EMD, SD, PBG and Advance Amount in dispute Considered Good - Unsecured - - - Considered Doubtful 4,612.06 4,612.06 700.76 4,612.06 4,612.06 700.76 Less : Provision for doubtful EMD, SD, PBG and Advance Amount in dispute 4,612.06 - 4,612.06 - 700.76 -

TOTAL 2,048.42 878.62 1,018.29 $ considered good - Unsecured # Secured against bank guarantee / materials supplied / work done, as the case may be

99 MECON

NOTE 12 - INVENTORIES (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Stores and Spares 89.00 104.84 98.47 (b) Printing and Stationery 33.49 27.41 34.82 (c) Computer Consumables 23.42 16.22 19.92 Valued as per Accounting Policy (NOTE 2, Sl.No.6) TOTAL 145.91 148.47 153.21 NOTE 13 - TRADE RECEIVABLES (CURRENT) (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 a) Considered Good - Secured - - - b) Considered Good - Unsecured 29,486.34 26,671.75 17,862.72 c) Significant increase in Credit Risk 681.80 559.61 400.29 d) Credit Impaired - - - 30,168.14 27,231.36 18,263.01 Less : Provision for Bad and Doubtful Trade Receivables / 681.80 559.61 400.29 Expected Credit Loss TOTAL 29,486.34 26,671.75 17,862.72 NOTE 14 - CASH AND CASH EQUIVALENTS (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 i) Cash at Bank (Current & Flexi Deposit A/cs) 724.61 2,882.19 216.21 ii) Cheques & Drafts on hand — - - iii) Cash & Stamps on hand 5.56 8.82 16.89 TOTAL 730.17 2,891.01 233.10 NOTE 15 - OTHER BANK BALANCES (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Fixed Deposits with more than 3 months maturity 52,210.59 47,351.00 54,810.00 which are due for maturity within 12 months from balance sheet date (b) Interest accrued but not due on Fixed Deposits 1,201.53 734.67 1,172.94 TOTAL 53,412.12 48,085.67 55,982.94 ¾¾ Other Bank Balances include amounts earmarked / available for specified purposes as under : i) CSR and SD Expenditure 527.11 456.07 498.39 ii) Research & Development Expenditure 162.58 135.46 135.46 iii) Corporate Sports Expenditure 60.00 - - ¾¾ Other Bank Balances include amounts held as 9,201.00 12,051.00 7,250.00 margin money & security under lien against borrowings, etc. ¾¾ Other Bank Balances include Deposits with more — — 6,500.00 than 12 months maturity

100 MECON MECON Limited NOTE 16 - LOANS (CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

(a) Security Deposits

Deposit with Others

Considered Good - Secured - - -

Considered Good - Unsecured 146.75 188.31 174.05

Significant increase in Credit - - - Risk

Credit Impaired 0.84 0.84 0.84

147.59 189.15 174.89

Less : Provision for Doubtful Deposit with Others 0.84 146.75 0.84 188.31 0.84 174.05

(b) Loans to Related Parties - - -

(c) Others

(i) Advance to Employees

Considered Good - Secured ## 0.02 0.02 0.02

Considered Good - Unsecured 273.09 315.07 234.04

Significant increase in Credit Risk - - -

Credit Impaired - 273.11 - 315.09 - 234.06

(ii) Interest Receivable on 2.30 1.07 2.51 Advance to Employees ##

(iii) Claims Recoverable

Considered Good - Secured - - -

Considered Good - Unsecured 335.93 249.21 156.34

Significant increase in Credit Risk - - -

Credit Impaired 20.61 20.61 20.61

356.54 269.82 176.95

Less : Provision for Doubtful Claims Recoverable 20.61 335.93 20.61 249.21 20.61 156.34

TOTAL 758.09 753.68 566.96

## Secured against buildings and vehicles

101 MECON

NOTE 17 - OTHER FINANCIAL ASSETS (CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

(a) Jobs-in-Progress for Consultancy 10,001.27 707.90 629.50 Services

Valued as per Accounting Policy (NOTE 2, Sl.No.9) Less : Provision for Stagnant Jobs- in-Progress 2,127.40 7,873.87 13.71 694.19 13.71 615.79 (b) Other Receivables 279.49 642.07 848.07

TOTAL 8,153.36 1,336.26 1,463.86

NOTE 18 - CURRENT TAX ASSETS (NET) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017

Payment against Income Taxes (Net) 9,706.90 7,727.66 8,545.51

CURRENT TAX ASSETS / (LIABILITIES) 9,706.90 7,727.66 8,545.51

NOTE 19 - OTHER CURRENT ASSETS (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Advances other than capital advances (i) Security Deposits - - - (ii) Advances to related parties - - - (iii) Other Advances - Advances to Contractors $ 9.28 14.57 9.12 - Advance to Suppliers and Sub- Contractors Considered Good - Secured # 792.83 790.54 772.12 Considered Good - Unsecured 69.12 65.35 27.66 Considered Doubtful 0.06 0.06 0.06 862.01 855.95 799.84 Less : Provision for doubtful advance to Suppliers and Sub- Contractors 0.06 861.95 0.06 855.89 0.06 799.78 - Advance to Others & Canteen $ 32.19 161.27 18.80 - Prepaid Expenses $ 49.10 17.56 14.03 $ Considered good - Unsecured # Secured against bank guarantee / materials supplied / work done, as the case may be

102 MECON MECON Limited NOTE 19 - OTHER CURRENT ASSETS (Contd.) (₹ in lakhs) Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 - Payment against Sales Tax / VAT 1,104.73 1,223.07 1,106.10 (Net) $ - VAT Credit Receivable (INPUT) $ 4.57 4.57 39.47 - OUTPUT VAT Receivable Considered Good - Unsecured 43.55 43.55 23.40 Considered Doubtful 19.96 19.96 19.96 63.51 63.51 43.36 Less : Provision for Output VAT Receivable 19.96 43.55 19.96 43.55 19.96 23.40 - VAT / CST Receivable Considered Good - Unsecured - 9.47 93.72 Considered Doubtful 425.01 421.13 400.94 425.01 430.60 494.66 Less : Provision for VAT Receivable 425.01 - 421.13 9.47 400.94 93.72 - Service Tax Receivable Considered Good - Unsecured 126.94 1,094.54 2,869.89 Considered Doubtful 1,596.80 912.29 602.22 1,723.74 2,006.83 3,472.11 Less : Provision for Service Tax Receivable 1,596.80 126.94 912.29 1,094.54 602.22 2,869.89 - GST Receivable Considered Good - Unsecured 6,037.06 4,208.81 - - - Considered Doubtful 18.90 - - 6,055.96 4,208.81 - Less : Provision for GST Receivable 18.90 6,037.06 - 4,208.81 - - (b) Others - Liquidated Damages Recovered by Clients Considered Good - Unsecured - - - Considered Doubtful 6.49 121.00 121.00 6.49 121.00 121.00 Less : Provision for doubtful 6.49 - 121.00 - 121.00 - liquidated damages recovered

TOTAL 8,269.37 7,633.30 4,974.31 $ Considered good - Unsecured

103 MECON

NOTE 20 : EQUITY SHARE CAPITAL (₹ in lakhs) AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 AUTHORISED# Equity Shares 4,10,00,000 (Previous year 4,10,00,000) Equity Shares of 4,100.00 4,100.00 4,100.00 ` 10/- each 4,100.00 4,100.00 4,100.00 ISSUED, SUBSCRIBED AND FULLY PAID UP Equity Shares 4,01,38,360 ( Previous year 4,01,38,360) Equity Shares of 4,013.84 4,013.84 4,013.84 ` 10/- each with voting rights. a) 4,01,38,120 equity shares are held as fully paid-up by the President of India. b) 120 equity shares are held as fully paid-up by the Govt. Director of the company. c) 120 equity shares are held as fully paid- up by the Chairman and Managing Director of the company. Out of the total shares, ¾¾ 20,14,800 equity shares are allotted as fully paid- up for consideration other than cash, pursuant to the Government of India, Ministry of Steel & Mines letter No. 6(100)/78-SAIL(1) dated 15th May, 1979 as consideration for net book value of immovable assets of M/s Hindustan Steel Limited at Ranchi transferred to the Company. ¾¾ 4,03,060 equity shares are allotted as fully paid-up Bonus Shares during 1996-97 ¾¾ 77,20,000 equity shares are allotted as fully paid-up against conversion of Govt. of India Loan and Interest on Loan vide Government of India, Ministry of Steel Order No.4(46)/2004-HSM dated 30th March,2007 TOTAL : 4,013.84 4,013.84 4,013.84 # The Authorised Share Capital of the Company is ₹104,00,00,000/- (Previous Year ₹104,00,00,000/-) divided into 4,10,00,000 (Previous Year 4,10,00,000) Equity Shares of ₹10/- (Previous Year ₹10/-) each and 6,30,00,000 (Previous year 6,30,00,000) 5% Non-Cumulative Redeemable Preference Shares of ₹10/- (Previous Year ₹10/-) each. Authorised Share Capital of 5% Non-Cumulative Redeemable Preference Shares is not considered above in accordance with the requirement of Ind AS.

RECONCILIATION OF THE NUMBER OF SHARES OUTSTANDING AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 Equity Shares Number of Shares Outstanding at the beginning 40,138,360 40,138,360 40,138,360 Number of Shares Issued during the period - - - Number of Shares Bought Back during the period - - - Number of Shares Outstanding at the end 40,138,360 40,138,360 40,138,360

104 MECON MECON Limited NOTE 21 : OTHER EQUITY (₹ in lakhs) AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 A. RESERVES AND SURPLUS Capital Redemption Reserve $ As per last Balance Sheet 6,300.00 6,300.00 6,300.00 CSR Activity Reserve $$ As per last Balance Sheet - 15.25 15.25 Add : Transferred from Surplus 87.96 - - Less : Transferred to Surplus 16.92 71.04 15.25 - - 15.25 General Reserve $$$ As per last Balance Sheet 9,852.39 9,852.39 9,852.39 Add : Transferred from Surplus - 9,852.39 - 9,852.39 - 9,852.39 Retained Earnings $$$$ As per last Balance Sheet 2,660.70 (3,156.88) 4,110.44 Add/ Adjustment due to Ind AS 13,485.57 - (108.79) (Less): Implementation Add : Net Profit / (Loss) from Statement of 1,374.01 5,802.33 (7,376.11) Profit and Loss Add : Transferred from CSR Activity 16.92 15.25 - Reserve Amount available for appropriation 17,537.20 2,660.70 (3,156.88) Less : Transferred to CSR Activity Reserve 87.96 - - Less : Dividend on Equity Shares 1,027.19 - - Less : Dividend Distribution Tax 211.14 - - Less : Transferred to General Reserve - 16,210.91 - 2,660.70 - (3,156.88) B. OTHER COMPREHENSIVE INCOME # As per last Balance Sheet (2,242.86) (2,376.74) (2,376.74) Add : Other Comprehensive Income from Statement of Profit and Loss (159.37) (2,402.23) 133.88 (2,242.86) - (2,376.74)

TOTAL 30,032.11 16,570.23 10,634.02

$ As per provisions of the Companies Act, the Company has created Capital Redemption Reserve on redemption of 6,30,00,000 5% Non Cumulative Redeemable Preference Shares of `10/- each out of available profits. The Capital Redemption Reserve Account shall be utilised as per provisions of the Act. $$ As per provisions of the Companies Act, the Company has transferred / appropriated necessary CSR amount from Surplus to CSR Activity Reserve Account which is utilised by the Company for CSR Project / Activities, etc. $$$ As per provisions of the Companies Act, the General Reserve is created out of the accumulated profits of the Company. $$$$ Retained Earnings represent the amount of accumulated earnings of the Company after considering Dividend including Dividend Distribution Tax paid during the year, net adjustment due to CSR Activity, net cumulative impact of transition to adoption of Ind AS 115 and the profits made by the Company during the year. # As per provisions of the Companies Act, Other Comprehensive Income represents balance arising on account of gains / losses booked on Re-measurement of Net Defined Benefit Plans.

105 MECON

NOTE 22 - TRADE PAYABLES (NON-CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 Trade Payables i) Dues to Micro & Small Enterprises (Refer Note 1,279.31 1,256.40 1,032.15 40.23) ii) Others 5,828.73 6,249.79 6,202.25

TOTAL 7,108.04 7,506.19 7,234.40

NOTE 23 - OTHER FINANCIAL LIABILITIES (NON-CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Other Payables (i) Sundry Creditors 172.01 172.01 568.61 (ii) Securities and Other Deposits 361.37 352.08 324.38 (iii) Deposit under Employees Family Benefit 297.31 336.39 358.70 Scheme (iv) Liability for Employees 97.76 22.85 3,713.23 TOTAL 928.45 883.33 4,964.92

NOTE 24 - PROVISIONS (NON-CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Provision for Employee Benefits (i) Provision for Gratuity (Present Value of Defined Benefit Obligation as per actuarial valuation) 3,703.31 4,009.01 152.21 (ii) Provision for Leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation) 11,472.26 10,162.47 9,806.72 (iii) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation) 6,631.11 6,234.93 5,802.91 (iv) Provision for Employee Defined Contribution Schemes 15,912.60 14,422.25 14,216.78 37,719.28 34,828.66 29,978.62 (b) Other Provisions (i) Provision for Miscellaneous Deduction by Clients 2,636.70 2,936.39 3,090.42 (ii) Provision for Disputed Cases 285.12 285.12 285.12 TOTAL 40,641.10 38,050.17 33,354.16

106 MECON MECON Limited NOTE 25 - OTHER NON-CURRENT LIABILITIES (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (i) Advances from Clients 1,887.11 3,779.09 3,919.97 (ii) Liquidated Damages Recovered from Parties 468.92 461.91 446.92 TOTAL 2,356.03 4,241.00 4,366.89

NOTE 26 - TRADE PAYABLES (CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 Trade Payables (i) Dues to Micro & Small Enterprises (Refer Note 2,549.04 2,762.35 1,479.42 40.23) (ii) Others 8,998.05 9,761.56 11,298.34 TOTAL 11,547.09 12,523.91 12,777.76

NOTE 27 - OTHER FINANCIAL LIABILITIES (CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Current Maturity of Non-Current Borrowings - - - (b) Interest accrued but not due on borrowings - - - (c) Interest accrued and due on borrowings - - - (d) Other Payables (i) Sundry Creditors 3,254.35 3,378.07 2,002.88 (ii) Securities and other deposits 453.99 421.60 396.14 (iii) Deposit under Employees Family Benefit 46.67 71.65 44.85 Scheme (iv) Liability for Employees 4,070.04 3,754.52 3,368.98 (v) Invoice raised but not accrued (Net) 19,640.19 7,297.40 2,356.30 TOTAL 27,465.24 14,923.24 8,169.15

NOTE 28 - OTHER CURRENT LIABILITIES (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (i) Advances from Clients 7,336.82 8,268.01 9,920.12 (ii) Deposit from Clients (Deposit Works) 1,405.94 2,245.89 - (iii) Liquidated Damages Recovered from Parties 80.24 80.23 79.17 (iv) VAT / Central Sales Tax Liability 123.76 116.44 187.32 (v) Service Tax Liability 0.41 1.11 48.34 (vi) GST Payable 1,611.04 2,071.89 - (vii) Dividend including Dividend Tax Payable - - - (viii) Others (including CSR / SD / R&D Fund) 704.50 660.89 658.72 TOTAL 11,262.71 13,444.46 10,893.67

107 MECON

NOTE 29 - PROVISIONS (CURRENT) (₹ in lakhs)

Particulars AS AT 31.03.2019 AS AT 31.03.2018 AS AT 01.04.2017 (a) Provision for Employee Benefits (i) Provision for Gratuity (Present Value of 1,089.77 10.98 10.75 Defined Benefit Obligation as per actuarial valuation) (ii) Provision for Leave Encashment (Present 912.18 1,817.53 1,901.05 Value of Defined Benefit Obligation as per actuarial valuation) (iii) Provision for Other Employee Defined 258.09 219.49 194.13 Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation) 2,260.04 2,048.00 2,105.93

(b) Other Provisions (i) Provision for Bonus 11.34 10.69 10.57 (ii) Provision for Expenses & Contractual 5,815.14 16,580.66 16,296.50 Obligations (iii) Provision for Miscellaneous Deductions by 64.33 51.97 35.29 Clients TOTAL 8,150.85 18,691.32 18,448.29

NOTE 30 - REVENUE FROM OPERATIONS (₹ in lakhs)

Particulars 2018-19 2017-18 (a) Revenue from Consultancy Services 37,612.12 35,213.36 (b) Revenue from Construction Contracts 9,405.12 9,359.26 (c) Other Operating Revenue (i) Provision no longer required written back (Direct) 869.17 2,878.04 (ii) Others 33.95 586.42 TOTAL 47,920.36 48,037.08

NOTE 30.1 - GROSS INCOME DERIVED FROM SERVICES RENDERED [Refer Note 30(a) and Note 30(b)] (₹ in lakhs)

Particulars 2018-19 2017-18 (a) Engineering, Technical Consultancy, Project Management Services, etc. - Domestic 37,149.74 35,184.37 (b) Engineering, Technical Consultancy, Project Management Services, etc. - Foreign 462.38 28.99 (c) Execution of Construction Contracts/EPC Contracts including Supply of Equipment & 9,405.12 9,359.26 Components, etc. TOTAL 47,017.24 44,572.62

108 MECON MECON Limited NOTE 31 - OTHER INCOME (₹ in lakhs)

Particulars 2018-19 2017-18

(a) Interest Income

(i) Interest from Bank (Tax deducted at Source ` 231.52 lakhs) (CPLY ` 239.17 lakhs) 3,770.76 3,563.38

(ii) Interest on Advances to Employees for Conveyance and House Building 0.06 0.07

(iii) Interest from Income Tax Department and Others - 309.29

(b) Dividend Income from Non-Current Investment 1.60 1.60

(c) Other Non-Operating Income

(i) Profit on Sale / Disposal of Fixed Assets 5.16 0.69

(ii) Income from Township 1,154.48 1,297.33

(iii) Provision no longer required written back 2.37 5,511.99

(iv) Miscellaneous Income 185.26 240.60

TOTAL 5,119.69 10,924.95

NOTE 32 - PURCHASE OF EQUIPMENTS & DIRECT EXPENSES (₹ in lakhs)

Particulars 2018-19 2017-18

(a) Purchase of Equipments & Components for execution of jobs 2,985.37 4,719.64

(b) Expenses on Sub-Contractors & Others for execution of jobs 5,880.77 4,833.24

(c) Provision for Expenses & Contractual Obligations for execution of jobs 204.22 4,215.46

TOTAL (a)+(b)+(c) 9,070.36 13,768.34

NOTE 33 - (ACCRETION) / DECRETION TO JOBS-IN-PROGRESS (₹ in lakhs)

Particulars 2018-19 2017-18

(a) Opening Jobs-in-Progress (Consultancy) 11,993.55 629.50

(b) Closing Jobs-in-Progress (Consultancy) 10,001.27 707.90

(a)-(b) 1,992.28 (78.40)

109 MECON

NOTE 34 - EMPLOYEE BENEFITS EXPENSES (₹ in lakhs) Particulars 2018-19 2017-18 (a) Salaries & Wages - Salary and Allowances 18,530.26 17,704.58 - Leave Encashment 1,685.23 1,575.14 - Perks and Allowances 3,231.11 3,266.57 - Bonus 3.21 7.85 - Superannuation Benefits 1,795.46 1,798.33 Sub-Total 25,245.27 24,352.47

(b) Company’s Contribution to Provident and Other Fund 2,664.80 6,154.45 (c) Staff Welfare Expenses - Education 3.90 4.77 - Medical 541.12 547.87 - Social & Cultural Activities 59.74 57.66 - Rent (Residential) 0.14 1.53 - Group Insurance Premium 10.77 16.70 - Staff Welfare (Others) 296.71 252.33 Sub-Total 912.38 880.86

TOTAL (a)+(b)+(c) 28,822.45 31,387.78

NOTE 35 - FINANCE COSTS (₹ in lakhs) Particulars 2018-19 2017-18 (a) Interest Interest on Loan from Banks 71.60 32.00 Sub-Total (a) 71.60 32.00 (b) Other Borrowing Costs i) Bank Charges 17.38 39.13 ii) Bank Guarantee Commission 53.13 94.78 Sub-Total (b) 70.51 133.91

TOTAL (a) + (b) 142.11 165.91

NOTE 36 - DEPRECIATION AND AMORTISATION EXPENSES (₹ in lakhs) Particulars 2018-19 2017-18 a) Depreciation 658.79 825.38 b) Amortisation 107.54 110.08 TOTAL (a) + (b) 766.33 935.46

110 MECON MECON Limited NOTE 37 - OTHER EXPENSES (₹ in lakhs)

Particulars 2018-19 2017-18 1. Travelling Expenses 1,631.63 1,592.66 2. Foreign Deputation 183.02 336.93 3. Maintenance & Repairs to Buildings 1,127.59 1,450.32 4. Repairs (Others) 39.09 64.66 5. Stores & Spares consumed 69.91 163.76 6. Printing & Stationery consumed 95.79 99.41 7. Expenses on Computer Consumables 38.50 21.79 8. Rent (Non-residential) 416.35 362.79 9. Rates & Taxes 103.54 114.02 10. Advertisement & Publicity 130.94 90.95 11. Advertisement (Reimbursible) - 111.60 12. Payment to Auditors : - As Statutory Auditor 3.00 3.00 - For Income Tax / GST Audit Matters 4.48 0.48 - For Quarterly Audit 1.80 1.80 - For reimbursement of expenses 2.90 12.18 2.60 7.88 13. Insurance 7.35 4.23 14. Training Expenses : - Inland 59.14 63.80 - Foreign - 59.14 - 63.80 15. Postage,Telephones & Telegraphs 114.06 133.26 16. Computer Services 174.59 96.79 17. Power and Fuel 581.65 535.09 18. Legal & Professional Charges 175.33 93.31 19. Assets Charged to Revenue 0.93 0.44 20. Other Administrative and Misc. Expenses 1,099.17 924.68 21. Fees Withdrawn - 18.22 22. Expenses on CSR and Sustainable Development 16.92 13.56 23. Expenses on Research & Development 29.00 - 24. Expenses on Corporate Sports Fund 60.00 - 25. Loss on Sale / Disposal of Fixed Assets 0.17 2.02 26. Provisions - Provision for Doubtful Trade Receivables / ECL 2,644.03 651.96 - Provision for Impairment in the value of Investments - 500.00 - Provision for Claims Recoverable 143.97 - - Provision for Doubtful Deposit with Others 5.54 73.10 - Provision for Earnest Money Deposit 24.43 - - Provision for Stagnant Jobs-in-Progress 1,114.31 - - Provision for Stagnant Jobs - 430.39 - Provision for LD Recovered by Clients 10.78 4.66 - Provision for Service Tax Receivable 747.64 285.51 - Provision for VAT / Cess Receivable 41.70 54.70 - Provision for GST Receivable 18.90 - - Provision for Doubtful ITDS Credit - 6.68 - Provision for Misc. Deduction by Clients 330.93 71.94 TOTAL 11,249.08 8,381.11

111 MECON

NOTE 38: CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) (₹ in lakhs) Particulars 31.03.2019 31.03.2018 38.1 Contingent Liabilities i) Claims against Company under liquidated damage clause by NIL NIL the Clients. ii) Income tax in dispute / under appeal 781.60 781.60 iii) Sales tax demands pending appeals with Appellate Authorities. 2,197.85 2,166.68 iv) Excise Duty / Service Tax demands pending appeals with 230.65 NIL Appellate Authorities. v) Claims against Company by Contractors / Suppliers, etc. 9,990.61 7,590.64 pending final decision. vi) Claims against Company for electricity supply by Jharkhand 1,958.93 1,958.93 Urja Vikas Nigam Limited (JUVNL) in dispute ₹2,486.07 lakhs. Out of this, ₹527.14 lakhs is paid / provided in accounts pending final decision during the FY 2015-16. vii) The Regional Provident Fund Commissioner-II, Jharkhand, 322.91 322.91 Ranchi ordered for payment of ₹385.27 lakhs by way of interest and penalty to the BOT, arising out of delayed remittances by the company to the BOT, MECON Employees PF Trust. The company disputed the same and filed an appeal with EPF, Appellate Tribunal, New Delhi after depositing ₹96.32 lakhs as interim adhoc advance. The Hon’ble High Court of Jharkhand, vide order dated 30th July, 2012 has directed Provident Fund Commissioner, Ranchi to decide the question of delay in payment and determine the quantum of damages with a view to re-assess the liability of the Company, setting aside all earlier orders. RPFC has worked out liability of ₹326.02 lakhs vide their letter dated 28.08.2013. Provision of ₹3.11 lakhs has been made during 2013-14 based on Company’s calculation pending final decision. Out of the above, the Regional Provident Fund Commissioner-I, Jharkhand, Ranchi vide their letter dated 17.03.2015, demanded ₹116.86 lakhs towards interest and penalty, arising out of delayed remittances of PF and Pension amounts for the period from April, 1971 to February, 2001. Writ Petition has been filed before Hon’ble Jharkhand High Court against the order dated 14.02.2017 passed by EPF, Appellate Tribunal, New Delhi. viii) Interest on arrear perks and allowances in respect of executive 5,238.50 4,684.16 employees as determined upto 31.03.2019 following order no. O.A. 350/00191/2014 dated 15.02.2016 passed by the Central Administrative Tribunal, Calcutta Bench, pending final decision.

Contd... 112 MECON MECON Limited

(₹ in lakhs) Particulars 31.03.2019 31.03.2018 ix) Arrears Perks and Allowances in respect of executive employees 3,079.66 3,079.66 for the period 26.11.2008 to 20.10.2009 as estimated following the order no. O.A. 350/00191/2014 dated 15.02.2016 issued by the Central Administrative Tribunal, Calcutta Bench. The matter is in dispute and is pending before the Hon’ble Calcutta High Court as intimated by the Ministry of Steel. 38.2 Commitments Estimated amount of contracts/orders remaining to be 205.02 27.77 executed/supplied on capital account and not provided for

NOTE 39: PROPOSED DIVIDEND

(₹ in lakhs) Particulars 2018-19 2017-18 Proposed dividend on equity shares Total dividend (₹ in lakhs) NIL 1,027.19 Dividend per share (₹) NIL 2.56 Dividend distribution tax on Proposed dividend NIL 211.14 NOTE 40: ADDITIONAL INFORMATION AND OTHER DISCLOSURES (₹ in lakhs) Particulars 2018-19 2017-18 40.1 Letters of Credit opened with Bankers for purchase of 11.42 94.51 equipment & components and technical services. 40.2 Guarantees given by Banks for and on behalf of the Company 17,504.36 16,811.08 to different clients etc. 40.3 Earnings in Foreign Exchange Fees for services rendered. 462.38 28.99 40.4 Expenditure in Foreign Currency (i) Professional and Consultation Fees 143.27 212.32 (ii) Other matters 132.26 275.53 197.79 410.11 40.5 Value of Imports (Calculated on CIF basis) (i) Equipment, components & spares parts used in 83.96 251.56 construction contract (ii) Capital goods NIL 83.96 NIL 251.56 40.6 (i) Expenses on Advertisement & Publicity a) Advertisement 27.51 52.80 b) Publicity 103.43 130.94 38.15 90.95 (ii) Expenses on Public Relation Establishment 38.90 37.02

40.7 Expenses on Engineering, Research & Development Wing / establishment, including capital assets a) Salary & Wages, etc. 106.02 71.32 b) Expenses out of R&D Fund 1.88 107.90 NIL 71.32

113 MECON

40.8 PARTICULARS OF PROVISIONS (₹ in lakhs)

Provision Provision Provi- Provi- Provision for doubt- Provision Provision for Liq- Provision sion for sion for for Disput- Provi- ful ad- for Miscel- for Bad & uidated for Claims Doubtful Doubtful ed Cases, PARTICULARS sion for vances to laneous Doubtful Damages Recover- Earnest Deposit Stagnant Bonus suppliers/ Deductions Debts recovered able Money with jobs, EMD, sub-con- by Clients by Clients Deposit Others SD, etc tractors

Opening 10.69 4,208.92 374.96 136.95 27.44 159.73 361.79 2,988.36 10,706.05 Balance as on (10.57) (3,988.60) (370.67) (136.95) (27.44) (86.64) (361.79) (3,125.71) (8,509.20) 01.04.2018

Add: Provision 6.64 2,870.56 10.78 143.97 24.43 5.54 NIL 330.93 3,149.13 made during (3.51) (468.66) (4.66) (NIL) (NIL) (73.09) (NIL) (71.94) (4,688.57) the year

Less: 2.56 NIL NIL NIL NIL NIL NIL NIL 56.12 Provision (3.39) (NIL) (NIL) (NIL) (NIL) (NIL) (NIL) (NIL) (0.59) utilised during the year

Less: Unused 3.43 299.26 218.07 NIL NIL NIL NIL 618.26 4,622.51 provision (NIL) (248.34) (0.37) (NIL) (NIL) (NIL) (NIL) (209.29) (2,491.13) reversed during the year

Closing 11.34 6,780.22 167.67 280.92 51.87 165.27 361.79 2,701.03 9,176.55 Balance as on (10.69) (4,208.92) (374.96) (136.95) (27.44) (159.73) (361.79) (2,988.36) (10,706.05) 31.03.2019 Figures in bracket relates to previous year

40.9 DISCLOSURE UNDER IND AS-17 ON “LEASES” The Company has taken certain offices, residential premises, etc on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the FY 2018-19 an amount of ₹416.35 lakhs (Previous Year ₹362.79 lakhs) has been accounted for as rental charges in respect of these cancellable leases. The Company has given certain office, residential premises, etc on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the FY 2018-19 an amount of ₹225.55 lakhs (Previous Year ₹201.49 lakhs) has been accounted for as rental income in respect of these cancellable leases.

114 MECON MECON Limited

40.10 DISCLOSURE UNDER IND AS -19 ON “EMPLOYEE BENEFITS” A Defined Benefit Scheme A.1 General Description of Defined Benefit Schemes:

Gratuity : Payable on separation @ 15 days salary for each completed year of service or part thereof in excess of six months to eligible employees who render continuous service of 5 years or more. Beyond 30 years of service, gratuity is payable at the rate of one month’s/30 days salary for each completed year of service in excess of 30 years. The maximum limit of gratuity is ₹20.00 lakhs w.e.f. 29.03.2018.

Leave Encashment : Payable on separation to eligible employees who have accumulated earned leave and half pay leave. Maximum limit of accumulation is 300 days (both earned leave and half pay leave taken together). However, no commutation of HPL would be permissible for the purpose of encashment of 300 days leave as above. Employees in service become entitled to en-cash accumulated earned leave standing to his / her credit when the earned leave has accumulated 300 days, subject to maximum earned leave encashment allowed upto 30 days in a calendar year.

Provident Fund : 12% of Basic Pay & Dearness Allowance contributed to the Provident Fund Trust by the Company.

Post Retirement Medical : Available to the employees and his spouse after separation Benefits (Superannuation/death) at Company’s hospitals / under Health Insurance scheme / a fixed amount of ₹2,400/- p.a. under Outdoor Medical Treatment (ODMT) scheme, as applicable.

Post Retirement : Payable to employees/spouse on separation (Superannuation, Voluntary Settlement Benefits Retirement, Death, Discharge on medical ground and resignation after the age of 57 years) for settlement upto their home town.

Employees’ Family Benefit : Monthly payments to disabled separated employees/legal heirs of Scheme deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long Service Award : Payable in kind on rendering 15 years of service and also on rendering 30 years of service.

Retirement Gift : Payable in kind on retirement.

LTC/LTA : Non-executive regular employees are entitled to one LTC and one LTA according to rates in the eligible grade, in a block of four years.

115 MECON 116 A.2 Reconciliation of Present Value of Defi ned Benefi t Obligation (DBO) (₹ in lakhs) 1 2 3 4 5 6 7 8

Post Post Employee Leave Retirement Retirement Retirement Long Service Sl. Particulars Gratuity Family Benefit LTC/LTA Encashment Medical Settlement Gift Award Scheme Benefits Benefits

1 P.V. of DBO (Opening) 9,127.84 11,980.00 1,976.53 181.34 222.06 24.04 25.78 71.93

P.V. of DBO (Opening)(Previous Year) 5,298.87 11,707.77 1,483.64 188.30 246.33 25.21 20.30 80.52

2 Current Service Cost 297.42 763.14 — 7.99 — 1.55 43.44 —

Current Service Cost (Previous Year) 154.40 789.87 - 10.79 - 1.45 2.11 -

3 Interest Cost 693.71 910.48 150.22 13.78 16.88 1.83 1.96 5.47

Interest Cost (Previous Year) 365.69 785.27 104.90 13.08 16.67 1.75 1.44 6.81

4 Actuarial Loss/ (Gain) 185.60 (392.63) 339.73 (38.83) 89.65 8.76 (1.23) (5.13)

Actuarial Loss/ (Gain) (Previous Year) (165.95) (387.70) 410.71 (20.92) 21.63 (3.82) 1.98 10.20

5 Premium Paid (21.78) — — — — — — —

Premium Paid (Previous Year) (7.84) ------

6 Past Service Cost — — — — — — — —

Past Service Cost (Previous Year) 4,053.85 - 70.21 - - - - -

7 Benefit Paid (857.25) (876.55) (114.69) (7.86) (62.01) (0.72) (6.45) (9.56)

Benefit Paid (Previous Year) (571.18) (915.21) (92.93) (9.91) (62.57) (0.55) (0.05) (25.60)

8 P.V. of DBO (Closing) 9,425.54 12,384.44 2,351.79 156.42 266.58 35.46 63.50 62.71

P.V. of DBO (Closing) (Previous Year) 9,127.84 11,980.00 1,976.53 181.34 222.06 24.04 25.78 71.93 MECON MECON Limited

A.3 Reconciliation of Fair Value of Plan Assets and Obligations. The Company has wholly/partly funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by LIC through whom the investments have been made by the Fund. Investments of the fund is also made in flexi deposit account with Banks. The reconciliation of Fair Value of Plan Assets of the Gratuity Fund and Defined Benefit Gratuity obligations are as under: (₹ in lakhs)

Sl. Particulars As on 31.03.2019 As on 31.03.2018

1 F.V of Plan Assets (Opening) 5,107.85 5,274.88

2 Interest Income 349.21 376.73

3 Benefit Payment (845.94) (552.21)

4 Contributions made 21.34 8.45

5 Actuarial (Loss)/ Gain - -

6 F.V. of Plan Assets (Closing) 4,632.46 5,107.85

7 P.V. of D.B.O. (Closing) 9,425.54 9,127.84

Net liability / (assets) recognised in the Balance Sheet 4,793.08 4,019.99

The Company expects to contribute the amount to the Gratuity Fund during the Year 2019-20 after considering liability and fund position. A.4 Provident Fund Company’s contribution paid/payable during the year to the Provident Fund Trust are recognised in the Statement of Profit & Loss. The Company’s Provident Fund Trust is exempted under section 17 of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis- a-vis statutory rate. The Company has already made adequate provisions in the accounts based on actuarial valuation of Provident Fund. The defined benefit obligations , other than Gratuity and Provident fund, are unfunded.

117 MECON 118 A.5 Expenses recognised in Statement of Profi t & Loss (₹ in lakhs) 1 2 3 4 5 6 7 8 Post Post Employee Long Sl. Particulars Leave Retirement Retirement Family Retirement Gratuity Service LTC/LTA Encashment Medical Settlement Benefit Gift Award Benefits Benefits Scheme 1 Current Service Cost 297.42 763.14 — 7.99 — 1.55 43.44 — Current Service Cost (Previous Year) 154.40 789.87 - 10.79 - 1.45 2.11 - 2 Past Service Cost — — — — — — — — Past Service Cost (Previous Year) 4,053.85 - 70.21 - - - - - 3 Interest Cost 693.71 910.48 150.22 13.78 16.88 1.83 1.96 5.47 Interest Cost (Previous Year) 365.69 785.27 104.90 13.08 16.67 1.75 1.44 6.81 4 Interest Income on Plan Assets (388.20) — — — — — — — Interest Income on Plan Assets (Previous Year) (384.57) ------Expenses Recognised in statement of Profit and Loss 602.93 1,673.62 150.22 21.77 16.88 3.38 45.40 5.47 Expenses Recognised in statement of Profit and Loss (Previous Year) 4,189.37 1,575.14 175.11 23.87 16.67 3.20 3.55 6.81 A.6 Expenses recognised in Other Comprehensive Income (₹ in lakhs) 1 2 3 4 5 6 7 8 Post Post Employee Long Sl. Particulars Leave Retirement Retirement Family Retirement Gratuity Service LTC/LTA Encashment Medical Settlement Benefit Gift Award Benefits Benefits Scheme 1 Re-remeasurements due to changes in financial assumptions (37.60) (59.96) (11.76) (0.55) — (0.12) (0.25) — Re-remeasurements due to changes in financial assumptions (124.55) (303.07) - (3.00) - (0.64) 4.29 - (Previous Year) 2 Re-remeasurements due to changes in experience adjustments 223.20 (332.67) 351.49 (38.28) 89.65 8.88 (0.98) (5.13) Re-remeasurements due to changes in experience adjustments (41.40) (84.63) 410.71 (17.92) 21.63 (3.18) (2.32) 10.20 (Previous Year) 3 Return on Plan Assets (excluding Interest Income) — — — — — — — — Return on Plan Assets (excluding Interest Income) (Previous Year) ------Expenses recognised in Other Comprehensive Income 185.60 (392.63) 339.73 (38.83) 89.65 8.76 (1.23) (5.13) Expenses recognised in Other Comprehensive Income (Previous Year) (165.95) (387.70) 410.71 (20.92) 21.63 (3.82) 1.97 10.20 MECON MECON Limited

A.7 Actuarial Assumptions

2018-19 2017-18 1 Discount Rate (per annum) 7.65% 7.60% 2 Mortality Rate Indian Assured Lives Mortality Indian Assured Lives Mortality (2006-08) Ultimate (2006-08) Ultimate 3 Withdrawal Rate 0.10% to 0.50% depending on age 0.10% to 0.50% depending on age (per annum) group. 10% flat at all age groups for group. 10% flat at all age groups Contract Employees for Contract Employees 4 Medical Inflation Rate 12% for first 5 years and thereafter 12% for first 5 years and thereafter (per annum) 8% 8% 5 Rate of return on Plan 7.29% - 7.80% 7.4% - 7.65% Assets (per annum) 6 Salary Escalation 16% on Basic Pay 16% on Basic Pay (per annum) The estimate of future salary increase considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors.

A.8 Financial Assumptions Sensitivity Analysis (₹ in lakhs)

0.5 %age 0.5 %age 0.5 %age 0.5 %age Sl. decrease in increase in Particulars decrease in increase in No. Discount Discount Salary Rate Salary Rate Rate Rate 1 Gratuity 9,770.18 9,105.67 9,379.42 9,456.09 2 Leave Encashment 13,008.29 11,812.33 11,806.42 13,009.21 3 Post Retirement Settlement Benefits 162.16 150.85 150.81 162.17 4 Employee Family Benefit Scheme 270.40 262.93 - - 5 Retirement Gift 36.58 34.37 - - 6 Long Service Award 66.03 61.01 - - 7 LTC/LTA 63.91 61.55 - -

A.9 Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post-retirement medical benefits scheme: (₹ in lakhs)

One percentage point One percentage point Sl. Particulars increase in medical decrease in medical No. inflation rate inflation rate 1 Increase/(decrease) on aggregate service cost and interest cost of post retirement 16.76 (14.50) medical benefits 2 Increase/(decrease) on present value of post retirement benefit obligations as at 31st, 259.82 (246.54) March, 2019

119 MECON

A.10 Expected Cash Flows for the following years (₹ in lakhs)

Period Gratuity Leave Encashment Year 1 1,089.77 912.18 Year 2 1,201.00 928.16 Year 3 1,092.85 1,035.04 Year 4 1,083.75 1,227.30 Year 5 938.79 1,544.55 Year 6 968.81 1,685.04 Next 6 years 3,050.58 5,052.17 B Defined Contribution Scheme B.1 Post Retirement Pension Benefits i) 10% of Basic Pay & Dearness Allowance for executives to be contributed by the Company w.e.f. 01.01.2007. ii) 6% of Basic Pay & Dearness Allowance for non-executives to be contributed by the Company w.e.f. 01.01.2012. B.2 Expenses recognised in Statement of Profit & Loss for the year (₹ in lakhs)

Particulars Post Retirement Pension Benefits 2018-19 2017-18 Expenses charged to Statement of Profit and Loss 1,623.47 1,599.35

40.11 DISCLOSURE UNDER IND AS-24 ON “RELATED PARTY DISCLOSURES” i) Related Parties and their relationships: Name of the Related Party Nature of Relationship M/s.Metallurgical & Engineering Consultants (Nigeria) Limited Joint Venture Company Board of Trustees, MECON Employees’ Provident Fund and Post Employment Benefit Plans Gratuity Fund Key Management Personnel Shri Atul Bhatt Chairman and Managing Director Shri P. K. Sarangi Director (Technical) Shri Goutam Chatterjee Director (Commercial) Shri Salil Kumar Director (Projects) Shri R. H. Juneja (w.e.f. 20.04.2018) Director (Finance) Shri Saraswati Prasad, IAS Government Director Shri T. Srinivas (from 24.05.2018 to 16.07.2018) Government Director Shri Sunil Barthwal, IAS (upto 24.05.2018) Government Director Smt Rasika Chaube (w.e.f. 16.07.2018) Government Director Shri Sisir Kumar Appikatla Independent Director Shri Deepak Krishan (w.e.f. 23.01.2019) Independent Director

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ii) The details of transactions between the Company and the Related Parties other than Key Managerial Personnel: (₹ in lakhs)

M/s.Metallurgical & Engineering Sl.No. Name of the related party Consultants (Nigeria) Limited Particulars 2018-19 2017-18 1. Transaction during the period NIL NIL 2. Outstanding Balances as at the end of the period NIL NIL

Sl. No. Name of the related party Board of Trustees, MECON Employees’ Provident Fund and Gratuity Fund Particulars 2018-19 2017-18 1. Transaction during the period 1,877.88 1,768.88 2. Outstanding Balances as at the end of the period NIL NIL

iii) The details of transactions and balances pertaining to Key Managerial Personnel: (₹ in lakhs)

Sl. Particulars 2018-19 2017-18 No. 1. Short-Term Employee Benefits 139.95 114.18 2. Post Employment Benefits 86.97 53.76 3. Other Long-Term Benefits 85.12 33.38 4. Termination Benefits — – 5. Share-based Payment — – 6. Sitting fees 1.50 1.00 7. Outstanding Balances as at the end of the period NIL NIL Short-Term Employee Benefits excludes medical facilities provided at Company’s hospital, monetary value of which is not ascertainable. iv) Government-related Entities The Company is a wholly owned Government of India, Central Public Sector Enterprise under the administrative control of Ministry of Steel. The company applies exemption from detailed disclosures required under Ind AS-24 with respect to related party transactions and outstanding balances, including commitments, with Government and Government related Entities. The significant transactions are with other Central Public Sector Enterprises which are under control of Government of India. The transactions with such entities are normal, based on market driven rates at arms length price. a) Name of Government-related entities and description of relationship wherein significant amount of transaction carried out :

Sl. Government-related Entities Relationship No. 1. Airports Authority of India Central Public Sector Enterprise 2. Bharat Electronics Limited Central Public Sector Enterprise 3. Bharat Petroleum Corporation Limited Central Public Sector Enterprise 4. Bharat Sanchar Nigam Limited Central Public Sector Enterprise

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Sl. Government-related Entities Relationship No. 5. Central Coalfields Limited Central Public Sector Enterprise 6. GAIL (India) Limited Central Public Sector Enterprise 7. Hindustan Copper Limited Central Public Sector Enterprise 8. Hindustan Petroleum Corporation Limited Central Public Sector Enterprise 9. Indian Oil Corporation Limited Central Public Sector Enterprise 10. KIOCL Limited Central Public Sector Enterprise 11. Mangalore Refinery & Petrochemicals Limited Central Public Sector Enterprise 12. National Aluminium Company Limited Central Public Sector Enterprise 13. NLC India Limited Central Public Sector Enterprise 14. NMDC Limited Central Public Sector Enterprise 15. Oil India Limited Central Public Sector Enterprise 16. Oil & Natural Gas Corporation Limited Central Public Sector Enterprise 17. Rashtriya Ispat Nigam Limited Central Public Sector Enterprise 18. Steel Authority of India Limited Central Public Sector Enterprise 19. Uranium Corporation of India Limited Central Public Sector Enterprise

b) Transactions with Government-related Entities : (₹ in lakhs)

Sl. Nature of Name of the Entity 2018-19 2017-18 No. Transaction Rendering of Services: 1. Bharat Electronics Limited Revenue 833.39 602.32 2. Bharat Petroleum Corporation Limited Revenue 455.38 260.01 3. GAIL (India) Limited Revenue 9,554.66 10,603.52 4. GAIL (India) Limited Estate Income 125.21 78.97 5. Hindustan Copper Limited Revenue 69.06 47.00 6. Hindustan Petroleum Corporation Limited Revenue 716.64 402.69 7. Indian Oil Corporation Limited Revenue 195.59 146.24 8. KIOCL Limited Revenue 146.10 51.95 9. Mangalore Refinery & Petrochemicals Limited Revenue 326.35 287.70 10. National Aluminium Company Limited Revenue 161.35 79.60 11. NMDC Limited Revenue 5,272.69 3,590.77 12. Oil & Natural Gas Corporation Limited Revenue 50.47 95.47 13. Oil India Limited Revenue 232.91 – 14. Rashtriya Ispat Nigam Limited Revenue 1,765.18 2,006.63 15. Steel Authority of India Limited Revenue 8,664.69 12,865.61 16. Steel Authority of India Limited Sharing of Common 1,090.00 1,090.00 Expenses 17. Uranium Corporation of India Limited Revenue 66.43 199.66 18. Others Revenue / Others 104.78 782.74 Contd... 122 MECON MECON Limited

(₹ in lakhs)

Sl. Nature of Name of the Entity 2018-19 2017-18 No. Transaction Receiving of Services: 1. Bharat Sanchar Nigam Limited Telephone / Internet 54.44 70.85 Charges 2. Others Telephone / Internet 224.77 100.90 / Consulting / Estate Charges, etc. Amount Receivable: 1. Bharat Electronics Limited Trade Receivable 270.64 481.17 2. Bharat Petroleum Corporation Limited Trade Receivable 340.87 95.40 3. Central Coalfields Limited Trade Receivable 142.50 318.21 4. GAIL (India) Limited Trade Receivable 7,183.21 4,262.17 5. Hindustan Petroleum Corporation Limited Trade Receivable 464.58 229.31 6. Indian Oil Corporation Limited Deposits Receivable 67.48 67.48 7. Indian Oil Corporation Limited Trade Receivable 134.89 96.50 8. Mangalore Refinery & Petrochemicals Limited Trade Receivable 121.75 134.78 9. National Aluminium Company Limited Trade Receivable 153.32 169.74 10. NMDC Limited Trade Receivable 1,956.41 1,443.43 11. NLC India Limited Trade Receivable 592.82 662.16 12. Oil India Limited Trade Receivable 58.90 – 13. Oil & Natural Gas Corporation Limited Trade Receivable 182.69 64.04 14. Rashtriya Ispat Nigam Limited Trade Receivable 3,854.73 4,589.28 15. Steel Authority of India Limited Trade Receivable 19,258.60 15,861.26 16. Others Trade Receivable / 370.28 354.30 Deposits Receivable The above transactions with the Government-related Entities cover transactions that are significant individually. The Company has also entered into transactions, with other various Government-related Entities, which are insignificant, individually and hence not disclosed individually. 40.12 DISCLOSURE UNDER IND AS-28 ON “INVESTMENTS IN ASSOCIATES AND JOINT VENTURES” As per Ind AS-28 “Investments in Associates and Joint Ventures”, the Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company, incorporated in Nigeria, are given below: (₹ in lakhs)

% of Contin- Capital Name of the Joint Company’s Liabili- Expendi- Assets Income gent Commit- Venture Company Ownership ties ture Liabilities ments Interest Metallurgical 50 3.41 313.36 11.76 46.14 NIL NIL & Engineering (50) (27.60) (335.47) (15.15) (55.48) (NIL) (NIL) Consultants (Nigeria) Limited

Figures in bracket relates to previous year

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The above figures are based on the audited accounts of Metallurgical & Engineering Consultants (Nigeria) Ltd. for the year ending 31.12.2014. Reporting currency of Metallurgical & Engineering Consultants (Nigeria) Ltd. is Naira. Assets and Liabilities are reported using the closing rate of exchange as on 31.12.2014 whereas Income and Expenditure are reported using the average exchange rate in force during the year 2014 as available. 40.13 DISCLOSURE UNDER IND AS-33 ON “EARNINGS PER SHARE” Calculation of Earnings per Share:

Sl. Particulars 2018-19 2017-18 No.

a) Net Profit / (Loss) for the period attributable to Equity 1,374.01 5,802.33 Shareholders (₹ in lakhs)

b) Weighted average number of Equity Shares (Refer Note 20) 4,01,38,360 4,01,38,360

c) Earnings Per Share (Basic and Diluted) (a) / (b) (in ₹) 3.42 14.46

d) Face Value per share (in ₹) 10.00 10.00

40.14 DISCLOSURE AS PER IND AS-108 ON “OPERATING SEGMENTS” A. General Information i) The Company has identified three “Strategic Business Units” (SBUs) as “Operating Segments”. These “Operating Segments” are reported based on nature of services offered by these segments, technology / marketing strategies of the businesses, organization structure & the management reporting system. Operating Segment Composition: a) “Metals” includes Iron & Steel, Rolling Mills, Non-Ferrous, Raw Materials & Mining, Refractories etc. b) “Energy” includes Renewable Energy, Power plant- Thermal & Hydel, Transmission & Distribution, RLA & RMU studies, Oil & Gas pipelines, Petro-chemical & Refineries, POL Depots, Retail Outlets etc. c) “Infrastructure” includes Architecture & Town Planning, Ports & Material Handling, Roads, Highways, Bridges & Flyovers, Defence, Environmental & Hydro engineering, Management Advisory Services, Information Technology etc. ii) The SBUs are monitored by the Board of Directors, who is collectively the Company’s Chief Operating Decision Maker (CODM) and strategic decisions about performance assessment are made on the basis of Segment Operating Results. iii) Segment Revenue comprises Revenue from Engineering & Consultancy Services and Revenue from Construction Contracts for the Jobs in India and abroad. iv) Unallocated corporate expenditure includes expenses incurred on corporate services provided to Operating Segments and other expenses not allocable on a reasonable basis to Operating Segments. v) Segment Assets and Segment Liabilities represent operating assets and liabilities respectively which are directly attributable to the segment or allocated to the segment on a reasonable basis. vi) Property, Plant & Equipment and Intangible Assets used in the Company’s business are common in nature for all by and large and therefore are not directly attributable to the segment or can be allocated to the segment on a reasonable basis. However, depreciation, amortization and impairment expenses, if any, are allocated to segment based on manhours consumed.

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B. Information / Reconciliation of Reportable Segment Profit or Loss, Assets and Liabilities (₹ in lakhs)

SEGMENTS METALS ENERGY INFRASTRUCTURE TOTAL Current Previous Current Previous Current Previous Current Previous Particulars Year Year Year Year Year Year Year Year I. SEGMENT REVENUE a. Segment Revenue 20,785.76 20,070.35 17,582.32 17,664.00 8,649.16 6,838.27 47,017.24 44,572.62 from External Customers b. "Intersegment ------Revenues" c. Other Operating 707.38 2,321.71 151.14 30.02 44.60 1,112.73 903.12 3,464.46 Revenue REVENUE FROM 21,493.14 22,392.06 17,733.46 17,694.02 8,693.76 7,951.00 47,920.36 48,037.08 OPERATIONS a. Unallocated Interest ------5,119.69 10,924.95 and Other Income II. TOTAL INCOME 21,493.14 22,392.06 17,733.46 17,694.02 8,693.76 7,951.00 53,040.05 58,962.03 III. SEGMENT RESULTS (1,712.71) (7,819.33) 2,245.67 2,197.88 (2,520.65) (812.14) (1,987.69) (6,433.59) [Profit/(Loss)] a. Interest Income ------3,770.82 3,872.74 b. Non Operating ------1,348.87 7,052.21 Income c. Finance Costs ------142.11 165.91 d. Non Operating Loss ------0.17 2.02 e. Accretion / ------(1,992.28) 78.40 (Decretion) to Jobs- in-Progress IV. PROFIT/(LOSS) ------997.44 4,401.83 BEFORE TAX Income Taxes ------(376.57) (1,400.50) V. PROFIT/(LOSS) ------1,374.01 5,802.33 AFTER TAX VI. OTHER INFORMATION a. Segment Assets 45,175.12 39,012.57 17,199.15 15,001.91 9,465.97 9,048.66 71,840.24 63,063.14 b. Unallocated ------71,665.22 67,784.55 Corporate Assets c. Total Assets ------143,505.46 130,847.69 d. Segment Liabilities 49,906.07 56,516.20 8,768.36 9,238.22 11,646.95 12,176.31 70,321.38 77,930.73 e. Unallocated ------39,138.13 32,332.89 Corporate Liabilities f. Total Liabilities ------109,459.51 110,263.62 g. Depreciation & 391.53 497.78 247.76 308.24 127.04 129.44 766.33 935.46 Amortisation h. Non-Cash 748.65 1,303.71 2,515.32 83.69 456.77 196.13 3,720.74 1,583.53 Expenses other than Depreciation i Capital Employed ------25,696.12 12,940.91

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C. Information about geographical areas Disclosure of Information on Geographical Segment is not made considering the nature of business activities / operations being carried out by the Company mainly within the country and therefore there is no reportable geographical segment. D. Information about major customers During the year ended 31st March, 2019, ₹13,393.36 lakhs (Previous Year ₹11,507.83 lakhs) of Company’s revenues, each exceeding 10% in the “Metals” Segment, are derived from 2 (two) (Previous Year 1(one)) external customers. During the year ended 31st March, 2019, ₹9,554.66 lakhs (Previous Year ₹10,568.48 lakhs) of Company’s revenues, each exceeding 10% in the “Energy” Segment, are derived from 1 (one) (Previous Year 1 (one)) external customers. During the year ended 31st March, 2019, ₹NIL (Previous Year ₹NIL) of Company’s revenues, each exceeding 10% in the “Infrastructure” Segment, are derived from external customers. 40.15 DISCLOSURE AS PER IND AS-115 “REVENUE FROM CONTRACTS WITH CUSTOMERS” a) Disaggregation of revenue into operating segments and geographical areas for the year ended 31st March, 2019 is presented below:- (₹ in lakhs)

Revenue as per Ind AS 115 Other Total as per Profit Segment Operating & Loss / Segment Domestic Foreign Total Revenue Reporting Metals 20,689.82 95.94 20,785.76 707.38 21,493.14 Energy 17,215.87 366.45 17,582.32 151.14 17,733.46 Infrastructure 8,649.16 - 8,649.16 44.60 8,693.76 Total 46,554.85 462.39 47,017.24 903.12 47,920.36

b) The opening and closing balances of contract assets and contract liabilities from contracts with customers are presented below:- (₹ in lakhs)

Particulars Contract Assets Contract Liabilities Opening Balance (As on 01.04.2018) NIL 5,064.12 Closing Balance (As on 31.03.2019) NIL 5,010.52

c) During the year ended 31st March, 2019, the company recognized revenue of ₹558.13 Lakhs arising from opening contract liabilities as of 1st April, 2018. d) The aggregate value of remaining performance obligations that are completely or partially unsatisfied as of 31st March, 2019 is ₹1,90,743.34 Lakhs and the Company will recognise this as revenue as and when performance obligations are satisfied. e) Determining the timing of satisfaction of performance obligations:- The Company recognizes revenue using Output method based on satisfaction of the performance obligation/ right to receive payment. Output method measures progress towards satisfaction of performance obligations in a manner that provides a faithful depiction of the transfer of goods or services. f) Determining the transaction price with respect to estimating variable consideration:- In cases where liquidated damages arises out of contractual terms when the work is not completed within the completion schedule or for non-achievement of any parameter, the liquidated damages amount is adjusted from the contract fee for revenue recognition.

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g) Effective from 1st April, 2018, the Company has adopted Ind AS-115 using the cumulative catch up method. The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information have not been restated due to initial application of this standard. The Company recognized a net increase in opening retained earnings by ₹13,485.57 lakhs as on 1st April, 2018 due to the cumulative impact of adopting the new revenue standard. The impact was primarily due to change in accounting policies for Revenue Recognition. Pursuant to adoption of Ind AS 115, Profit After Tax (PAT) has increased by ₹60.96 lakhs and Total Assets & Liabilities have increased by ₹5,739.40 lakhs. h) Revenue from foreign jobs is recognised on the basis of value of invoices raised in line with approved accounting policy and Indian Accounting Standards as applicable. 40.16 Considering the nature of Company’s business and the type of assets held by the Company, there is no indication of loss due to impairment of assets as at 31.03.2019 as per Ind AS- 36. 40.17 Other Income includes interest on deposits with banks / financial institutions / employees, other miscellaneous income, etc. which are recognized on accrual basis. However, dividend income from investments is recognized as and when the right to receive the payment is established. 40.18 In case of foreclosure of jobs, the fee mutually settled between the client and the Company is considered as 100% value of work done and income is accounted for accordingly. In case, the settled fee is less than the income already booked, such excess income is charged to revenue under the head “Fees Withdrawn” (Refer Note 37). 40.19 Provision against penalties and fines are made when it is deducted by the client and admitted by the Company. 40.20 Provisions against liquidated damages are not made to the extent amount adjusted from revenue where liquidated damages amount has been deducted by the client. 40.21 Disclosure on R&D: (₹ in lakhs)

Particulars 2018-19 2017-18 Opening Balance of Fund 135.46 135.46 Add : Allocation / Provision made during the period 29.00 NIL Less : Adjustment / Utilization made during the period 1.88 NIL Closing Balance of Fund (Refer Note 15) 162.58 135.46

Necessary R&D Fund have been created debiting P/L account and R&D expenses have been debited to R&D Fund in line with DPE guidelines issued from time to time as applicable. 40.22 Disclosure on CSR: (₹ in lakhs)

Particulars 2018-19 2017-18 CSR Projects /Programmes, etc. 16.92 40.63 Others NIL 1.69 Total Amount Spent 16.92 42.32 Amount unspent out of prescribed allocated sum during the period NIL NIL Necessary CSR & SD Fund have been created debiting P/L account upto the financial year 2013-14 and CSR & SD expenses have been debited to CSR & SD Fund in line with DPE guidelines issued from time to time as applicable. Unspent amount carried forward in CSR & SD Fund is ₹456.07 lakhs as on 31.03.2019 (₹456.07 lakhs as on 31.03.2018).

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From 2014-15 onwards necessary CSR amount is appropriated / transferred to CSR Activity Reserve and CSR amount spent is adjusted / transferred from CSR Activity Reserve. During the year 2018-19 ₹87.96 lakhs (Previous Year ₹ NIL) is transferred from Surplus to CSR Activity Reserve. Unspent CSR amount carried forward under the head CSR Activity Reserve is ₹71.04 lakhs as on 31.03.2019 (₹NIL as on 31.03.2018). 40.23 Information in respect of micro and small enterprises as required by Micro, Small & Medium Enterprises Development Act, 2006 (MSMED Act) read with notification of Ministry of Corporate Affairs dated 11th October, 2018 to the extent information available with the Company are as under: (₹ in lakhs)

Sl. As at As at Particulars No. 31.03.2019 31.03.2018 (a) Amount remaining unpaid to any supplier: - Principal Amount, remaining unpaid 3,828.35 4,018.75 - Interest due on Principal Amount, remaining unpaid – – (b) Amount of interest paid in terms of Section 16 of the MSMED – – Act along with the amount paid to the suppliers beyond appointed day during the year (c) Amount of interest due and payable for the period of delay – – in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act. (d) Amount of interest accrued and remaining unpaid at the end – – of the year (e) Amount of further interest remaining due and payable even in – – the succeeding year, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23 of the MSMED Act. 40.24 Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss, unused tax credits (MAT Credit entitlement) or deductible temporary difference will be utilized against future taxable income. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. 40.25 Wage revision is due for non-executive employees w.e.f. 01.01.2017. During the year 2018-19, provision has been made for ₹75.29 lakhs (Previous Year ₹17.69 lakhs) towards wage revision in respect of non-executive employees, based on estimate and information as available, etc. 40.26 Pay revision is due for executive employees w.e.f. 01.01.2017. However, considering the DPE OM dated 03.08.2017 and the financial status of the company, provision for pay revision in respect of executive employees is not made during the year. However, the matter will be reviewed in 2019-20 based on company’s performance. etc. 40.27 Advance of ₹756.86 lakhs was given to M/s Mysore Construction Company (W.O. No. 11.51/Q6AA/ Civil/7720 dated 05.12.2005) against valid Bank Guarantees. The Company lodged claims within due date against Bank Guarantees submitted by the party. However, M/s Mysore Construction Company sought injunction against the encashment of Bank Guarantee from Hon’ble Principal District Court at Cuddalore. Hon’ble Principal District Court, Cuddalore directed M/s Mysore Construction Company to keep the Bank Guarantees in existence till disposal of petition. 40.28 Consequent to the execution case between M/s Hindustan Controls and Equipment Pvt. Ltd and M/s MECON Limited, an account payee cheque of ₹2,084.53 lakhs dated 06.08.2019 favoring M/s Hindustan Controls and Equipment Pvt. Ltd was deposited in the Commercial Court, Ranchi (execution court) on

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06.08.2019 by the Company against warrant of attachment issued by the Commercial Court, Ranchi. Pending final decision of the Company’s appeal in Hon’ble Jharkhand High Court, the Company requested the Commercial Court to direct the claimant to submit some form of security in the Commercial Court, Ranchi in order to withdraw the deposited cheque and the same has been treated as contingent liability. 40.29 Financial Instruments: Financial assets / liabilities are recognized initially at fair value and transaction cost that is attributable to the acquisition of the financial asset is also adjusted. Subsequent to initial recognition, all financial assets are measured either at amortised cost or at fair value. Financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Valuation process and technique used to determine fair value: 1) The carrying amount of financial assets and liabilities with less than 12 months are considered to be representative of their fair value. 2) Investments in associate and joint venture are measured at cost. Risk Management The Company is exposed to various risks in relation to financial instruments. The main types of risks are market risk, credit risk and liquidity risk. The Company’s risk management is coordinated at its headquarters, in close cooperation with the board of directors, and focuses on actively securing the Company’s short to medium-term cash flows by minimising the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns. The company does not actively engage in the trading of financial assets. The most significant financial risk to which the Company is exposed is credit risk. Credit Risk Credit risk is the risk that a counter party fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments. The Company’s maximum exposure to credit risk is limited to the carrying amount of following types financial assets. ŠŠ Cash and cash equivalents ŠŠ Trade Receivables ŠŠ Other financial assets The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporated this information into its credit risk controls. a) Credit risk management Cash and cash equivalent Credit risk related to cash and cash equivalents is managed by only accepting highly rated bank deposits and accounts in different banks across the country. Trade Receivables The Company closely monitors the credit-worthiness on the Trade Receivables and only provide service to credit worthy parties. Other financial assets Other financial assets for example loans and advances to employees and other Credit risk related to these other financial assets is managed by monitoring the recoverability of such amount continuously. b) Expected credit losses Company provides expected credit losses based on the following: Trade Receivables The Company recognizes lifetime expected credit losses on Trade Receivables using a simplified approach and uses historical information to arrive at loss percentage relevant to each category of trade receivables:

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(₹ in lakhs) 0-12 12-24 24-36 More than Ageing (As at 31st March, 2019) Total months months months 36 months Gross carrying amount 30,168.14 6,787.19 3,419.85 11,903.63 52,278.81 Expected credit loss provision 681.80 153.39 77.29 6,780.22 7,692.70 Carrying amount of trade receivables (Net 29,486.34 6,633.80 3,342.56 5,123.41 44,586.11 of impairment)

0-12 12-24 24-36 More than Ageing (As at 1st April, 2018) Total months months months 36 months Gross carrying amount 27,177.24 3,470.41 3,305.77 9,599.04 43,552.46 Expected credit loss provision 559.61 71.25 68.10 4,255.61 4,954.57 Carrying amount of trade receivables (Net 26,617.63 3,399.16 3,237.67 5,343.43 38,597.89 of impairment)

0-12 12-24 24-36 More than Ageing (As at 31st March, 2018) Total months months months 36 months Gross carrying amount 27,165.53 3,458.89 3,306.51 9,555.70 43,486.63 Expected credit loss provision 561.28 71.25 68.11 4,208.93 4,909.57 Carrying amount of trade receivables (Net 26,604.25 3,387.64 3,238.40 5,346.77 38,577.06 of impairment) Reconciliation of Expected Credit Loss Provision (₹ in lakhs) Particulars Amount As at 31st March, 2018 4,909.57 Changes in provision 45.00 As at 1st April, 2018 4,954.57 Changes in provision 2,738.13 As at 31st March, 2019 7,692.70

Other financial assets Company provides for expected credit losses on financial assets other than trade receivables by assessing individual financial instruments for expectation of any credit losses. Since this category includes financial assets of varied natures and purpose, there is no trend that the company can draw to apply consistently to entire population. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature. 40.30 Previous year’s / year-to-date figures have been regrouped / recast wherever necessary in the Balance Sheet, Statement of Profit & Loss, Cash Flow Statement and Notes, etc. 40.31 Recent Indian Accounting Standards (Ind AS) pronouncements Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, 2019 has notified new and amendments to Ind AS effective from 1st April, 2019 which the Company shall follow as applicable: a) Ind AS 116 – Leases Ind AS 116 will replace the existing leases standard, Ind AS 17 Leases. Ind AS 116 sets out the principles for recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces

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a single, on-balance sheet lessee accounting model for lessees. A lessee recognises right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17. The Company shall apply the modified retrospective method of the standard to its leases, retrospectively, with the cumulative effect of initially applying the standard recognised at the date of initial application, i.e., 1st April, 2019. Under the modified retrospective approach, the lessee records the lease liability as the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as at 1st April, 2019. The right-of-use asset is recognised at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognised under Ind AS 17 immediately before the date of initial application. In accordance with the standard, the Company will not apply the requirements of Ind AS 116 to short-term leases and leases for which the underlying asset is of low value. On transition, the Company will be using the practical expedient provided by the standard and therefore, will not reassess whether a contract, is or contains a lease, at the date of initial application. The Company does not expect any significant effect on account of adoption of Ind AS 116. b) Ind AS 12 – Income Taxes (amendments relating to income tax consequences of dividend and uncertainty over income tax treatments) The amendment relating to income tax consequences of dividend clarify that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. The Company does not expect any impact from this pronouncement. The amendment to Appendix C of Ind AS 12 specifies that the amendment is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. It outlines the following: (1) the entity has to use judgement, to determine whether each tax treatment should be considered separately or whether some can be considered together. (2) the entity is to assume that the taxation authority will have full knowledge of all relevant information while examining any amount (3) entity has to consider the probability of the relevant taxation authority accepting the tax treatment and the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates would depend upon the probability. The Company does not expect any significant impact of the amendment on its financial statements. c) Ind AS 19 – Employee Benefits (Plan Amendment, Curtailment or Settlement) The amendments require the Company ŠŠ to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and ŠŠ to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling. The Company does not have any impact on account of this amendment. d) Ind AS 23 – Borrowing Costs The amendments require that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings. The Company does not expect any impact from this amendment.

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FORM AOC-I

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Name of Joint Venture M/s Metallurgical & Engineering Consultants (Nigeria) Limited

1. Latest audited Balance Sheet Date For the year ending on 31.12.2014

2. Date on which the Joint Venture was associated 28.10.1982 or acquired

3. Shares of Joint Ventures held by the company on the year end

No. 5000

Amount of Investment in Joint Venture ₹ 7.60 lakhs

Extent of Holding % 50%

4. Description of how there is significantMajority of the members of the Board of M/s Metallurgical influence & Engineering Consultants (Nigeria) Limited are also Directors / Senior Managerial Personnel of MECON Limited.

5. Reason why the associate/joint venture is not Consolidation is not applicable for Joint Venture consolidated company.

6. Networth attributable to Shareholding as per (-) ₹309.94 lakhs (50%) latest audited Balance Sheet

7. Profit / Loss for the year (-) ₹34.38 lakhs

i. Considered in Consolidation Not Applicable

ii. Not Considered in Consolidation Not Applicable

In terms of our report of even date For V. ROHATGI & CO. CHARTERED ACCOUNTANTS

Sd/- Sd/- Sd/- Sd/- Sd/- (PRAVEER RANJAN) (RAVI BAMBHA) (S. SAMANTA) (R. H. JUNEJA) (ATUL BHATT) PARTNER COMPANY SECRETARY DY. GENERAL DIRECTOR (FINANCE) CHAIRMAN and Memb.No.076295 MANAGER I/C MANAGING DIRECTOR Firm Regn. No.000980C (FINANCE)

Place : Ranchi Date : 11th September, 2019 UDIN : 19076295AAAAAB1433

132 GLIMPSES OF CSR ACTIVITIES

CMD MECON Shri Atul Bhatt, welcoming Hon’ble Shri Dharmendra Pradhan, Hon’ble Shri Dharmendra Pradhan, Minister of Petroleum & Natural Gas and Minister of Steel, Minister of Petroleum & Natural Gas and Minister of Steel along with Shri Atul Bhatt, CMD MECON, Shri PK Sarangi, Director (Technical), Shri Goutam Chatterjee, Director (Commercial), Shri Salil Kumar, Director (Projects) and Shri RH Juneja, Director (Finance) during Review meeting of MECON, at Ranchi

Foundation Laying of Boys Hostel Building at Orphanage Cataract Surgery of Villagers of Mecon's Adopted Village at (Anmol Basera), Village - Sungi, Karra, District - Khunti Ispat Hospital, Shyamali

Smt. Rasika Chaube, Additional Secretary, Ministry of Steel, being briefed about Shri Yogendra Paswan, member of National Commission for Scheduled Caste various projects of MECON during her visit to technical sections of MECON (NCSC) during his visit to MECON

Annual Examination of Stitching Training Centres Health Camp at Adopted Village - Sungi, Karra, District - Ranchi

Under the aegis of Ministry of Steel, MECON participated in METEC 2019 at Shri Atul Bhatt, CMD MECON, addressing the gathering at India Steel 2019, Dusseldorf, Germany, to showcase India’s Steel Growth story at Indian Steel Pavilion. 4th International Exhibition & Conference on Steel Sector, at Mumbai.

Painting Competition (Swacchta Abhiyan) for the School Children Swacchta Abhiyan at Adopted Village - Pancha, of Adopted Village - Sungi, Karra, District - Khunti Bundu, District - Ranchi

MECON was awarded 1st prize in the16th National Award on Excellence in Cost Management MECON received 1st CSR Honourable Mention 2019- Excellence in CSR in Challenging Circumstances 2018, category- Consulting & others, by the Institute of Cost Accountants of India from Ministry of Corporate Affairs in presence of Hon'ble President of India and other dignitaries for implementation of Solar water pumping system in adopted village, Pancha YEARS OF CELEBRATING THE MAHATMA MECON MECON

MECON LIMTED (A Govt. of India Enterprise) MECON LIMITED

Head O ce Vivekananda Path, Doranda, Ranchi - 834002, Jharkhand, India CIN No. - U74140JH1973GOI001199 www.meconlimited.co.in For Enquiry Contact Joint General Manager (Marketing) Phone : +91-651-2483136/2481440, Fax : +91-651-2482214/ 2482189 E-mail: [email protected]

Major O ces

City Phone Fax e-mail Bangalore +91-80-26252000 +91-80-26576352 [email protected] New Delhi +91-11-22041872 +91-11-22041214 [email protected] th Navi Mumbai +91-22-27812155-58 +91-22-27812275 [email protected] 46 ANNUAL REPORT Kolkata +91-33-22822381-82 +91-33-22824441 [email protected] 2018-19 Find us on : @MECONLimited /@meconranchi meconranchi

396_1019_ Annapurna Press & Process 0651-2331800, [email protected]