44 ok¡ okf"kZd izfrosnu 44th Annual Report
2016-17
esdkWu fyfeVsM MECON LIMITED Hon'ble Shri Chaudhary Birender Singh, Union Shri Atul Bhatt, CMD MECON Ltd. welcoming Hon'ble Minister of Steel along with Dr. Aruna Sharma, Shri Chaudhary Birender Singh, Union Minister of Secretary, Ministry of Steel and Shri Atul Bhatt, CMD Steel at MECON. MECON Ltd. during India Steel Exhibition at Mumbai.
Hon'ble Shri Chaudhary Birender Singh, Union Minister of Steel along with Shri Atul Bhatt, CMD MECON Ltd. and Shri Anupam Prakash, Director, Ministry of Steel, during launching of ANGARA 7.1 and LOHA 4250 at MECON, Ranchi.
Hon'ble Shri Vishnudeo Sai, Union Minister of State for Steel alongwith Ms Urvilla Khati, Joint Secretary, Ministry of Steel and Shri Atul Bhatt, CMD, MECON Ltd.during SMART INDIA HACKATHON 2017 at Indore V I To strive to be a leading engineering, S I design and consultancy organisation O with global presence. N
To function as an internationally recognized M centre of excellence for providing reliable and quality engineering services I in the field of : a) Technical consultancy – design and S engineering with focus on metal sector. b) Design and supply of plant, equipment S and systems with focus on metal sector. c) Implementation of raw industrial I ventures from concept to commissioning. O d) Up-gradation and expansion of existing plants and infrastructure facilities. N Board of Directors
Shri Atul Bhatt CMD (w.e.f. 01.10.2016)
Shri P. K. Sarangi Shri Goutam Chatterjee Director (Technical) Director (Commercial) (w.e.f. 01.01.2017) (w.e.f. 20.03.2017)
Shri Saraswati Prasad, IAS Shri Syedain Abbasi, IAS Shri Sisir Kumar Appikatla Government Director Government Director Independent Director (w.e.f. 08.02.2017)
As on 21.09-2017 MANAGEMENT DURING THE YEAR
CMD
Shri A. K. Tyagi, (upto 30.09.2016)
Shri Atul Bhatt (w.e.f. 01.10.2016)
WHOLE TIME DIRECTORS
Shri Subir Chattopadhyay, Director (Project) (upto 31.08.2017)
Shri Deepak Dutta, Director (Commercial) (upto 31.10.2016)
Shri S. R. Sengupta, Director (Technology) (upto 31.12.2016)
Shri A. P. Singh, Director (Engineering) (upto 31.12.2016)
Shri P. K. Sarangi, Director (Technical) (w.e.f. 01.01.2017)
Shri Goutam Chatterjee, Director (Commercial) (w.e.f. 20.03.2017)
GOVERNMENT DIRECTORS
Smt. Bharathi S. Sihag, IAS (upto 30.11.2016)
Shri Saraswati Prasad, IAS (w.e.f 08.02.2017)
Shri Syedain Abbasi, IAS
INDEPENDENT DIRECTOR
Shri Sisir Kumar Appikatla REFERENCE INFORMATION
COMPANY SECRETARY
Shri Ravi Bambha
GENERAL MANAGER (FINANCE)
Shri R.H. Juneja
STATUTORY AUDITOR
M/s V. Rohatgi & Company, Chartered Accountants, 1st Floor, Sarjana Building,1, Main Road, Ranchi – 834001 Jharkhand
BANKERS
State Bank of India Bank of India
Union Bank of India IDBI Bank
Indian Overseas Bank Bank of Baroda
United Bank of India YES Bank
Andhra Bank HDFC Bank
Canara Bank Axis Bank
ICICI Bank IndusInd Bank
CONTENTS
Particulars Page No.
Chairman’s Speech 6-10
Board Report 11-36
Extract of Annual Return in Form MGT - 9 37-44
Disclosure of particulars of contracts / arrangements with related parties 45
Details on CSR & Sustainability activities during 2016-17 46-63
Particulars with respect to Technology Absorption 64-65
Management Discussion & Analysis Report 66-74
Report on Corporate Governance 75-81
Statutory Auditor's Report for the Financial Year 2016-17 82-90
Comments of the Comptroller & Auditor General of India 91
Balance Sheet as at 31.03.2017 92
Profit & Loss Account for the year ended 31.03.2017 93
Cash Flow Statement for the year ended 31.03.2017 (Indirect Method) 94-95
Notes including Significant Accounting Policy, Segment Reporting & 96-136 Form AOC-1 MECON Limited
Chairman’s Speech
engineering consultancy and industrial growth of our nation. Your Company has provided the technological impetus in virtually every venture of steel making in the country since the ‘60s and has played a stellar role in projects of national importance – be it the space programmes of ISRO - 2nd Launch Pad at Sriharikota, during a regime of technological denial, the Integrated Engine Testing Facility of IPRC, Mahendragiri, and Pay Load Assembly Building , Ahmedabad; Project Seabird Karwar Phase-I and now Phase-II for the Indian Navy, the CRGO Pilot Plant at NML for Ministry of Steel or the ambitious Urja Ganga Project of the Prime Minister - the list Dear Fellow Shareholders, is long and commendable. I am delighted to welcome you all to the 44th Annual As someone who has not experienced growing up General Meeting of your Company. This is my first the ranks of MECON, the hugely varied nature of the Annual General Meeting as the Chairman and Company’s business was indeed a revelation. I was Managing Director of your Company. I would like faced with a lot of legacy issues and uncertainties to reflect on the year gone by and share with you looming in the minds of the employees. My focus glimpses of the future direction of your Company. is to transform the Company from within, make But before all that, I, with your permission take the breakthrough improvements and radical changes Directors’ Report, audited annual accounts along through creating, communicating and embedding new with Independent Auditor’s Report and comments approaches and empowering all to act on this vision. of the Comptroller and Auditor General of India The impact that disruptive technologies are having thereon, which are already with you, as read on market scenario around the world is creating new business opportunities – capitalizing on which MECON – Taking Charge requires focus on collaborations and embracing I take this opportunity to reminisce of the day I technology to reconfigure processes, procedures took over the reins of your Company – I was seized and boost efficiencies. We are in the process of with the prospect of not only spearheading the articulating a business strategy to turnaround our wide spectrum of business activities of MECON Company and have set ourselves aggressive and from EPC/ Turnkey jobs to Project Consultancy in ambitious targets which I strongly believe are diversified sectors of Iron and Steel, Non-ferrous achievable through adoption of tactical business metals, Power, Oil & Gas and Infrastructure, but models. I speak for the entire Board when I say that also to be a part of a Company whose legacy of we are committed to ensure sustenance of growth technological and engineering excellence has momentum gained, through continuous evolution contributed significantly to self reliance in of our business strategy.
6 44th Annual Report 2016-17
MECON - Contribution to Nation in implementation of Domestically Building Manufactured Iron and Steel Products (DMI&SP) Policy, providing preference to The start of my journey with MECON has been ‘Make in India’ over imported Iron & Steel. very encouraging, as evidenced by the performance during the last fiscal year, both in quantitative Minimum Import Price (MIP) reports were and qualitative terms. With focused drive and prepared for various grades of stainless steel discipline, new initiatives are beginning to show products and Aluminium products. tangible results. Your Company was entrusted by MoS in During the just concluded fiscal year, the Company September 2016, for coordination of the secured a record order booking of `1419 Crores activities of CPSEs under MoS in the world’s (all time high in the history of the Company) of largest digital nation building initiative - which more than `1300 Crores was booked in Smart India Hackathon 2017 - a 36 hours the second half of the year alone. With the metals non-stop digital programming competition for sector under stress, Company’s intense focus on students of Technical Institutions, to provide augmenting its non-metal sector business has met sustainable innovative solutions to real time with considerable success and business worth challenges/ problems faced by the industries. ` 783 Crore has been secured from the diversified Diligent coordination by us, ensured the sectors of Infrastructure, Oil & Gas, Power, Defence successful culmination of the mega event, and Space, which is 55% of total order booking. organised from 1st to 2nd April 2017 at Indore, where 56 teams from engineering colleges Your Company has shouldered various across India participated. MoS lauded responsibilities entrusted by Ministry of Steel, MECON for organizing, coordinating and Govt. of India, wherein the Company has provided smooth implementation of the event. valuable technical inputs to contribute towards rapid National development on all fronts, which Your Company with its contribution directly have a long term value, not only for the region or impacting the nation, has passionately industry, but across several sectors and economy pursued its compelling vision to create at large. Few assignments of National importance a national Consultancy institution. In have been : continued efforts towards this, the Company is privileged to be associated with GAIL, as The National Steel Policy, wherein Engineering Consultant, in implementation your Company provided inputs for its of Urja Ganga, the highly ambitious project preparation. This policy aims at steering of our Prime Minister. This gas pipeline the industry to achieve its full potential, project aims to provide piped cooking (PNG) enhance steel production with focus on high gas to residents of the eastern region of the end value added steel, while being globally country and CNG gas for the vehicles as well competitive. as industries. Vision Document of Ministry of Steel Today, your Company is a multi disciplinary force (MoS) : MECON provided various inputs to reckon with, both in national and international and clarifications for preparation of this arena, encompassing diversified areas of activities. document. Its growth has been steady, selective and firmly With GoI’s thrust on Increasing Steel rooted in technology, to serve the nation’s Demand, your Company is contributing multifarious requirements. A stepping stone
A house of engineering excellence ...aiming beyond 7 MECON Limited towards this has been the branding of MECON’s (a) Comparative Financial Figures of 1st Half of Coke Ovens and Blast Furnace: Hon’ble Minister of 2016-17 vs 2nd Half of 2016-17 Steel during his visit to MECON on 21st December (` Crores) 2016, launched your Company’s indigenously designed 7 mt. tall 1 MTPA Coke Oven Battery 2016-17 st nd ‘Ángara 7.1’ & 4250 m3 Blast Furnace ‘Loha 4250’. Particular For the 1 half For the 2 half year ended year ended The Company took design development of such 30.09.2016 31.03.2017 challenging technologies to contribute towards Turnover 93.93 249.00 the ‘Make in India’ campaign, reduce India’s Total Income 127.00 279.98 dependence on import in the field of Steel and build domestic expertise in areas of speciality in Total Expenditure 205.87 289.25 which indigenous skills were lacking or not up to international standards. PAT -78.65 -5.19 Order As a technologically driven company, we believe Booking 96.43 1322.25 that investment in technology is imperative to sustainable growth of the company and The company was able to reduce its losses after tax that employees must engage in enhancement from ` 78.65 Crores to ` 5.19 Crores by increasing and reinforcement of technological skills and its turnover by 165%. competencies. With the derived confidence of (b) Comparative Financial Figures of FY 2015-16 breaking into arenas of non-metal sectors your against FY 2016-17 are as follows: Company will continue way forward to greater (` Crores) heights by conquering the frontiers of engineering and technological excellence. Particular 2015-16 2016-17 Turnover 317.28 342.93 Financial Performance Total Income 399.87 406.98 The last few years, in retrospect, have been Payment to subcontractors 94.33 79.85 extremely challenging for your Company due to Payment to subconsultants 53.31 33.61 adverse changes in business environment. Strategic Employee Benefits Expenses 310.77 291.78 initiatives have been taken to review several internal/ Other Expenses and Provisions 107.81 76.70 operational issues including rationalization of manpower deployment, productivity augmentation Total Expenditure 574.58 495.12 plans, reduction in avoidable expenditure, increase Cash and Bank Balance 539.44 550.43 in working hours, rationalization of various Order Booking 683.40 1,418.68 operational processes, development of norms/ guidelines/time scales etc. Though the Company is Highlights of performance are : still going through a financial turmoil, I am glad to n Improvement in Order booking by 107% over inform that things have started looking up. last year.
To give a coherent picture of our efforts and n Reduction in Expenditure by 13.8% over last results achieved, a few figures and highlights are year. enumerated below : n Given the context of turbulent operating environment in the sector in which we
8 44th Annual Report 2016-17
operate, your company registered an 8% Few of the notable work orders secured for increase in turnover during the FY 2016-17 providing: as compared to the FY 2015-16. EPC services for setting-up of an External n In comparison to our loss of ` 162 Crores in Coal Handling Plant Package at North 2015-16, the loss of ` 84 Crores in 2016-17 Karanpura STPP (3 x 660 MW) for NTPC was a reduction of almost 50%. Limited, Noida. Dear Shareholders it gives me pleasure in informing Preparation of TEFR for setting up a Mini you that since inception your Company has paid/ Steel Plant for Al Jazeera Steel Products Co. provided cumulative Income tax to the exchequer SAOG, Oman. amounting to ` 352.23 Crores and paid cumulative PMC services for Bokaro-Angul-Dhamra dividend on equity and preference (including tax) Pipeline Section along with Spurlines of to the tune of ` 68.36 Crores. Jagdishpur-Haldia-Bokaro-Dhamra Pipeline (JHBDPL) Project for GAIL (India) Ltd., Noida. Physical Performance PMC services to execute Payload Fabrication It gives me immense pleasure in inform you that & Testing Facility (PFTF) Building at 39 Acres the fiscal year 2016-17 has been marked with a New SAC Campus at Bopal, Ahmedabad number of achievements. Notable among these ISRO, Ahmedabad. are: Environment & Social Few notable assignments completed successfully: Contribution Coke Oven Battery #9, Universal Rail Mill Your Company’s Social and Sustainability (URM) & Bar & Rod Mill (BRM) of Bhilai Steel initiatives are driven by the conviction Plant, Skin Pass Mill (SPM) & Electrolytic that organizations play a significant role in Cleaning Line (ECL) of CRM-III of Bokaro contributing to build a better society. Evolving Steel Plant, New Coal Handling Plant & RH from your Company’s abiding vision to pursue Degasser of SMS-II of Rourkela Steel Plant sustainable and inclusive growth, the CSR were successfully commissioned. strategies are primarily focused on education, The Study Report on Fixing of Minimum healthcare, women empowerment, community Import Price (MIP) of Aluminium & its development and upgrade of infrastructural products in the country, which was awarded facilities in the selected villages of Jharkhand. to MECON by Aluminium Association of This multi- dimensional effort has transformed India (AAI), Mumbai is completed and many a life and contributed towards a sustainable submitted to AAI. environment for future India. Significant progress has been made for City Gas Distribution Network at Bengaluru, for MECON’s Real Assets - Human which MECON has been providing EPMC Resource Services for GAIL Gas Ltd. Your Company is of the firm belief that the heart Successfully completed Design & Engineering and soul of Company’s potential and success are services for the revolving dome for 2.5m the human resource and as such growth of the diameter Telescope at Mount Abu, Rajasthan organization is linked to the development of its for ISRO, Bangaluru. employees and equipping them with the right
A house of engineering excellence ...aiming beyond 9 MECON Limited competencies. Continual learning is essential to Like the past years, this year also your Company build this, which is why we make learning, from scored an ‘Excellent’ rating in compliance to basic skills to industry-specific requirements, the Guidelines on Governance issued by the available to our employees. We understand that Government of India which in itself sets a record of today’s business challenges present a new wave bagging Excellent rating in each year right from the of organizational priorities and focus on trainings, beginning. Best industrial practices, transparent encompassing Technical, Managerial and Soft financial dealings, e- tendering processes and skills. smooth channel for information flow aids to good governance in the Company. Succession Planning is vital for organizational sustainability and we have commenced on Acknowledgement development of the same to ensure smooth Before I conclude, I would like to place on record leadership transition at different levels. Transparent my deepest appreciation for dedicated efforts of and regular communication facilitates synergy employees at all level all in support of my endeavor across levels, thereby building a strong and to bring the Company back on track of sustained focussed organization. Towards this intent, I have growth. I also extend my sincere gratitude to the had a number of interactions with MECONians members of the Board for the richness of their at all levels. Their earnestness and wholehearted counsel, supervision and commitment to the vision co-operation in embracing the changes brought and values of the Company. I gratefully acknowledge about by our efforts of streamlining the company’s the support extended to us by the Ministry of Steel, processes and procedures, further instills in me Govt. of India, various other Ministries and thank the confidence of realizing the strategic vision and them for the confidence and trust bestowed upon business plan being articulated for the Company. the Company. Finally , a special word of thanks to Steps towards Good Governance you, our valued shareholders for your continued Your Company understands the importance of good support and goodwill that is critical to the success corporate governance practices in its functioning. of our company. Thank you & Jai Hind.
10 44th Annual Report 2016-17
BOARD REPORT
Dear Members, Your Directors have the pleasure in presenting 44th Annual Report on the operations of the Company and the Statements of Accounts for the Financial Year ended on 31st March, 2017. 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. Your Company has contributed significantly in major initiatives of Ministry of Steel having impact at national level such as:- 1. National Steel Policy (NSP-2017) 2. Domestically Manufactured Iron & Steel Products (DMI&SP) Policy 3. Minimum Import Price (MIP) of various grades of steel and aluminium
1.0 PERFORMANCE HIGHLIGHTS It has been another year marked by subdued activities in company’s traditional and niche business areas resulting in unrelenting stress on top & bottom lines. The company has attempted to overcome the challenges by stepping up its efforts in new business opportunities coming out of governmental initiatives Power For All (PFA 24x7), NSP-2017. The company has significantly strengthened its position in its Oil & Gas business area. This coupled with stepped up efforts in other sectors has resulted in a RH Degasser of SMS-II (Package 026B) healthy order booking by your company, thanks to has been successfully commissioned on concerted marketing efforts, strategic planning and 18.05.2016. business resolve of the employees & management collective. Nevertheless, relentless efforts and focus would be imperative to translate this order booking into tangible business values. Major prestigious projects of national importance completed / under progress during the year include: Metals Sector Your company has successfully provided Detailed Engineering & Consultancy services including Designer’s Supervision during Your Company has been entrusted by SAIL/ Erection, Testing and Hot trials for 4.2 Mtpa Rourkela Steel Plant for repair, restoration, Crude Steel Expansion of SAIL/Rourkela Steel rectification of Uptakes, Downcomer, Dust Plant and following are the major achievements: Catcher, Scrubber, Cast House and Top New Coal Handling Plant (Package Structures of Blast Furnace No. # 4. The furnace 091) commissioned on 12.07.2016 and was commissioned in the month of October, Performance Guarantee held on 21.09.2016. 2016.
A house of engineering excellence ...aiming beyond 11 MECON Limited
Detailed Engineering & Consultancy services Detailed Engineering & Consultancy services for for 2.2 Mtpa Expansion Plan of SAIL/Durgapur 7.0 Mtpa Expansion Plan of SAIL/Bhilai Steel Steel Plant have been provided by your company Plant have been provided by your company and and following are the major achievements: following are the major achievements: "Balance work for Debottlenecking of Installation of 4,060 m3 (Useful Volume) RMHP" has been successfully commissioned Blast Furnace No. # 8 is under completion on 30.05.2016. phase. Heating up of Hot Blast Stove started in March, 2017.
Your company has been entrusted by SAIL/ Universal Rail Mill (URM) has been Durgapur Steel Plant for carrying out successfully commissioned & has started Extended Category-II Capital Repair of Blast commercial production. Furnace#4. Blast Furnace shutdown was taken on 03.03.2017. Job is under full swing and BF Bar & Rod Mill (BRM) initial trial run & blowing-in has being done successfully. commissioning has been successfully carried out in March, 2017. Detailed Engineering & Consultancy services for installation of 1.2 Mtpa CRM-III Complex Commissioning of Coke Oven Battery No. 9 of SAIL/Bokaro Steel Plant have been provided of BSP, Bhilai has been successfully done on by your company and following are the major 30.03.2017. achievements:
12 44th Annual Report 2016-17
Skin Pass Mill (SPM) in CRM-III complex has m2 sintering area, rated capacity 600 tph, in been successfully commissioned in October, the month of June, 2016. 2016. Blast Furnace No. # 5 (4,160 m3 Useful Volume), in the month of December, 2016. Coal Pulverization & Injection System for 4,160 m3 Blast Furnace, in the month of December, 2016. Hot Metal Handling System for 4,160 m3 Blast Furnace, in the month of October, 2016.
Electrolytic Cleaning Line (ECL) in CRM-III complex has been commissioned in March, 2017.
Detailed Engineering & Consultancy services including Project Management Consultancy services are being provided by your company for setting up of 3.0 Mtpa Integrated Steel Plant of NMDC Limited at Nagarnar. The project is under execution and packages like Coke Oven Battery No. 1, Sinter Plant, Blast Furnace and Oxygen Plant are in advanced stage of execution.
Server based telephone exchange (ECL) in CRM-III complex has been commissioned in February, 2017. Detailed Engineering & Consultancy including Project Management Consultancy services for 2.5 Mtpa Expansion Plan of SAIL/IISCO Steel Plant, Burnpur have been provided by your company and the following have achieved Performance Consultancy services for installation of BOF#3 Guarantee parameters as per contract: and CCM#4 along with associated equipment Sinter Plant (Down-draught off-strand cum auxiliary & services in SMS-2 shop of RINL/ cooling type) with 2 Machines, having 204 Visakhaptnam Steel Plant, Visakhapatnam.
A house of engineering excellence ...aiming beyond 13 MECON Limited
BOF#3 has been successfully commissioned on upgradation of their Mini Blast Furnace along 07.11.2016. with supply of SGI Stave Coolers. All the jobs have been completed on schedule and the Blast Furnace was commissioned in September, 2016.
SLR Metaliks Limited had entrusted the job for rendering Engineering & Consultancy Tata Metaliks Limited (TML), Kharagpur has services for Steel Melt Shop (including Billet entrusted your company for providing Design, caster) along with associated Utilities & Engineering & Consultancy services for capacity Services. 0.3 Mtpa Steel Melt Shop consisting enhancement of their Mini Blast Furnace of 1x35T EoF, 1x35T LRF, 1x35T VD and Two along with design improvement of Hot Blast Strand Billet Caster has been commissioned Stoves and installation of MECON’s in-house on 28.07.2016. designed Cyclone. All the jobs were completed on schedule and the Blast Furnace has been successfully commissioned in March, 2017.
Jindal Steel & Power Limited (JSPL), Raigarh has entrusted your company to design Hydraulic Rocking Runner and Transfer Car System for movement of Ladles for their BF # 1 (686 m3 In order to meet the challenges of tomorrow posed Useful Volume). The design, first of its kind in by uncertain raw material qualities & sourcing, India is already developed and submitted to your company has fully developed the in-house JSPL. design of a 1.2 Mtpa Pellet Plant. The In-House Srikalahasthi Pipes Limited (SPL), Chittoor Design Development Document of 1.2 Mtpa Pellet has entrusted your company for providing Plant was launched by the Hon'ble Minister of Steel Design, Engineering & Consultancy services for at our Ranchi office in September, 2016.
14 44th Annual Report 2016-17
Draft report was prepared and submitted in Canadian R & D institution through processing February, 2017 for Benchmarking Study of of Sukinda COB. The DPR is under preparation. NMDC Limited, Hyderabad. Your company carried out the Owner’s Draft report was prepared and submitted in engineering services for preparation of January, 2017 for Benchmarking Study of MSTC budgetary cost estimation report for Zinc Ferrite Limited. Treatment Plant at Chanderiya, Rajasthan for Draft report was prepared and submitted in Hindustan Zinc Ltd. December, 2016 for Benchmarking Study of Adani Limited had entrusted your company for MOIL Limited, Nagpur. the preparation of Concept Study Report for proposed 4 Ltpa copper smelter complex based Non Ferrous Sector on imported copper concentrate at Mundra, The Public Sector aluminium company, viz. Gujarat, Adani Ltd. The job has been completed National Aluminium Company Ltd. (NALCO) during FY 16-17. Further the preparation of had awarded consultancy job to your company Bankable Feasibility Study assignment has been for carrying out Pre-Feasibility Report (PFR) awarded to MECON during March, 2017. to set up a 4.0 Lac Tonnes /annum Greenfield Aluminium Smelter project in the State of Power Sector Madhya Pradesh. The Final Report had been Detailed Engineering and Consultancy services submitted to Client on 31st March 2017. including Project Management services have Earlier, NALCO had also awarded your been provided to NLC Tamil Nadu Power Company for the preparation of TEFR for 0.5 Limited (NTPL) for installation of 2x500 MW Mtpa Alumina Refinery in Kutch Gujarat, which coal based Thermal Power Plant at Tuticorin. has been successfully completed and submitted PG Test has been successfully completed for on 21.02.2017. Unit 2. The Aluminium Association of India (AAI), Preparation of Road Map for providing 24x7 Mumbai had awarded your company with Power for All (PFA) in various States and UTs the preparation of Study Report on Fixing of (total 9 nos.) of India was entrusted by Power Minimum Import Price (MIP) of Aluminium Finance Corporation (PFC). Final reports for & its products in the country. The complete all the states/UTs have already been signed by assessment report for fixing up the MIP values respective state and Ministry of Power (MoP) for primary aluminium as well as downstream and uploaded on the MoP site. products had been submitted to Client during Detailed Engineering Consultancy services end of December, 2016. including designer supervision have been During the current year, Tata Steel Limited has provided to SAIL/Rourkela Steel Plant for Power entrusted your company to render Consultancy and Blowing Station, Turbo Blower Station and services for preparation of Detailed Project TRT has been successfully completed. Report (DPR) for extraction of Nickel through Detailed Engineering Consultancy services a 1000 TPA Nickel Extraction – Demonstration including designer supervision have been Plant through hydrometallurgical processing of provided to SAIL/Durgapur Steel Plant Sukinda Mines’s Chromite Overurden (COB) for Durgapur Compressed Air Station and available at Bamnipal, Odisha. The DPR shall commissioning certificate has been issued to be based on a unique process developed by a the contractor.
A house of engineering excellence ...aiming beyond 15 MECON Limited
Final Techno Economic Feasibility Report Total consultancy services for replacement of has been submitted to Gallant Ispat limited, High Pressure Feed Water Pipeline of Power & Gorakhpur for 100 TPD rolling mill project. Blowing Station of Bhilai Steel Plant is under Final Detailed Project Report for Implementation final stage of completion. of Zero Discharge System for Tenughat Vidyut Consultancy Services for Installation of 300t/h Nigam Limited has been submitted. Boiler & 36MW BPTH for Bokaro Power Supply Company Limited (BPSCL) is under final stage Final Detailed Project Report for Mandira Small of completion. Hydro Electric Project has been submitted to Green Energy Development Corporation of Oil & Gas Sector Odisha Limited. Engineering & Project Management Consultancy Detail Engineering and consultancy services services for City Gas Distribution Network at have been provided to Visakhapatnam Steel Bengaluru for GAIL Gas Ltd. Plant (RINL) for Power Plant in CO Battery No. 4 area Phase-II and has been successfully Achieved - Laying 1358 Inch-Km completed. Achieved PNG Domestic Connections of Engineering & Consultancy services have been 1973 nos. provided to National Aluminum Company for 3 nos. CNG Stations and 2 nos. de- additional coal handling system (Pkg A-02) at compression units have been commissioned. NALCO and has been successfully completed. EPMC Services for Up-gradation of SCADA, Final Technical Due diligence study report APPS & Telecom Systems for Visakha- of Stage-I & Stage-II each of 2x270 MW units Vijayawada-Secundarabad Pipeline (VVSPL) of Corporate Power Limited (CPL), Latehar, (cross country pipeline) of Hindustan Jharkhand was to be carried out for Govt. of Petroleum Corporation Limited (HPCL). Jharkhand. The Due diligence report has been Project is completed successfully and systems submitted to GoJ. are operating smoothly from the day of RLA Study, Uprating Study on Turbine, commissioning. HPCL has issued a completion Generator, and other auxiliary on one unit of certificate and they are satisfied with company’s Moyar Power House was entrusted by Tamil performance and rated as “EXCELLENT”. Nadu Generation and Distribution Corporation Limited (TANGEDCO) and is under final stage of completion. Consultancy services for third party delay analysis of BTG and BOP works of Khaperkheda project (1x500 MW) was entrusted by Maharashtra State Power Generation Co. Limited and is under final stage of completion. Consultancy Services for balance work & supply, change in specification and mandatory spares status for Koradi project (3x660 MW) was entrusted by Maharashtra State Power Generation Co. Limited and is under final stage of completion.
16 44th Annual Report 2016-17
EPMC services for Bokaro-Angul-Dhamra Delhi Cantt, CAFVD Kirkee Pune & COD Pipeline Section alongwith Spurlines of Chheoki Allahabad on 30.05.2016. Jagdishpur-Haldia- Bokaro-Dhamra Pipeline for Preparation and submission of Detailed Project GAIL (India) Ltd., Noida has been started and Report along with Detailed Engineering for the project is progressing well within the very Modernisation of Naval Aircraft Yards at Goa & tight schedule. This is prestigious project under Kochi was completed on 23.03.2017. “Urja Ganga Pariyojna”. Construction of buildings as “Deposit Works” It includes Laying and installation of 36”/ on “Total Turnkey basis” for Corporation Bank, 30” / 12” /6” /4” X 1063 km approx. pipeline Mangalore is under progress. from Bokaro–Angul–Dhamra Pipeline Section Bharat Electronics Limited has awarded a job alongwith Spurlines & 7 CGDs enroute to your company for Project Management Jagdishpur–Haldia & Bokaro–Dhamra Pipeline Consultancy services for construction of viz Varanasi, Patna, Ranchi, Bhubaneswar, underground and overground specialized Cuttack, Kolkata and Jamshedpur. integrated EMP protected hardened structures Mainline: 30” x 345 km, (Phulpur – Dobhi) at 5(five) locations in India. This project is -759 km Line under execution. Civil works are in full swing. Spurline : 24” / 18” / 12” / 8” x 414 Km Detailed Engineering & Designers’ supervision (Gorakhpur, Varanasi, Patna, Barauni) for Mini Indoor Stadium DID Lines School and EPMC services for construction of one of Rain Water Harvesting System along Maud the highest altitude POL Depot at Leh, J&K Road for Delhi Cantt. Board. The project was for Hindustan Petroleum Corporation Ltd., completed on 16.02.2017 Mumbai has been started
Infrastructure Sector Employees’ State Insurance Corporation, New Delhi has appointed your company as Project Management Agency to execute the construction of 4 (Four) hospitals including Architect & Engineering Consultancy works. These projects are under execution. Successfully completed the Design & Engineering services for the revolving dome for 2.5 m diameter Telescope at Mount Abu, Rajasthan for Indian The Institute of Microbial Technology, Space Research Organisation, Bangalore. Chandigarh a unit of CSIR awarded the job of “Expansion and Modernisation of Microbial Preparation and submission of Techno type Culture Centre and Gene Bank (MTCC)” Economic Feasibility Report (TEFR) for setting- under deposit works as project Management up of 10 MGD (45 MLD) Desalination Plant at Consultant. The job involved conceptualisation, Visakhapatnam Steel Plant, Visakhapatnam. Basic & Detailed Engineering alongwith Preparation and submission of Detailed Project procurement services and project execution Report alongwith Detailed Engineering for on “Total Turnkey Basis”. It was successfully Modernisation of four numbers of Central completed and handed over to Client and is Ordnance Depots at COD Delhi Cantt, CASD under successful operation since then.
A house of engineering excellence ...aiming beyond 17 MECON Limited
Project Management and Consultancy services for establishment of 100 Bedded Homeopathy Hospital at Narela, Delhi for Ministry of Ayush has been started. Your Company is serving a large number of clients Your Company has successfully completed in the Public and Private Sectors. Some of the major Engineering Consultancy services in replacing clients in Public Sector include SAIL, GAIL, NMDC, the "British designed lock gate system” to “oil NINL, RINL/VSP, KIOCL, HCL, NML, RINMOIL, hydraulic winch drive operated lock gate SAILMOIL, MIDHANI, Corporation Bank, BEL, system” for Kolkata Port Trust in December, GoJ, RPTPL, PFC, HPCL, BPCL, OPTCL, UPPCL, 2016. UPRVUNL, TANGEDCO, OMDC, OMCL, MRPL, TVNL, FCRI, IPICOL, NALCO, BPSCL, NLC, NSPCL, NPCIL, WBSEB, WBPDCL, WBSEDCL, BESCOM, OHPC, PFC, CMWSSB, UCIL, HPCL, BGL, OMCL, 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, STEMCOR, ESSEL, KIC METALIKS, AXIS BANK, UML, ULTRATECH, MONNET, BMM, UGSL, MEL, BRPL, SESA GOA, Your company has also completed the ADHUNIK, HINDALCO, TML, BIL, MNGL, IL&FS, feasibility study for development of additional TOPWORTH, ADANI, MSPL, IIL, SLR, etc. are some facilities in existing Mechanised Coal Handling of the major clients in the private sector. Plant (MCHP) of Paradip Port Trust (PPT) In addition to above, some of the major clients to satisfactorily. Based on MECON’s performance whom your company has been rendering services in the Feasibility Study, PPT has further during this year include NTPC, ESIC, NSPCL, awarded the job of implementing effective dust JBVNL, MAHAGENCO, Ministry of AYUSH, ISRO, control system in the MCHP area on nomination HAL, MRPL, HEC, BARC, HINCOL, APMDCL, basis. ISRO, JBVNL, JSW, Tata Steel, EIPL, UGSL,
18 44th Annual Report 2016-17
Electrosteel, TATA METALIKS, etc. The Company is also providing services for Defence Sector. Business procurement in the area of Engineering Consultancy & PMC services was `335.88 Crore in previous year and ` 343.29 Crore during this financial year. In Supply / Turnkey projects it was `347.53 Crore in previous year and `1075.36 Crore during this year
2.0 BUSINESS DIVERSIFICATION MECON already has three business verticals namely, Metals, Energy [Oil & Gas and Power] and Infrastructure. Metals & Mining being the traditional core-competence area of MECON, other business verticals were carved out of a necessity to compensate for market downturn due to an inherent cyclic behaviour of metals sector and to insulate the company from the perils of business cycles. MECON has successfully established its presence in above diversified sectors (Infrastructure & Energy) by widening its reach to areas such as, CNG & City Gas Distribution networks, Long Distance Gas Pipelines in Energy sector and from Steel plant infrastructure to iconic infrastructure projects, which are steadily bringing consolidation for the company.
A house of engineering excellence ...aiming beyond 19 MECON Limited
During this fiscal year, business procurement from 3.0 MANAGEMENT INITIATIVES the diversified sectors (other than Metals) has Your company being an organisation with strong been significant. In Engineering and Consultancy, fundamentals, focused marketing approach and the Company’s order booking is 71.83% (previous ready to meet up to challenges, have been able to year 76.54%) in Non-Metal sectors and 28.17% moderate its business strategy to focus on areas like (previous year 23.46%) in Metal sector. In case of engineering in allied fields, Infrastructure, Power supply / turnkey projects, it is 49.88% (previous and Oil & Gas sectors and to improve its presence year 79.23%) in the diversified sectors and 50.12% in non-metal sectors as well in terms of business (previous year 20.77%) in Metals Sector. procurement and has also ventured into newer areas of business with strategic partners to meet challenges Business Procured (Consultancy) emerging from changed business scenario. Metal Non-Metal With the derived confidence of breaking into areas 500 hitherto unchartered, your company will continue 400 to carry forward the momentum to transcend into 300 niche products/service areas as a way forward.
Crores 200 ` To continue as a profitable organization with a in 100 greater market share and to maintain the growth 0 momentum, your company has taken initiatives 2012-13 2013-14 2014-15 2015-16 2016-17 such as portfolio analysis to identify profitable Year business areas, retraining & redeployment of
manpower based on project profitability, increasing Business Procured (Supply) office working hours to improve productivity, engagement of domain experts to complement in- Metal Non-Metal house expertise and corporate brand building. 600 In order to strengthen marketing functions of the 500 organization and explore new business opportunities, 400 reorganization of marketing team is in place with the 300 Crores
` 200 induction of young executives in this group. in 100 Your company is eyeing at International market for 0 business potential and is participating in overseas 2012-13 2013-14 2014-15 2015-16 2016-17 projects particularly in Africa, Middle East, Year South East Asia and Indian sub-continent region.
Recently, your company has completed one project for a Client based in Nigeria & is executing another project in Oman and we are expecting a few more projects in Iron and Steel sector.
4.0 MOU WITH MINISTRY OF STEEL ON PERFORMANCE Like in the previous years, your Company has signed a MoU with Ministry of Steel for the Financial Year 2016-17. The Company achieved “Good” rating in the year 2015-16 and is likely to achieve “Good” rating in 2016-17.
20 44th Annual Report 2016-17
5.0 ISO 9001:2008 CERTIFICATION Engineering, Procurement and Construction (EPC) services for extended Category-II Repair Your Company is the first consultancy organization of Blast Furnace # 4 for SAIL/Durgapur Steel in the country to be certified for ISO 9001 Quality Plant, Durgapur. Management System in the year 1994. The certificate has been awarded by M/s TUV NORD Preparation of Techno-commercial Viability CERT Gmbh. The scope of Company’s certification Report for Parbatpur and Sitanala Coal Blocks includes Consultancy, Design & Engineering, for SAIL, Collieries Division, Kulti. Procurement of Plant & Equipment, Inspection, Project Monitoring & Control Activities for Construction & Project Management Services and execution of Modernisation Project of Heavy Erection of Turnkey Projects. The re-certification Engineering Corpn. Ltd. (HEC), Ranchi. audit by TUV has been completed in November, Third Party Inspection services for installation 2014 and Company’s QMS has been recertified for of 3.0 Mtpa New Hot Strip Mill at SAIL/Rourkela ISO 9001: 2008 for further period of three years Steel Plant, Rourkela. with validity till 29.01.2018. Detailed Engineering & Consultancy services The surveillance audit of Vigilance function for Tinning Line Complex at Tarapur for JSW was conducted by TUV in December, 2016. With Steel Coated Products Ltd., Mumbai. no Non-Conformity observed by TUV the ISO 9001:2008 certificate for Vigilance function of the Preparation of Detailed Project Report (DPR) for Company is revalidated upto September, 2018. 1000 Tpa Nickel Extraction Plant at Sukinda Mines for Tata Steel Ltd., Jamshedpur. 6.0 INDIAN ASSIGNMENTS Preparation of report for assistance to Joint Your company has procured following major work Working Group (JWG) & carrying out Technical orders during 2016-17: Audit, Due Diligence & Valuation of 2 x 850 Tpd Air Separation Plant (BOO to BOT) for RINL/ Metals Sector Visakhapatnam Steel Plant, Visakhapatnam. Engineering, Procurement and Construction Preparation of Pre-Feasibility Study Report for (EPC) services for Battery Proper (Pkg-1) for proposed Special Purpose Vehicle (SPV) for Rail Rebuilding of Coke Oven Battery No. 8 at SAIL/ Project in India for NMDC Limited, Hyderabad. Bokaro Steel Plant, Bokaro. Detailed Engineering & Consultancy services Project Management & Consultancy services for Pickling, Coil Annealing and Bar Annealing for Rebuilding of Coke Oven Battery No.1 and alongwith associated facilities in existing Bar Revamping of CDCP # 1 and part of Coal Chemical and Rod Mill Complex of JSW Steel Ltd., Salem. Plant and Dust Extraction System at RINL/ Detailed Engineering & Consultancy services Visakhapatnam Steel Plant, Viakhapatnam. for installation of New 110T Crane by replacing Project Management & Consultancy services 65T existing Crane in BF # 1 Cast House & other (additional services) for Expansion Project of Modification in BF # 2 area for JSW Steel Ltd., SAIL/IISCO Steel Plant, Burnpur for 2.5 MT Salem. Stream. Consultancy services for Civil and Structural Additional Consultancy & Engineering services Work for Simultaneous Blowing of BOF for Balance Works of Water Supply Packages Converter at SMS-II (Pkg. 018) under the RSP 078, 077-01 & 077-02 of SAIL/Bhilai Steel Plant, Expansion Project for SAIL/Rourkela Steel Bhilai. Plant, Rourkela.
A house of engineering excellence ...aiming beyond 21 MECON Limited
Preparation of Detailed Project Report (DPR) for Project Management & Consultancy (PMC) Development of Coal Blocks of Andhra Pradesh services for Construction of 51 nos. of 33/11 kv Mineral Development Corpn. Ltd., Hyderabad. Sub-stations with associated Lines for Pkg-2, Preparation of Study Report for Benchmarking within the jurisdiction of DISCOM-SOUTHCO, Study of NMDC Limited, Hyderabad. under Phase-III, ODSSP for Odisha Power Transmission Corporation Ltd., Bhubaneswar. Preparation of Techno-Economic Feasibility Report (TEFR) for proposed Steel Plant at Joda, Change Order for Engineering, Procurement and Odisha for Tata Sponge Iron Ltd., Joda, Odisha. Construction (EPC) services for Conversion of 132 KV Overhead Line to 132 KV Underground Preparation of Techno Economic Viability (TEV) Cable - Power Supply System for Sinter Plant- Report for Essar Steel India Ltd. comprising II (Package No. 4) of SAIL/Bokaro Steel Plant, Beneficiation Plant, Slurry Pipeline, Pellet Bokaro. Plant and Steel Plant for State Bank of India, Mumbai. Project Management & Consultancy (PMC) services for Construction of 34 nos. of 33/11 KV Detailed Engineering & Consultancy services Substations, Pkg-1 (27 nos. of Substations) & for installation of Rocking Runner at Blast Pkg-5 (7 nos. of Substations) within DISCOM- Furnace-1 for Jindal Steel & Power Ltd., Raigarh. CESU & SOUTHCO under Phase-III, ODSSP for Preparation of Techno Economic Viability (TEV) Odisha Power Transmission Corporation Ltd., Report for Integrated Steel Plant of Electrosteel Bhubaneswar Steels Ltd., Bokaro. Engineering & Project Management Consultancy Energy Sector (EPMC) services for setting-up of CNG & CGD installation in North Goa for GAIL Gas Ltd., Engineering, Procurement and Construction Noida. (EPC) services for setting-up of an External Coal Project Management & Consultancy (PMC) Handling Plant Package at North Karanpura services for implementation of works under STPP (3 x 660 MW) for NTPC Limited, Noida. Integrated Power Development Scheme (IPDS) Project Management & Consultancy (PMC) for all 40 selected Statutory Towns of Jharkhand services for Bokaro-Angul-Dhamra Pipeline for Jharkhand Bijli Vitran Nigam Ltd., Ranchi. Section along with Spurlines of Jagdishpur- Engineering & Project Management Consultancy Haldia-Bokaro-Dhamra Pipeline (JHBDPL) (EPMC) services for City Gas Distribution Project for GAIL (India) Ltd., Noida. Network in Haridwar GA for a period of 3 years Project Management & Consultancy (PMC) for Haridwar Natural Gas Pvt. Ltd. (A JV of services for Kochi-Koottanad-Bangalore- BPCL & GAIL Gas Ltd.). Mangalore (KKBMPL) Natural Gas Pipeline Engineering, Procurement & Construction Project (Phase-II) for GAIL (India) Ltd., Noida. Management (EPCM) services for Pet Coke Engineering & Project Management Consultancy Silos for Trucks & Wagon Loading alongwith (EPMC) services for City Gas Distribution associated Conveying System, Covered Shed for Network at Bengaluru for GAIL Gas Ltd., Noida. Sulphur Yard and DCU Coke Pit for Mangalore Detailed Engineering & Consultancy services Refinery & Petrochemicals Ltd., Mangalore. for Coal based Thermal Power Plant (1 x 250 Engineering, Procurement & Construction MW) at Rourkela (Phase-II) for NTPC-SAIL Management (EPCM) services for Construction Power Co. Pvt. Ltd., New Delhi. of MS, HSD, ATF Day Tanks Loading Facilities,
22 44th Annual Report 2016-17
Truck Parking Terminal (Marketing Terminal) inside the Power Plant of Bokaro Power Supply and Flare Gas Recovery System (FGRS) Project Co. (P) Ltd., Bokaro. for Mangalore Refinery & Petrochemicals Ltd., Consultancy services for Balance Work & Mangalore. Supply, Change in Specification and Mandatory Detailed Engineering & Consultancy services for Spares Status for Koradi Project (3 x 660 MW) of Modernisation of IOCL's Lube Blending Plant at Maharashtra State Power Generation Co. Ltd. Paharpur, Kolkata for Indian Oil Corporation (MAHAGENCO), Mumbai. Ltd., Kolkata. Composite Consultancy Services for Delay Engineering & Project Management Consultancy Analysis, Balance work Assessment, (EPMC) services for Construction of POL Material Specification Change Assessment & Depot at Leh, Jammu & Kashmir for Hindustan Reconciliation of Mandatory Spares at Parli Petroleum Corporation Ltd., Mumbai. Project (1 x 250 MW) of Maharashtra State Engineering, Procurement & Construction Power Generation Co. Ltd. (MAHAGENCO), Management (EPCM) services for Construction Mumbai. of Additional Tankages - Naphtha (2 tanks), Preparation of Detailed Project Report (DPR) VG-40 (2 Tanks), Inlet Receiving Tanks & Basic Engineering services for Waste Heat WWTP3 (2 Tanks) for Mangalore Refinery & Recovery based Power Plant at SP#3 & SP#4 of Petrochemicals Ltd., Mangalore. Tata Steel Limited, Jamshedpur. Engineering Consultancy services for Emission Preparation of Market Survey & Detailed Control Systems for Tank Truck Gantries at Feasibility Report (DFR) for Three Cities i.e. Jaipur, Palanpur, Loni, Vashi, Wadala, Kolkata, Varanasi, Cuttack and Bhubaneswar for GAIL Irumpanam and Chennai Terminals of Hindustan Gas Limited. Petroleum Corporation Ltd., Mumbai. Preparation of Market Survey & Detailed Composite Consultancy Services for Delay Feasibility Report (DFR) for three Cities i.e. Patna, Analysis, Balance Work Assessment, Ranchi and Jamshedpur for GAIL Gas Limited. Material Specification Change Assessment Consultancy services for Surge Analysis at 19 and Reconciliation of Mandatory Spares Locations for Hindustan Petroleum Corporation at Chandrapur Project (2 x 500 MW) of Ltd., Mumbai. Maharashtra State Power Generation Co. Ltd. Preparation of Detailed Feasibility Report (DFR) (MAHAGENCO), Mumbai. for Modernization of Lube Plants for Indian Oil Engineering & Project Management Consultancy Corporation Ltd., Mumbai. (EPMC) services for Augmentation of Facilities Detailed Engineering services on MB Lal for Three Terminals of IOCL at Mourigram, Committee Recommendations for East India Rajbandh & Siliguri under West Bengal State Petroleum Pvt. Ltd., Visakhapatnam. Office for Indian Oil Corporation Ltd., Kolkata. Extension of Contract for rendering Consultancy Engineering & Project Management Consultancy services for installation of 300 TPH Boiler & 36 (EPMC) services for setting-up of New Bitumen MW BPTG Project for Bokaro Power Supply Emulsion Plant at Visakhapatnam for Co. (P) Ltd., Bokaro. Hindustan Colas Pvt. Ltd. (HINCOL), Mumbai (A JV of HPCL with Colas SA, France). Preparation of Detailed Feasibility Report (DFR) for Vizag Refinery Evacuation Project for Engineering & Consultancy services for Hindustan Petroleum Corporation Ltd., Mumbai. Replacement of 100 ata & 39 ata Stem Pipeline
A house of engineering excellence ...aiming beyond 23 MECON Limited
Infrastructure Sector / Other Engineering Preparation of Detailed Project Report (DPR) for Modernization of Naval Aircraft Yard for Kochi Additional work for execution on LSTK Basis & Goa for Ministry of Defence, Govt. of India. for Construction of Buildings as "Deposit Works" on "Total Turnkey Basis" for Corporation Bank, Preparation of Environmental Impact Mangalore. Assessment (EIA), Environmental Clearance & Environmental Management Plan (EMP) Construction of 100 Bedded ESIC Hospital, Staff for Advanced Heavy Water Reactor Project Quarters and SRO Building at Surat, Gujarat as & Residential Colony at Tarapur for Bhabha "Deposit Works" on "Total Turnkey Basis" for Atomic Research Centre (BARC), Mumbai. Employees' State Insurance Corporation, New Delhi. Preparation of Feasibility Report (FR) for 6000 Tpd Uranium Mining Project comprising of Construction of 100 Bedded ESIC Hospital at Rohil Mines, Ore Processing Plant and Tailing Vizianagaram, Andhra Pradesh as "Deposit Pond at Khandela Tehsil, Sikar Distt., Rajasthan Works" on "Total Turnkey Basis" for Employees' for Uranium Corporation of India Ltd., State Insurance Corporation, New Delhi. Jaduguda. Construction of 100 Bedded ESIC Hospital at Preparation of Detailed Project Report (DPR) for Phulwari Sharif, Bihar as "Deposit Works" on installation of Statue of Swami Vivekananda at "Total Turnkey Basis" for Employees' State Ranchi Lake for Department of Tourism, Art & Insurance Corporation, New Delhi. Culture, Sports & Youth, Govt. of Jharkhand. Construction of ESI Dispensary with 6 Beds Detailed Engineering & Project Management Facilities and SRO at Bhelupur, Varanasi, Consultancy services for Dust Control System Uttar Pradesh as "Deposit Works" on "Total at Mechanised Coal Handling Plant of Paradip Turnkey Basis" for Employees' State Insurance Port Trust, Odisha. Corporation, New Delhi. Project Management & Consultancy (PMC) 7.0 FOREIGN ASSIGNMENTS services for establishment of All India Institute of Homeopathy at Narela, Delhi for Govt. of Overseas assignment bagged by your company is India, Ministry of AYUSH, New Delhi. highlighted below: Project Management & Consultancy (PMC) Preparation of Techno Economic Feasibility services to execute Payload Fabrication & Testing Report (TEFR) for setting up a Mini Steel Plant Facility (PFTF) Buillding at 39 Acres New SAC through MBF-BOF-CC Route for Al Jazeera Campus at Bopal, Ahmedabad for Indian Space Steel Products Co. SAOG, Oman. Research Organisation (ISRO), Ahmedabad. 8.0 FINANCIAL RESULTS Preparation of Master Plan and Detailed Project Report (DPR) for establishing the Integrated The extract of Annual Return for the period Infrastructure Facilities for New HAL Helicopter under review, as required under Section 92(3) of Factory at Bidrehalla Kaval, Gubbi Taluk, the Companies Act, 2013 and Rule 12(1) of the Tumakuru Dist. for Hindustan Aeronautics Companies (Management and Administration) Ltd., Bangalore. Rules, 2014 is annexed as Appendix- I. Consultancy services for Recycling of Domestic The financial highlight for the period under review Sewage of RSP Township for SAIL/Rourkela is as under: Steel Plant, Rourkela.
24 44th Annual Report 2016-17
(` in Lakhs) including Bonus Shares worth `40.31 lakh, has Particulars 2016-17 2015-16 paid cumulative dividend including tax (Equity 8.1 Material changes and & Preference) of `6,836.59 lakh till 2015-16 and commitment, if any, has not made any provision towards Dividend on affecting the financial position which has Equity Shares in 2016-17. The cumulative income occurred between the Nil Nil tax to the exchequer amounting to `35,222.96 lakh end of financial year has been paid / provided till 2016-17. to which the financial statements relate and the date of the report. 10.0 EARNING PER EMPLOYEE 8.2 The amount, if any which is proposes to carry to Operating Turnover per employee per year is as any reserve. follows: Opening Balance 21,726.12 37,992.14 (Add.) During the year (8,384.35) (16,241.38) OPERATING TURNOVER PER EMPLOYEE 2218.26 24.64 30 (Less) Utilized during the ______year 25 20 Closing Balance 11,123.51 21,726.12 15 10 15.79 18.75
in ` Lakh 15.99 8.3 Particulars of loans, 5 11.35 0 guarantees or investments 519.52 # 519.52 # under Section 186 of the 2013-14 2014-15 2015-16 2016-17 Companies Act,2013 Year 8.4 Particulars or contracts or arrangements with related party referred under section 188(1) in Nil Nil 11.0 FUTURE BUSINESS VISION Form AOC-2. (Enclosed as Annexure- A) The changing business scenario in the country, the subdued growth outlook for domestic and # Represents the investment (Gross) made by the Company. global steel market has posed strong challenges before the company. On the other hand this has Turnover provided impetus to reorganize the business
400 portfolio and initiate measures to work for other promising options coming its way through 300 multiprong governmental approach for stepping 200 up economic revival process and tone up the 389.92 341.29 342.93 in ` Crore 100 317.28 business investment scenario. Your company is
0 fully geared up to capitalize on strengths gained 2013-14 2014-15 2015-16 2016-17 through past operations while shifting focus Year towards new opportunities through redefining existing business practices, reorganizing human resources and recalibrating the approach to gain 9.0 DIVIDEND foothold in new areas entailing emphasis on This year your Directors have not recommended technologically oriented EPC projects, Mining any dividend. & Mineral, Infrastructure and Energy sectors, which are experiencing resurgence in alignment 9.1 Cumulative Dividend & Tax Paid with the governmental initiatives. Your company Your company which had paid up capital of has consolidated its presence in Oil & Gas sector `4,013.84 lakh (previous year `4,013.84 lakh) while making strong inroads into Infrastructure
A house of engineering excellence ...aiming beyond 25 MECON Limited
sector. Your company also plans to venture into newer areas of business with strategic partners to meet challenges emerging from changed business scenario and envisions to emerge as a formidable force to reckon within its existing as well as new focused areas. By adopting smart business practices, through assimilation of modern technology and by utilizing intellectual capital, your Company is prepared to cope with the vagaries of steel cycle.
without making any compromise on the safety 12.0 RESEARCH & DEVELOPMENT aspect. R&D plays an important role in the innovation Design Development of 4,250 m3 Blast Furnace process. R&D results in valuable inventions, ideas (Loha) and designs which can be a source of potential value when it comes to gaining competitive advantage. Development of indigenous technology for large Your Company’s R&D activities are carefully Blast Furnaces that can take care of the problems planned so that all inventions are patented to faced by Indian operators and produce hot protect these valuable assets. metal in a more environment friendly, efficient & economic way led to design and development The Company’s R&D mostly undertakes Applied of 4250 m3 BF by your Company. It is proudly Research and Experimental Development in informed that this prestigious development work the core area of business such as Iron and Steel has been successfully completed and ‘LOHA as well as focused areas of national importance 4250’ was launched by the Hon’ble Minister such as Defense, Environment etc. Your Company of Steel, GoI, Shri Choudhary Birender Singh is engaged in R&D works sponsored by its own in Company’s Head Office on 21st December, resources as well as other external funding 2016. In order to acquire intellectual protection agencies such as DRDO, DST, Ministry of over the development, a patent application has Environment, Ministry of Steel and private sectors already been filed. also. Collaborative efforts in R&D with academic Improved 7m Tall 1.0 MTPA Coke Oven Battery institutions like Jadavpur University, Kolkata and with 49.8 m3 hot oven volume (ANGARA 7.1) Industrial house like TATA Steel – Jamshedpur are undertaken by Company’s R&D to strengthen the A 7 m tall 1 MTPA top charged Recovery type research potential and application domain. Coke Oven Battery has been designed for higher productivity with lesser requirement Projects Completed of resources. This battery can feed Blast Furnace with capacity of 4000 m3 or more. Design optimization of NEST IN roof structure This prestigious development work – with cold formed Steel section ‘ANGARA 7.1’ was also launched by the This is a collaborative project with TATA Steel Hon’ble Minister of Steel, GoI, Shri Choudhary where design optimization has been carried out Birender Singh in Company’s Head Office for low cost housing model called NEST IN. The on 21st December, 2016. In order to acquire structural design team provided an economic intellectual protection over the development, design which costs 26% less than the original, a patent application has already been filed.
26 44th Annual Report 2016-17
gases, twin flue, under jet type. Each battery is of 69 ovens in single block. The batteries have double collecting mains with ovens having 3 nos. of charging holes each and the battery will have double gas collecting mains, one each on pusher side and coke side. There will be two waste heat tunnels on pusher side and coke side with common tunnel leading to chimney located on pusher side in the middle of the battery. The heating walls will have 15 pairs (30 nos.) of vertical flues. Design development of 1.2 MTPA Pellet Plant Company’s developed prototype Ozone Design development for 1.2 MTPA Pellet Plant Monitoring System has been used by R&D team based on travelling grate process is achieved. to provide services in the following projects:- This indigenous pellet plant will have a price advantage and will reduce dependence on 1. Measurement of real time ozone foreign technology providers. With better concentration in and around industrial area understanding of critical design aspects under of Ranchi. Indian raw material condition, this effort will 2. EIA/EMP study for Ozone Monitoring result in optimum yield. at Eight AAQ Locations in and around Mosabani Uranium Recovery Plant (MURP) of Uranium Corporation of India Limited, Ghatsila, W. Singhbhum District, Jharkhand. 3. Ozone Monitoring at seven AAQ location in and around SAIL- Bokaro Steel Plant, Bokaro
On-going Projects
Develop Procedure for Joining Next Generation High Temperature Material to be used for supercritical / ultra supercritical power plant by Friction Stir Welding. This project is to establish the Friction Stir Welding in high temperature material such as P91 in supercritical & ultra-supercritical power plant that will enable thermal MECON Designed 5m Tall Coke Oven Batteries power plant to operate at higher pressure The coke oven complex consists of byproduct & temperature (beyond critical point of recovery type coke oven batteries with water). This is a collaborative project with associated coal, coke and gas handling Jadavpur University. The project is funded by facilities. These batteries are of compound, Ministry of Steel from Plan Fund. Project is in regenerative with partial recirculation of waste progress.
A house of engineering excellence ...aiming beyond 27 MECON Limited
management. The project is funded by Ministry of Steel from Plan fund and will be implemented at RSP, Rourkela
Localized Heat Treatment of Steel Blank for Automotive application with R&D division, TATA Steel.
This project is to develop Lab scale tailored Preparation of DPR for 1000 TPA Nickel Extraction made blank with different combination of Demonstration Plant at Bamnipal, Odisha. microstructure and mechanical properties to produce automotive components using localized The DPR is under preparation based on available heat treatment technique so that complex heat data from Client (Tata Steel Ltd) as well as treated sections can be produced during this technology provider. The job is progressing special process within a single blank. This is a satisfactorily. collaborative project with TATA Steel. Patent No. of Patents Under Process application is in progress. 1 Hybrid thermoelectrically cooled / heated Back- packed Air Circulating Helmet System 2 Thermoelectrically Direct Cooled / Heated Helmet for Various Industrial Applications 3 Improved 5.0 m tall Coke Oven Battery 4 Infrared Camera based ladle Condition Monitoring System 5 Continuous Multi Component Gas Analyzer using NDIR Method Development of Torpedo Ladle Car monitoring 6 Improved 1.0 MTPA Coke Oven Battery with system using Infrared Imaging 49.8 m3 hot oven volume (Angara) In order to achieve minimum failure of Torpedo 7 1.2 MT/Year Pellet Plant ladles and to increase the average life of Torpedo ladles, the best solution is online thermography 8 Improved Blast Furnace and Operation thereof, 3 using automation to locate the hotspot and to Design Development of 4250 m Blast Furnace know the history of the spot for maintaining (Loha) its data base at refectory maintenance for 9 Improved 7.0 meter tall coke oven battery.
28 44th Annual Report 2016-17
Recognition of MECON R&D Use of Timer control lighting which optimizes the power consumption as Renewal of recognition of MECON, R&D by per actual need DSIR, Govt. of India has been obtained vide letter No. TU/IV-RD/1191/2016 dated 01.04.2016 Apart from the technological measures mentioned for Three years (upto 31.03.2019). above, your Company has taken steps towards use of Solar Energy by installing and commissioning a line 13.0 CONSERVATION OF ENERGY AND Grid connected 20.0 kwp Roof Top Solar Power Plant TECHNOLOGY ABSORPTION for its Office Complex.
13.1 Conservation of Energy 13.2 Technology Absorption Efforts are being undertaken to change Steel plant The detailed information on efforts made and configuration by eliminating energy intensive benefits derived like products improvement, outdated technologies and introducing state of the cost reduction, product development or import art energy efficient technologies in iron and steel substitution from technology absorption along with plants of CPSEs. technology imported and expenditure incurred on Over the years, your company has suggested a R&D as per Section 134(3) of the Companies Act, number of established energy saving measures 2013 read with Rule 8 of Companies (Accounts) / technologies to various steel plants projects in Rules 2014 is enclosed at Annexure - I to this Report. India, resulting in saving in scarce, high priced coking coal, saving in import of coking coal and 14.0 FOREIGN EXCHANGE EARNINGS resultant reduction in production costs. In addition AND OUTGO to these measures, the company has suggested few Your Company has earned ` 86.29 lakh Foreign more energy saving measures / technologies in Exchange during the year 2016-17. The expenditure various area of steel production, during 2016-17, in Foreign Exchange remitted/actually spent during which are summarised below: the year is ` 241.04 lakh as per details given below. Iron Making: Installation of in addition to primary dust catcher Cyclone to reduce Particulars (` in Lakh) dust load on gas cleaning plant for efficient • Professional & Consultation Fees. 104.67 gas cleaning. • Other matters 136.37 Steelmaking and continuous casting: Total 241.04 Adoption of Dry GCP in SMS Shop for upcoming project 15.0 HUMAN RESOURCE DEVELOPMENT Electrical In light of your Company’s objective to focus Use of variable frequency drive with and sustain a competent and highly responsive low THD factor with the product workforce with adequate domain expertise, the pumps in POL Terminals to reduce HRD department has undertaken the following power consumption by pumps activities during FY 2016-17, in the areas of Use of roof top Solar power at Green Performance Management, Career Advancement, building/Control room building as Contract Closure and Risk Analysis & Mitigation in well as solar street light at various Projects, Knowledge Management, Personality and SV terminals of Oil & gas Projects to Leadership Development, which are as detailed reduce Grid Power consumption below:-.
A house of engineering excellence ...aiming beyond 29 MECON Limited
Technical In-house Programs conducted for for Women Executives’, ‘Setting up Professional our executives include ‘Training on Selection Goal Oriented Targets & Performance Evaluation’, of technology & product Mix for Steel Plants’, ‘Surge Analysis & Design of Surge Protection ‘WS on formulation of Technical Eligibility Systems’, ‘3 Dimension LASER Land Scanners criteria and preparation of TAR’, ‘Risk Analysis for Mining & other Application’, ‘Low Cost & Mitigation in Projects’, ‘Sensitization on Prefabricated/Precast Mass Housing’, ‘Practical preparation of TS excluding commercial clauses Use & Administration of FIDIC Conditions of and Generation of Unit rates & costing for the Contract’, ‘Inclusion in Steel & Clean Steel projects’, ‘Green Corridor Connectivity’, ‘Training Technology’, ‘Recruitment Rules & Reservation on SolidEdge Software’, ‘Training on Strata in Service’, ‘Water Management, Water Utilities & Control in Underground Mines’, ‘MEP training on Industrial Waste Management’, ‘Functional Skill Plumbing’, ‘Workshop on Oil and Gas Projects’, Development Program for Vigilance Officers’, ‘Workshop on Steel Making and Casting’, ‘Internal ‘Training on GRIHA V 2015’, ‘Innovation in Clean Auditor Recertification Program for ISO 9001: Air Technologies & Process Solutions’, ‘Training 2015’, ‘Workshop on Service Tax Law and GST’. on Corporate Governance’, ‘WS on High Rise & Knowledge Sharing sessions have been ICONIC Building Designing in ETABS V2016’ conducted through domain experts of several Our employees have also been a part of various sections on ‘Workshop on Delegation of Seminars and Symposiums of national and Power’, ‘Talk on Sustainable Development’, international repute in the areas of Iron & Steel, ‘Workshop on Learnings from various executed Mining, R&D, HR, Marketing, Procurement, Projects, along with senior officials from NISP’, Engineering & Design, Technologies & Business ‘Strengthening Indian Steel Demand’, ‘Recent Strategies etc. Developments in the Power Plant Operation & Regarding rationalized utilization of capabilities Abatement of Environmental Issues’ of Non-Executives, in-house training programs In-house soft skills trainings were conducted to on, ‘Quality of Life’ and ‘Retirement Benefit focus on personality and leadership development Pension Fund’ were conducted. on ‘Professionalism and communication’, ‘Personal Technical presentations by reputed companies Effectiveness’, ‘Success Conducive Attitude’, ‘Writ- were organized. Expert talks and workshops ing Management and Presentation Skills’. Further were organized to celebrate Fire Safety Week, a workshop on ‘Public Speaking and Presentation Public Sector Week, World Environment Day, Skills’ was conducted by faculties from XIMB. International Yoga Day, Vigilance Awareness Our executives have been deputed to several Week, Productivity Week, International Women’s reputed institutes for Technical and Skill related Day, Daughter’s Day. trainings in various business domains. Few Additionally, regular Employee Engagement prominent External trainings undergone by programs were conducted such as ‘Workshop on employees are ‘WS on Rain Water harvesting Life after Retirement - Planning through investment & Ground Water management’, ‘WS on in health and wealth’, ‘Managing Depression - Pumping System Optimization for Water the major impediment of life’, ‘Accomplishment Supply/Lift irrigation’, ‘LEO on Maintenance Exhibition- to showcase the accomplishments of Belt Convenor Systems’, ‘Herkules CNC Roll & Scope of services of each section’, ‘In-house turning Lathe Made in India’, ‘Implementation Quiz Competition- MANTHAN’, ‘Case study of Uniform online Appraisal System in all Competition’, ‘Wellness Sessions’, ‘Intersection the CPSEs’ under MoS’, ‘Course on Certified Slogan and Painting Competition’, ‘Intersection Welding Inspectors’, ‘Leadership Development Photography Competition’.
30 44th Annual Report 2016-17
16.0 PERSONNEL & WELFARE are indicated below: Employee strength of your Company at the end of Cat./ Man- No % No % No % the year i.e., as on 31.03.2017 was 1384. Out of the Group power of age of age of of as on SC of ST of PWD PWD total strength of 1384, 259 belong to SC, 138 belong 31st SC ST to ST categories & 10 belong to PWD category. Out March of the total strength of 1384 employees, 139 are 2017 female employees. A 1223 233 19 74 6 6 0.49 B 54 9 17 19 35 0 0 16.1 Sexual Harassment of women at workplace (Prevention, Protection C 107 17 16 45 42 4 3.74 and Redressal Act, 2013) Total 1384 259 19 138 10 10 0.72 Number of Cases filed Number of cases disposed. The Company has adopted adequate measures for Nil Nil safeguarding their interests and welfare, such as promotion as per general trend, proper regard for 16.2 As per DEP Gudielines, women in Public human rights, equality and impartiality in all spheres Sector (WIPS) Cell was established in of activities and providing abundant opportunities your Company in November, 2015 for for self development through sports, cultural, development of women employees and for educational and recreational facilities. Scheduled promoting their interactions with women Caste / Scheduled Tribe employees and their families employees of other public sector units. residing in Shyamali Township enjoy all the facilities available to others. In order to implement the 17.0 INDUSTRIAL RELATIONS Government of India Directives and Post-based Rosters The Company focused on employee relationship with regard to recruitment and promotion of SCs / and all employee related matters were addressed STs, an SC / ST Cell has been formed with Assistant leading to greater satisfaction of the employees. The General Manager as Liaison Officer. The SC / ST Cell work atmosphere remained healthy and harmonious maintains proper record regarding recruitment and and this helped the Company to achieve better promotion and statistics of SC / ST employees and productivity. The Company continued to have furnishes reports to the Ministry of Steel on regular peaceful and cordial relations with the employees basis. The Company has made consistent efforts to and most of the issues were resolved through accommodate SC / ST candidates in all recruitments interactions and dialogue with the representatives in MECON as well as in promotion to the next higher of Non-Executive and Executive employees. Liaison grade as per Government Directive. with other associated external agencies was also maintained cordially and on regular basis. All possible steps are taken to fill up the post in reserved category as per Government Directives 18.0 ACTIVITIES / STEPS TAKEN FOR issued from time to time. THE WELFARE OF SC / STs IN THE COMPANY 19.0 CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT In addition to its corporate and business (CSR & SD) objectives, the Company is fully aware of its social responsibilities for development and welfare of With limited fund, your Company has focused members of Scheduled Caste / Scheduled Tribe on education, women empowerment, healthcare, Communities. The strength and number of SC / ST community development and upgradation candidates presently employed in your Company of infrastructure facilities in some villages of
A house of engineering excellence ...aiming beyond 31 MECON Limited
Jharkhand. Information on CSR&SD activities were also organized at Head Office and other undertaken by the Company, as required under offices of the Company. These include Hindi Essay Section 135 of the Companies Act, 2013 is enclosed and Extempore Speech competitions in Hindi. vide Appendix - II. A special Hindi workshop and one Rajbhasha symposium on "Unicode ke jariye Hindi me Kam- 20.0 OFFICIAL LANGUAGE POLICY (USE Kaj" were organised during the Pakhwara. Besides, OF RAJBHASHA) the company also observed 'Rashtrakavi Ram Dhari Company is effectively implementing the Official Singh "Dinkar" Jayanti' during Hindi Pakhwara. Language Policy of Govt. of India in its official A Hindi House Magazine - "MECON BHARATI" work. The company is also making all out efforts to is also being published by the company. This achieve the targets fixed in the Annual Programme magazine provides a platform for Employees for issued by Rajbhasha Vibhag, Ministry of Home creative writing in Technical field in Hindi. Affairs, Govt. of India. For this purpose, there is an Official Language Implementation Committee 21.0 VIGILANCE ACTIVITIES under the Chairmanship of CMD. Hindi workshops The Vigilance set up of the Company is functioning are being organised for the employees. Your under Smt. Supriya Jaiswal, ITS, Chief Vigilance Company is an important member of Town Official Officer (CVO) who provides a link between the Language Implementation Committee, Ranchi and organization and the Administrative Ministry, CVC actively participates in all the programmes. and CBI and also acts as a special assistant / advisor Your Company has been awarded with to CMD and reports directly to him in all matters 'Sarvotkrishta Rajbhasha Shree Shield' & Certificate pertaining to vigilance. by the Mahanagar Samanvay Samiti, Kolkata under Efforts are on to continuously enhance transparency the agies of Kendriya Sachiwalaya Hindi Parishad, in various business activities of the company with New Delhi in the Rajbhasha conference, 2016 held use of computerization and leveraging of technology. th in Kolkata on 12 August, 2016. Emphasis is laid on preventive vigilance, spreading Dy. Director (OL), Regional Implementation Officer, awareness, surveillance and analysis of system & Ministry of Home Affairs, Joint Director (OL) & Director, procedures in detail to ensure optimum utilization of Ministry of Steel, Govt. of India, New Delhi inspected resources, appropriate & timely decisions, corrective the progressive use of Hindi in Bhilai, Ranchi, Rourkela, action against defaulters and transparency & Delhi & Hyderabad Offices of the company. accountability in the system. In this direction relevant circulars and guidelines from CVC and statutory Your Company participated in the review meeting authorities, as and when issued, are put in the in- called by Secretary, Rajbhasha Vibhag, Govt. of house intranet 'meconinfo' for wider circulation India, Ministry of Home Affairs in connection with among the employees. Various programmes, the implementation of Official Language Hindi in seminars, workshops, talks, interactive sessions Central Public Sector Undertakings held on 17th and quiz competitions are organized by Vigilance January, 2017 in New Delhi. department on vigilance aspects for employees on "Hindi Pakhwara" was observed at Head Office regular intervals. Vigilance articles are also published as well as in all the site offices of the company in the in-house publications whenever possible. from 14.09.2016 to 28.09.2016. On this occasion Complaints are investigated promptly by Vigilance all employees took a pledge to increase use of department as and when received after checking Hindi in their day to day official work. During the their veracity. Sensitive sections / areas in the "Hindi Pakhwara" competitions of various nature organization have been identified and thrust is
32 44th Annual Report 2016-17 laid on conducting surprise inspections, regular Offices commencing from 31st October, 2016 in inspections, scrutiny of files and studies in these which the employees participated with enthusiasm. areas. An Annual Action Plan is drawn for these The theme for observing Vigilance Awareness this activities and it is ensured that targets set in the Action year was “Public Participation in Promoting Integrity Plan are achieved. Suitable suggestions are given for and Eradicating Corruption”. Various programmes / improvement in the system/eliminate discrepancies activities organized on this occasion were Pledge found, if any, during the above activities. A number Ceremony by employees, Integrity Pledge by of suggestions given by Vigilance Department for employees and individuals of corporate / entities / systemic improvement and streamlining various firms, Release of Booklet on “Vigilance in Project procedures have been implemented and the process Management – Do’s and Don’ts in today’s concept” is continuing. Job rotation is an ongoing process in (containing messages of Shri KV Chowdary, CVC the Company based on job requirement with specific and Shri Atul Bhatt, CMD), Talks and sensitization reference to officials working in the sensitive areas. programmes for employees and for students from Online Vigilance Clearance System for the purpose various colleges and schools at Ranchi and at of vigilance clearance / status of employees in other cities all over India (a total of 24 academic case of promotion, resignation, retirement etc. has institutions has been covered including 6 at Ranchi been implemented in November, 2012 for which and 18 outside Ranchi), Mobile App uploaded Vigilance Department maintains a computerized in Intranet for accessing CVC circulars, Quiz database of vigilance records of individual Competition through Mobile App on the Vigilance/ employees of the Company. Anti-corruption topics for MECON employees working at various locations, Display of Banners, Online system for submission of Annual Property Interview given by CVO, MECON in All India Radio, Returns has been implemented in the Company. Ranchi on 04.11.2016 in the programme – MECON APRs for the year 2016 have been submitted by ke CVO se mulakat, Distribution of Pamphlets, the employees. The database of APRs of employees Vigilance Walk, Nukkad Natak, Special Caller Tune is maintained by Vigilance Department which is for all mobile telephones provided by MECON, continuously scrutinized and monitored. Documentary film “SANKALP” for spreading Integrity Pact (IP) is functional in MECON since awareness against Corruption, Newspaper coverage 2007 and MECON enters into Integrity Pact with and Prize / Memento distribution ceremony etc. vendors / suppliers / contractors for orders of Rs. 1.0 Crore & above for EPC Projects and for orders of Rs. Complaint Handling Policy has been uploaded on 25.0 Crore & above for Town Administration and in- Company’s website with a provision of lodging house procurement. The draft Integrity Pact forms complaint online which is accessible to common part of tender documents, wherever applicable. individuals. Contact details of CVO and Senior Till March, 2017, MECON has signed Integrity Officials of Vigilance department, Organizational Pact (IP) with 132 suppliers / contractors. So far no Structure of Department, Vigilance Quality Policy representation / complaints / disputes have been of the Company and ISO Certificate of Vigilance received in the matters of tenders and contracts Department have been uploaded on Company’s under IP. An Independent External Monitor (IEM) website www.meconlimited.co.in. Whistle Blower is in position to oversee the process of procurement Policy and Fraud Prevention Policy, The Handbook and transactions where Integrity Pacts are signed of CVC Circulars & Guidelines, Resolution on between MECON and counterparties. Public Interest Disclosures & Protection of Informer (PIDPI), Integrity Pact and RTI Manual have been Vigilance Awareness Week-2016 was observed at uploaded in the Vigilance tab available on the MECON Head Office, Ranchi and at various Site Company’s website.
A house of engineering excellence ...aiming beyond 33 MECON Limited
Your Company is pleased to inform you that To cover all the elements of risk at enterprise level, Vigilance Department follows a well-established risks have been divided into five categories as Quality Management System (ISO 9001:2008) shown in the following diagram. which has been certified by M/s TUV India Pvt. Ltd. (a subsidiary of TUV NORD CERT Gmbh, Germany). Technical
22.0 DEVELOPMENT AND IMPLEMENTA- TION OF RISK MANAGEMENT Marketing Your Company is committed to the continual Risk Contracts identification, assessment / monitoring and Categories management of risks associated with its overall business processes and operations. Management is Financial accountable to the Board of Directors for effective deployment of risk management strategies in all Human relevant areas of company operations. Resource The Company’s risk management policies and procedures cover regulatory, legal, property, Throughout the year, regular reviews are held treasury and financial reporting. A clear at both the corporate and operational levels to organizational structure exists detailing lines identify and prepare action plans to address any of authority and control responsibilities. Each new opportunities or risks that have arisen or business unit is responsible and accountable for likely to emerge since the previous review. The implementing procedures and exercise controls to management discusses all categories of risks with manage risks within its business domain. members of the Audit Committee. Risks associated with compliance and financial reporting is also The objective of the Company’s risk management shared with the Audit Committee. On quarterly policy is to manage and in the long term, achieve basis, the management reviews actual performance a substantial reduction in its risk exposure and against the targeted budget and forecast are held maintain it at acceptable levels. The aim is to with all supplementary data / documents. The maintain the balance between compliance and well established risk management and control performance. systems thus described and adopted provide Based on the probable impact and likelihood a reasonable assurance as to the realization of of occurrence of the risk, requisite controls and strategic objectives. Also, the framework is subject mitigation action plans have been designed for risk to constant monitoring and review to prevent / treatment. Further, Company has established within eliminate the instances of non-compliance with its management and reporting systems, a number rules and regulations. of internal controls to mitigate the risks. These Risk Management Committee: internal controls / processes are duly managed by the Company’s Board of Directors, management In compliance with the observation made by the th and other personnel, designated to provide Board of Directors in its 216 Meeting held on th reasonable assurance regarding the achievement of 15 March, 2016, the Risk Management Committee organization’s business objectives. was constituted at management level in the company in June, 2016.
34 44th Annual Report 2016-17
The role of Risk Management Committee was Shri A.P.Singh, Director (Engineering) retired from to review the existing risk management policy the services of the Company on attaining the age of and suitably design & updating the framework of superannuation on 31.12.2016. existing policy. Shri P. K. Sarangi, was appointed as Director (Technology) of the Company w.e.f 01.01.2017. 23.0 RIGHT TO INFORMATION Later on he was redesignated as Director (Technical) In line with the directives of the Government of by the order of Ministry of Steel. India, your Company has implemented the Right Shri Saraswati Prasad, IAS, AS&FA to the Govt. to Information Act, 2005 from the date of its of India, Ministry of Steel was appointed as implementation. All relevant manuals pertaining to Government Director on the Board of the Company RTI Act, 2005 have been hoisted on the Company’s w.e.f 08.02.2017. website www.meconlimited.co.in w.e.f. 19.09.2005 and are timely updated. A Public Information Officer Shri Goutam Chatterjee was appointed as Director (PIO) has been nominated by the Management (Commercial) of the Company w.e.f. 20.03.2017. at its Headquarters and various Asst. Public Information Officers (APIO) have been nominated 25.0 MANAGEMENT DISCUSSION & at Head Office as well as various Regional and Site ANALYSIS REPORT offices of the Company. The queries coming to the The Management Discussion & Analysis Report Company from the public are being attended to by covering the performance and outlook of the these nominated officials and replied back to the Company is enclosed vide Annexure-II. applicant by the Public Information Officer within the stipulated time period. 26.0 CORPORATE GOVERNANCE All quarterly and annual returns are timely e-filed The company has complied with the requirements with the Statutory Authorities. of Corporate Governance. The detail in this regard forming part of this report is enclosed vide 24.0 CHANGES IN BOARD OF DIRECTORS Annexure-III. Shri A.K.Tyagi, CMD retired from the services of the Company on attaining the age of superannuation 27.0 AUDITORS on 30.09.2016. M/s. V. Rohatgi & Co, Chartered Accountants, 1st Shri Atul Bhatt, was appointed as Chairman and Floor, Sarjana Building, 1, Main Road, Ranchi – Managing Director of the Company w.e.f 01.10.2016. 834001 (Jharkhand) were appointed as Statutory Shri Deepak Dutta, Director (Commercial) retired Auditors by the Comptroller & Auditor General from the services of the Company on attaining the of India to audit the accounts of the Company for age of superannuation on 31.10.2016. the financial year 2016-17. They have also been assigned to carry out the audit under Section 44AB Consequent upon transfer to Ministry of Fertilizer, of the Income Tax Act, 1961 for the year 2016-17. Govt. of India as Officer on Special Duty, Smt Bharathi S. Sihag, IAS, Government Director and 28.0 DIRECTOR’S RESPONSIBILITY SS&FA, Ministry of Steel, cease to be the Director STATEMENT of the Company w.e.f. 30.11.2016. Pursuant to the requirement under Section 134 Shri S.R. Sengupta, Director (Technology) retired (5) of the Companies Act, 2013 with respect to from the services of the Company on attaining the Director’s Responsibility Statement, it is hereby age of superannuation on 31.12.2016. confirmed that:
A house of engineering excellence ...aiming beyond 35 MECON Limited i) In the preparation of the annual accounts for 29.0 ACKNOWLEDGEMENT st the financial year ended 31 March, 2017, Your Directors are pleased to place on record their the applicable accounting standards had appreciation for the contribution of all concerned been followed along with proper explanation towards the successful working of the Company relating to material departures; during the year. The Directors also express their ii) The Directors had selected such accounting sincere and grateful thanks to the Company’s policies and applied them consistently and trusted clients, suppliers, sub-contractors and other made judgments and estimates that are partners & stakeholders in business for enabling it reasonable and prudent so as to give a true and to perform up-to the expectations of the customers. fair view of the state of affairs of the Company Your Directors gratefully acknowledge the at the end of the financial year and of the profit support, cooperation and guidance received from or loss of the Company for that period; the Ministry of Steel, Government of India and various other Ministries, Govt. of Jharkhand and iii) The Directors had taken proper and sufficient Departments of the Central and State Governments care for the maintenance of adequate and Indian Embassies abroad. accounting records in accordance with the provisions of the Companies Act, 2013 for Your Directors also place on record their safeguarding the assets of the Company and appreciation and also acknowledge the dedicated for preventing and detecting fraud and other efforts of its employees at all levels for smooth irregularities;. functioning of the Company. iv) The Directors had prepared the annual For and on behalf of the accounts for the financial year 2016-17 on a Board of Directors going concern basis; and v) The Directors had devised proper systems to Atul Bhatt ensure compliance with the provisions of all Chairman and Managing Director applicable laws and that such system were Place: Ranchi adequate and operating effectively. Date : 29/08/2017
36 44th Annual Report 2016-17
Appendix - I
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2017
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 & VIVEKANANDA PATH, P.O. DORANDA, RANCHI- 834 002 contact details (JHARKHAND) 6 Whether listed company NO 7 Name, Address & NIL contact details of the Registrar & 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 / services NIC Code of the % to total turnover of No. Product/service the company 1 CONSULTANCY SERVICES 76.33% 2 CONSTRUCTION CONTRACTS 23.67%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Holding/ Sl % of shares Applicable Name and address of the Company CIN/GLN Subsidiary/ No held Section Associate 1 METALLURGICAL & ENGINEERING JOINT 50% 2(6) OF CONSULTANTS (NIGERIA) LTD. VENTURE COMPANIES ACT, 2013
A house of engineering excellence ...aiming beyond 37 MECON Limited
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 % Category of % of Change % of Total Shareholders Demat Physical Total Demat Physical Total Total during Shares Shares the year A. Promoters (1) Indian a) Individual/ HUF - 240 240 0.0006% - 240 240 0.0006% 0.000% b) Central Govt - 40,138,120 40,138,120 99.9994% - 40,138,120 40,138,120 99.9994% 0.000% c) State Govt(s) - - - 0.000% - - - 0.000% 0.000% d) Bodies Corp. - - - 0.000% - - - 0.000% 0.000% e) Banks / FI - - - 0.000% - - - 0.000% 0.000% f) Any other - - - 0.000% - - - 0.000% 0.000% Sub Total (A) (1) - 40,138,360 40,138,360 100.000% - 40,138,360 40,138,360 100.000% 0.000%
(2) Foreign a) NRI Individuals - - - 0.000% - - - 0.000% 0.000% b) Other - - - 0.000% - - - 0.000% 0.000% Individuals c) Bodies Corp. - - - 0.000% - - - 0.000% 0.000% d) Banks / FI - 0.000% - - 0.000% 0.000% e) Any other - - - 0.000% - - - 0.000% 0.000% Sub Total (A) (2) - - - 0.000% - - - 0.000% 0.000% TOTAL shareholding of - 40,138,360 40,138,360 100.000% - 40,138,360 40,138,360 100.000% 0.000% promoter (A) = (A) (1) + (A) (2) B. Public Shareholding 1. Institutions a) Mutual Funds - - - 0.000% - - - 0.000% 0.000% b) Banks / FI - - - 0.000% - - - 0.000% 0.000% c) Central Govt - - - 0.000% - - - 0.000% 0.000% d) State Govt(s) - - - 0.000% - - - 0.000% 0.000% e) Venture Capital - - - 0.000% - - - 0.000% 0.000% Funds f) Insurance - - - 0.000% - - - 0.000% 0.000% Companies g) FIIs - - - 0.000% - - - 0.000% 0.000% h) Foreign Venture : - - - 0.000% - - - 0.000% 0.000% \Capital Funds i) Others (specify) - - - 0.000% - - - 0.000% 0.000% Sub-total (B)(1):- - - - 0.000% - - - 0.000% 0.000%
38 44th Annual Report 2016-17
2. Non-Institutions No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Category of Change % of Shareholders % of Total during Demat Physical Total Demat Physical Total Total Shares the year Shares a) Bodies Corp.
i) Indian -- - 0.000% - - - 0.000% 0.000%
ii) Overseas -- - 0.000% - - - 0.000% 0.000%
b) Individuals
i) Individual -- - 0.000% - - - 0.000% 0.000% shareholders holding nominal share capital upto Rs. 1 lakh ii) Individual -- - 0.000% - - - 0.000% 0.000% shareholders holding nominal share capital in excess of Rs 1 lakh c) Others (specify)
Sub-total (B)(2):- - - - 0.000% - - - 0.000% 0.000%
Total Public (B) = (B) - - - 0.000% - - - 0.000% 0.000% (1) + (B) (2) C. Shares held by - - - 0.000% - - - 0.000% 0.000% Custodian for GDRs
& ADRs Grand Total - 40,138,360 40,138,360 100.000% - 40,138,360 40,138,360 100.000% 0.000% (A+B+C)
(ii) Shareholding of Promoters
SN Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change in share- No. of % of total % of Shares No. of % of total % of holding Shares Shares Pledged/ Shares Shares of Shares during the of the encumbered the com- Pledged year company to pany / encum- total shares bered to total shares 1 PRESIDENT OF INDIA 40138120 99.9994% NIL 40138120 99.9994% NIL 0.000%
2 Govt. Director 120 0.0003% NIL 120 0.0003% NIL 0.000%
3 CMD, MECON 120 0.0003% NIL 120 0.0003% NIL 0.000%
TOTAL 40,138,360 100.000% 40,138,360 100.000% 0.000%
A house of engineering excellence ...aiming beyond 39 MECON Limited
(iii) Change in Promoters’ Shareholding (please specify, if there is no change)
SN Particulars Shareholding at the beginning of the year Cumulative Shareholding during 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 Shareholding during - NO CHANGE - the year specifying At the end of the year
(iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs): SN For each of the Top 10 Shareholding at the beginning of the year Cumulative Shareholding during the year shareholders No. of shares % of total shares No. of shares % of total shares
At the beginning of the year Date wise Increase /Decrease in Promoters Shareholding during the year specifying - NIL - 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 Shareholding at the beginning of the year Cumulative Shareholding during the year Directors and Key Managerial Personnel No. of shares % of total Shares No. of shares % of total shares 1 GOVT. DIRECTOR
At the beginning of the year 120 0.0003% 120 0.0003%
Date wise Increase 0.000% 0.000%
At the end of the year 120 0.0003% 120 0.0003%
2 CMD
At the beginning of the year 120 0.0003% 120 0.0003%
Date wise Increase 0.000% 0.000%
At the end of the year 120 0.0003% 120 0.0003%
40 44th Annual Report 2016-17
V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment. (Amt. Rs./Lacs)
Particulars Secured Loans Unsecured Deposits Total excluding deposits Loans Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount - - - -
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 2.54 - - 2.54
Total (i+ii+iii) 2.54 - - 2.54
Change in Indebtedness during - - the financial year
Addition - - - -
Reduction 2.54 - - 2.54
Net Change 2.54 - - 2.54
Indebtedness at the end of the - - financial year
i) Principal Amount - - - -
ii) Interest due but not paid - - - -
iii) Interest accrued but not due NIL - - NIL Total (i+ii+iii) NIL - - NIL
A house of engineering excellence ...aiming beyond 41 MECON Limited
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sl. Particulars of Name of Managing Director / Whole time Director / Manager (Shri) No. Remuneration Atul S. P. K. Gautam Deepak AK. A P S R Bhatt Chattopahyay Sarangi Chatterjee Dutta Tyagi Singh Sengupta From From From From From From From From 01-10-16 01-04-16 01-01-17 20-03-17 01-04-16 01-04-16 01-04-16 01-04-16 Period to to to 31-03-17 to to to to to 31-03-17 31-03-17 31-03-17 31-10-16 30-09-16 31-12-16 31-12-16
1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income- tax Act, 1961 10,55,920.00 28,21,377.00 5,77,157.00 78,063.00 30,60,200.00 31,01,156.00 19,75,819.00 20,40,142.00 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 79,282.00 2,01,794.00 60,217.00 5,602.00 1,18,038.00 1,09,914.00 1,40,520.00 1,42,811.00 (c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 2 Stock Option
3 Sweat Equity
Commission
4 - as % of profit
- others, specify 5 Others, please specify Total (A) 11,35,202.00 30,23,171.00 6,37,374.00 83,665.00 31,78,238.00 32,11,070.00 21,16,339.00 21,82,953.00 Ceiling as per the
Act
42 44th Annual Report 2016-17
B. Remuneration to other Directors
SN. Particulars of Remuneration Name of Directors Total Amount Shri Sisir Kumar Appikatla
1 Independent Directors Fee for attending board committee meetings 1,10,000.00 Commission - Others, please specify - Total (1) - 1,10,000.00 2 Other Non-Executive Directors Shri Saraswati Prasad, IAS & Shri Syedani Abbasi, IAS
Fee for attending board committee meetings - - Commission - - Others, please specify - - Total (2) - - Total (B)=(1+2) - 1,10,000.00 Total Managerial Remuneration 1,10,000.00 Overall Ceiling as per the Act
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (*)
SN. Particulars of Remuneration Name of Key Managerial Personnel Total Amount
Name Company Designation CEO CFO Secretary 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 Stock Option 2 - NA - 3 Sweat Equity Commission 4 - as % of profit - others, specify 5 Others, please specify Total
(*) NOTE: Since MECON Limited is a Private Limited Company, the provision related to appointment of KMP is not applicable.
A house of engineering excellence ...aiming beyond 43 MECON Limited
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Details of Penalty / Section of the Authority Appeal made, Brief Punishment / Type Companies [RD / NCLT / if any (give Description Compounding fees Act COURT] Details) imposed A. COMPANY Penalty Punishment NIL Compounding B. DIRECTORS Penalty Punishment NIL Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment NIL Compounding
44 44th Annual Report 2016-17
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, if any NA (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 required under first proviso to section 188 NA
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 value, if any NA (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
A house of engineering excellence ...aiming beyond 45 MECON Limited
Appendix - II
CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY Development (CSR&SD)
1 a) Brief Outline of CSR & Sustainability Policy of MECON Limited The CSR & Sustainability policy of MECON (Based on the DPE guidelines and Companies Act’2013) was placed before the Board Level Committee in their 5th meeting held on 10.12.2013. Subsequently, the Board in their 206th meeting approved it. It is available at MECON’s website : www.meconlimited.co.in/Writereaddata/Downloads/CSR_Policy.pdf MECON has the two-tier organizational structure within the organization to steer the CSR agenda. The Board Level Committee comprising of Directors(*) alongwith a Nodal Officer (appointed by Board Level Committee) & a team of officials (cross-section of employees) constitute the two-tier organization structure. The annual budget for CSR and Sustainability is approved by Board of Directors. The CSR plans are formulated and approved by Board Level Committee (*) and ratified by Board of Directors, as per Companies Act’ 2013 and DPE guidelines. MECON shall spend in each financial year, at least 2.0% of the average net profits of the company made during the three immediately preceding financial years. Any unspent/unutilized fund of a particular year, is carried forward to the following year. The overall responsibility of CSR plans lies with the Nodal Officer, CSR & Sustainability. The activities of CSR & Sustainability are as per Schedule-VII of 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. All the CSR activities are implemented in project mode. MECON being an organization with expertise in Engineering as well as Project Management, all the CSR projects are monitored by MECON. The implementation and monitoring of CSR activities are overseen by the Board Level Committee. As per Board’s approved CSR & Sustainability policy, Impact Assessment for all completed CSR projects/ activities upto project cost of ` 50.0 lakhs are carried out by MECON. However, where project cost exceeds of ` 50.0 lakhs, the Impact Assessment is carried out by external agency. MECON 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 are indicated at Annexure-I. The same is also available at MECON’s website : www.meconlimited.co.in/csr_activities_planned. aspx
Note: (*) # Headed by an Independent Director and two full-time Directors (till 31st December’2016) # Reconstituted as – An Independent Director as Chairman, a part-time Independent Director as member & one full-time Director as member.
46 44th Annual Report 2016-17
c) The main highlights of CSR Projects/ Activities undertaken by MECON during the year are as follows: i) Swachh Vidyalaya – Swachh Bharat Abhiyan – Construction of New Toilets/ Repair of Dis- functional Toilets/ Installation of Pre-fabricated Bio-Toilets in MHRD Schools ii) Rural Development Projects iii) Preventive Healthcare and Drinking Water Projects iv) Education, Employment enhancing Vocational Skills and Livelihood Enhancement Projects v) Promotion & Development of Traditional Arts vi) Environmental Sustainability vii) Other welfare activities/ Miscellaneous Programs
2. Composition of the CSR Committee As per Department of Public Enterprises (DPE), Ministry of Heavy Industries & Public Enterprises, Board Level Committee on Sustainable Development was constituted vide Memorandum of Circulation to the Board of Directors ref. no. 11/78/4(3)/117 dated 01.03.2012. The Board Level CSR & Sustainability Committee was reconstituted vide Item No. 203/3478 in the 203rd meeting of the Board of Directors of MECON on 19.09.2013. The Board Level CSR & Sustainability Committee was again reconstituted and approved vide Item No. 206/3542 in the 206th meeting of the Board of Directors held on 27.04.2014. The Board Level CSR & Sustainability Committee was once again reconstituted vide Memorandum of Circulation to the Board of Directors ref. no. 11/78/4(3)/593 dated 03.11.2014. The Committee consisted of the following Directors : i) Shri Syedain Abbasi, IAS Director – MECON & Joint Secretary, Govt. of India, Ministry of Steel ii) Shri S.R. Sengupta Director (Technology) MECON Limited (Till 31.12.2016) iii) Shri A.P. Singh Director (Engineering) MECON Limited (Till 31.12.2016) Thereafter, the Board Level CSR & Sustainability Committee was again reconstituted and approved vide Item No. 223/3833 in the 223rd meeting of the Board of Directors held on 22.02.2017.
A house of engineering excellence ...aiming beyond 47 MECON Limited
The present Board level CSR & Sustainability Committee consists of the following Directors : i) Shri Syedain Abbasi, IAS Director – MECON & Joint Secretary, Govt. of India, Ministry of Steel ii) Shri Sisir Kumar Appikatla Part-time Independent Director MECON Limited iii) Shri Pradipta Kumar Sarangi Director (Technical) MECON Limited The above details are also available in MECON’s website: www.meconlimited.co.in/Board_ level_comitte_csr.aspx
3. a) Net Profit available for CSR for the last 3 financial years are as follows : 2013-14 : ` 6,842.54 Lakhs 2014-15 : ` 3,273.95 Lakhs 2015-16 : ` (-)17,496.18 Lakhs b) Average Net Profit for the last 3 financial years : ` (-) 2,459.90 Lakhs 4. Prescribed CSR expenditure (2%) of the : NIL amount for Financial Year 2016-17 is 5. Details of CSR fund spent during the financial year 2016-17, are indicated in Annexure-II. Manner in which the amount spent are as given below : a) Total amount to be spent for the financial year 2016-17 : : i) Carry-over fund of previous years : ` 270.43 Lakhs ii) Allocation for financial year 2016-17 : ` 000.00 Lakhs ______
Total amount : ` 270.43 Lakhs ______
b) Total amount spent on CSR activities : ` 67.31 Lakhs during financial year 2016-17 c) Amount unspent (to be carried to next : ` 203.12 Lakh financial year, i.e., FY 2017-18)
6. Reasons for not spending the amount : 6.1 The majority of the CSR projects/activities are infrastructure development projects which takes time in conceiving the project, carrying out basic design & detailed engineering, tendering, drawing approval and then construction, etc.
48 44th Annual Report 2016-17
Further, the mechanism of undertaking & executing CSR projects/activities in LWE (Left Wing Extremism) affected villages/areas, through involvement of Gram Pradhan/ Gram Sabha for need assessment, making available the requisite land with NOC etc. is very time consuming. In addition, the other responsible factors which affect the execution of project in LWE areas are: i) Non-availability of good Contractors for working in such extremism affected remote villages of Jharkhand. ii) Finalising Contractors to work in the LWE affected areas of Jharkhand is very difficult. iii) Non-availability of skilled labour in extremism affected remote villages of Jharkhand. iv) Threat perception for the workers, supervisors & contractors in the extremism affected remote villages of Jharkhand. v) Transportation of building materials in extremism affected remote villages of Jharkhand. vi) Carrying out construction activities in the LWE affected areas is a problem. The above problems in LWE affected areas results in very slow progress of work and fulfillment of targets. This in turn affects the utilization of CSR funds.
6.2 In addition, the following project as listed below could not be taken up due to the reasons as indicated: i) Providing 2 nos. Mortuary Refrigerator (Freezer Box) to Local NGOs/ Societies of Ranchi (Sl. No.1 (iv) of List of New Projects for FY 2016-17) : The tender was cancelled as the price quoted by the parties for Mortuary Boxes was much higher than the approved CSR Budget. ii) Providing Ceramic and Pottery unit for Skill development program at Ispat Mahila Vikas Sahyog Samiti Ltd., Ranchi (Sl. No.2 (ii) of List of New Projects for FY 2016-17) : The above project could not be started due to terms of payments given by the different suppliers.
7.0 A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and policy of the company.
8.0 It is also affirmed that all the applicable clauses of Guidelines issued by DPE vide OM No.: 15(13)/2013-DPE(GM) dt: 21.10.2014 is being complied with.
Sd/- Sd/- P. K. Sarangi Syedain Abbasi, IAS Director (Technical) Chairman (CSR Committee)
A house of engineering excellence ...aiming beyond 49 MECON Limited
Annexure - I of Appendix - II
Summary of Planned Expenses for on-Going Regular / Carry Over Projects under Implementation and New Projects for FY 2016-17
Sl. Projects Item Planned Planned Planned Total Remarks No. no. of Recurring Expenses Expenses Planned Schedule- expenses on on Carry- on New Expenses VII On-going over Projects of (In Rs. Regular projects 2016-17 (In Lakhs) (Committed) (In Rs. Rs. Lakhs) activity (In Lakhs) Rs. Lakhs)
Swachh Vidyalaya – Swachh Bharat Abhiyan : Construction/Maintenance 1 (i) 0.000 10.660 0.000 10.660 of Toilets in MHRD Schools, Construction of Tubewells/Borewells etc.
Healthcare, Sanitation and 2 (i) 8.000 11.000 16.000 35.000 Drinking Water projects
Education, Employment Enhancing Vocational 3 (ii) 11.020 8.305 8.000 27.325 Skills and Livelihood Enhancement projects
Projects for Old Age 4 Homes, Orphanage, (iii) 0.000 27.000 0.000 27.000 Differently Abled etc.
5 Rural development projects (x) 0.000 121.511 0.000 121.511
Other Activities/ 6 9.242 38.862 0.000 48.104 Miscellaneous Programs TOTAL 28.26 217.34 24.00 269.60 Note : • The overall expenditure on On-Going Regular Projects/Carry-Over Projects/New Projects shall be limited to the total fund avaiable ` 270.43 lakhs.
50 44th Annual Report 2016-17
List of “on going Regular Projects” under Implementation for FY 2016-17 Financial Planned Progress Recurring Item Project Target (%) in expenses on On- Sl. no. of Cost Projects FY 2016-17 going Regular Remarks No. Schedule- (In Rs. (Committed) VII Lakhs) From To activity (In Rs. Lakhs) 1 Healthcare, Sanitation and Drinking Water projects i) Organising Health camps/Health (i) 0 100 3.000 On-going 3.000 Awareness Programs etc. regular activity ii) Engagement of Doctors etc. on Contract (i) 0 100 5.000 On-going 5.000 Basis for Health Camps regular activity Sub-Total 8.000 8.000
2 Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects i) Honorarium to Teachers of 13 (ii) 0 100 3.432 3.432 On-going Community Education Centres regular activity ii) Study Materials, Stationery etc. for (ii) 0 100 0.900 0.900 On-going Community Education Centres regular activity iii) Honorarium to Teachers of 10 Stitching (ii) 0 100 2.640 2.640 On-going Centres regular activity iv) Cloth, Stitching Materials for Students (ii) 0 100 0.750 0.750 On-going of Stitching Centres for Training regular activity v) Annual Examination of 10 Stitching & (ii) 0 100 0.850 0.850 On-going Embroidery Centres regular activity vi) Honorarium to Staff members of VTI, (ii) 0 100 1.948 1.948 On-going Ranchi regular activity vii) Procurement of Electrical / Electronic (ii) 0 100 0.500 0.500 On-going items, Consumables etc. for VTI, Ranchi regular activity Sub-Total 11.020 11.020
3 Other Activities / Miscellaneous Programs i) Engagement of Photographer, Messenger 3.242 3.242 On-going etc. as supporting staff regular activity ii) Tours & travels for monitoring, site 2.500 2.500 On-going supervision etc. of projects regular activity iii) Training of CSR employees & associated 0.500 0.500 On-going personnel for capacity building regular activity iv) Printed stationery, Banners, Signboards 1.000 1.000 On-going etc. regular activity v) Miscellaneous programmes 2.000 2.000 On-going regular activity Sub-Total 9.24 9.24 TOTAL 28.26 28.26
A house of engineering excellence ...aiming beyond 51 MECON Limited
Corporate Social Responsibility and Sustainability List of Carry-Over Projects under Implementation for FY 2016-17
SI Projects Item Financial Project Expenses Under Planned Expenses on Carry-over Remarks No no. of Progress Cost done in Initiation projects (In Rs. Lakhs) Schedule Target (%) in (in Rs. FY 12-13, stage/ Under Under Sub- -VII FY 2016-17 Lakhs) 13-14, Man- Tendering / construction Total 14-15 & agement Ordering stage / 15-16 (in Approval stage billing Rs. Lakhs) stage stage From To Active Less Active 1. Swachh Vidyalaya – Swachh Bharat Abhiyan : Construction/Maintenance of Toilets in MHRD Schools, Construction of Tubewells/Borewells etc. i) Construction Project of of 53 nos. FY 2014- new Toi- 15 let Blocks/ Repair of (i) 84.72 100 57.33 48.67 8.660 8.660 dis-function- al Toilets in MHRD schools ii) Maintenance Project of of 36 Nos. (i) 0 100 2.00 2.00 2.000 FY 2014- Bio-Toilets 15 Sub-Total 59.33 0.000 0.000 8.660 10.660
2. Healthcare, Sanitation and Drinking Water projects i) Providing 3 (three) nos. Project of Ambulances (i) 0 100 10.00 10.00 10.000 FY 2015-16 in Rural areas of Jharkhand ii) Providing a Additional Ambulance fund to Bharat requirement Sevashram for Sl. Sangh No. 2 i) to meet the expenses of the vehicle (i) 0 100 1.00 1.00 1.000 (Already approved project of FY 2015- 16) (Fund provision in FY 2014- 15 : ` 10.0 lakhs) Sub-Total 11.00 0.000 0.000 0.000 11.000
52 44th Annual Report 2016-17
SI Projects Item Financial Project Expenses Under Planned Expenses on Carry-over Remarks No no. of Progress Cost done in Initiation projects (In Rs. Lakhs) Schedule Target (%) in (in Rs. FY 12-13, stage/ Under Under Sub- -VII FY 2016-17 Lakhs) 13-14, Man- Tendering / construction Total 14-15 & agement Ordering stage / 15-16 (in Approval stage billing Rs. Lakhs) stage stage From To Active Less Active 3. Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects i) Augmen- tation of Project of Anganwadi (ii) 0 100 2.00 2.000 2.000 FY 2015-16 Centre at Vil- lage-Pancha, Dist.-Ranchi ii) Augmentation of Infrastruc- ture facilities Project of at Livelyhood (ii) 0 100 4.00 4.000 4.000 FY 2015-16 generation centres in Ranchi iii) Construction Project of of Training- FY 2012- Cum- 13; Balance Dormitory (ii) 95 100 24.70 23.47 1.235 1.235 fund relates for Blind to Lightning Girls in protection Ranchi system iv) Construction of Office- cum-Training Project of & Dormitory (ii) 95 100 19.78 18.91 0.870 0.870 FY 2014-15 (2nd floor) for Blind Girls in Ranchi v) Augmentation Additional of fund require- Anganwadi ment for Sl. Centre at No. 3 i) for Village- completion Pancha, of work Dist.-Ranchi of already (ii) 0 100 0.20 0.200 0.200 approved project of FY 2015-16 (Fund pro- vision in FY 2015-16 : ` 2.0 lakhs) Sub-Total 50.68 0.000 0.000 8.305 8.305
A house of engineering excellence ...aiming beyond 53 MECON Limited
SI Projects Item Financial Project Expenses Under Planned Expenses on Carry-over Remarks No no. of Progress Cost done in Initiation projects (In Rs. Lakhs) Schedule Target (%) in (in Rs. FY 12-13, stage/ Under Under Sub- -VII FY 2016-17 Lakhs) 13-14, Man- Tendering / construction Total 14-15 & agement Ordering stage / 15-16 (in Approval stage billing Rs. Lakhs) stage stage From To Active Less Active 4. Projects for Old Age Homes, Orphanage, Differently Abled etc. i) Construction of Boys Project of Hostel in (iii) 0 100 15.00 15.000 15.000 FY 2015-16 Orphanage at Vill.-Sungi, Khunti ii) Construction Additional of Boys fund require- Hostel in ment for Sl. Orphanage at No. 4 i) for Vill.-Sungi, completion Khunti of already ap- (iii) 0 100 12.00 12.000 12.000 proved project of FY 2015-16 (Fund pro- vision in FY 2015-16 : ` 15.0 lakhs) Sub-Total 27.00 27.000 0.000 0.000 27.000
5. Rural development projects i) Construction of Toilet Block Project of in Village (x) 74.54 100 42.07 31.40 10.672 10.672 FY 2012-13 School of Adopted Village-Pancha ii) Construction of Toilet Project of Complex (x) 79.53 100 59.14 47.04 12.098 12.098 FY 2012-13 in Adopted Village-Pancha iii) Construction of Toilet Complex Project of in Adopted (x) 36.99 100 59.14 21.88 37.258 37.258 FY 2012-13 Village-Parsa Toil, Pancha iv) Construction of Toilet Block Project of for Girls in (x) 70.87 100 35.37 25.07 10.304 10.304 FY 2013-14 Orphanage of Adopted Village - Sungi
54 44th Annual Report 2016-17
SI Projects Item Financial Project Expenses Under Planned Expenses on Carry-over Remarks No no. of Progress Cost done in Initiation projects (In Rs. Lakhs) Schedule Target (%) in (in Rs. FY 12-13, stage/ Under Under Sub- -VII FY 2016-17 Lakhs) 13-14, Man- Tendering / construction Total 14-15 & agement Ordering stage / 15-16 (in Approval stage billing Rs. Lakhs) stage stage From To Active Less Active v) Construction of Toilet Block for Boys in Project of Orphanage (x) 38.78 100 35.57 13.80 21.770 21.770 FY 2014-15 of Adopted Village - Sungi vi) Construction Project of of Class rooms (x) 97 100 15.21 12.36 1.930 1.930 FY 2012-13 in Rural areas of UP vii) Construction/ Project of Upgradation (x) 97.57 100 24.64 22.18 0.500 0.500 FY 2012-13 of Village roads of UP viii) Construction of Akhra and Roof slab of Project of Community (x) 0 100 2.98 2.980 2.980 FY 2014-15 Centre at Village- Pandu Toli ix) Construction of Drinking water system Project of at Vill.-Lalpur, (x) 0 100 15.00 15.000 15.000 FY 2015-16 Block- Kairabera, Dist.- Simdega x) Construction Additional of Drinking fund require- water ment for Sl. system at No. 5 xi) as Vill.-Lalpur, per site re- Block- quirement for Kairabera, completion Dist.- (x) 0 100 9.00 9.000 9.000 of already Simdega approved project of FY 2015-16 (Fund pro- vision in FY 2015-16 : ` 15.0 lakhs) Sub-Total 298.12 24.000 0.000 97.511 121.511
A house of engineering excellence ...aiming beyond 55 MECON Limited
SI Projects Item Financial Project Expenses Under Planned Expenses on Carry-over Remarks No no. of Progress Cost done in Initiation projects (In Rs. Lakhs) Schedule Target (%) in (in Rs. FY 12-13, stage/ Under Under Sub- -VII FY 2016-17 Lakhs) 13-14, Man- Tendering / construction Total 14-15 & agement Ordering stage / 15-16 (in Approval stage billing Rs. Lakhs) stage stage From To Active Less Active 6. Other Activities / Miscellaneous Programs i) Construction of Project of 18.98 100 40.00 6.69 33.310 33.310 Community FY 2013-14 Centre in UP ii) Exhibition - Project of cum - Craft 4.00 4.000 4.000 FY 2015-16 Mela iii) Impact Project of assessment 5.00 1.000 1.000 FY 2015-16 report iv) Construction Additional of fund re- Community quirement Centre at for Sl. No. Akbarpur, 6 i) to cover Kanpur additional foundation Dehat in UP work done at site for 0.55 0.552 0.552 completion of already approved project of FY 2013-14 (Fund pro- vision in FY 2013-14 : ` 40.00 lakhs) Sub-Total 49.55 0.000 0.000 38.862 38.862 TOTAL 51.000 0.000 153.338 217.338
56 44th Annual Report 2016-17
List of "New Projects" for FY 2016-17
Sl. Projects Item no. of Financial Project Planned Remarks No. Schedule-VII Progress Cost Expenses Target (%) in (in Rs. on New FY 2016-17 Lakhs) Projects of 2016-17 (In Rs. Lakhs) From To 1 Healthcare, Sanitation and Drinking Water projects i) Project Smile : Cleft lip New and Palate surgery for poor/ (i) 0 100 3.00 3.000 project downtrodden/needy patients ii) Providing a Hearse vehicle (Vehicle for carrying Coffin for New (i) 0 100 11.00 11.000 Funeral) to Local NGO/Society project of Ranchi iii) Providing medical care equipment / instruments in New mobile unit (Ambulance) of (i) 0 100 1.00 1.000 project Lutheran Health Care Society, Ranchi iv) Providing 2 nos. Mortuary New Refrigerator (Freezer Box) to (i) 0 100 1.00 1.000 project Local NGOs/Societies of Ranchi Sub-Total 16.00 16.00
2 Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects i) Providing play items to Rose New (ii) 0 100 2.00 2.000 Bud Preparatory School, Ranchi project ii) Providing Ceramic and Pottery unit for Skill development New (ii) 0 100 3.00 3.000 program at Ispat Mahila Vikas project Sahyog Samiti Ltd., Ranchi iii) Construction of an additional Classroom at Pramathanath New (ii) 0 100 3.00 3.000 Madhya Vidyalaya, Hinoo, project Ranchi Sub-Total 8.00 8.000 TOTAL 24.00
A house of engineering excellence ...aiming beyond 57 MECON Limited
Annexure - II of Appendix - II Manner (Details of the Project) in which the amount spent during the Financial Year 2016-17 (As on: 31.03.2017) 1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent Cumulative Amount Status of No. which the 1. Local area or Others outlay on the projects expenditure spent: the Project Project is 2. Specify the state and (Budget) or programmes upto the Direct or covered district Project or Sub-heads : reporting through (where projects or Programme 1.Direct period imple- programmes were wise expenditure menting undertaken) on projects or agency programmes 2.Overheads 1. Swachh Vidyalaya – Swachh Bharat Abhiyan – Construction of New Toilets/ Repair of Dis-functional Toilets in MHRD Schools i) Construction/Repair/Installation of Infrastructure 1) Ranchi district – 6 nos. 8,66,000 8,33,490 1,80,040 Direct 1) Work completed Toilets (53 nos.) : Development 2) Khunti district – 5 nos. (in FY 14-15) + for 53 nos. Toilets Programme Construction of New Toilets (11 3) Deoghar district – 6 nos. 46,22,850 a) Physical progress nos.) / Repair of dis-functional - Sanitation – 100% Programme 4 Hazaribagh district – 12 nos. (in FY 15-16)+ toilets (6 nos.)/ Installation of Pre- b) Financial progress 5) Lohardaga district – 24 nos. 8,33,490 fabricated Bio Toilets (36 nos.) – 98.31% and construction of borewells in (in FY 16-17) c) Bills under MHRD schools in Jharkhand (under = 56,36,380 scrutiny. Swachh Vidyalaya Abhiyan) (Carry-over project of FY 2015-16) [Project Cost : (Toilets + Borewells) : ` 57,33,000/-] Start date (SD) & Completion Date (CD) as per Work Order : • 2 nos. new toilets in Ranchi – 21.01.2015 (SD)/ 20.03.2015 (CD) (2 months) • 05 nos. new toilets in Khunti - 21.01.2015 (SD)/20.03.2015 (CD) (2 months) • 04.nos. new toilets in Deoghar - 03.02.2015(SD)/02.04.2015 (CD) (2 months) • 02 nos. dis-functional toilets in Deoghar & 04 nos dis- functional toilets in Ranchi - 24.04.2015(SD)/ 30.06.2015 (CD) (2 months 1 week) • 09 nos. Borewells in Lohardaga & Hazaribagh- 12.05.2015 (SD)/ 02.06.2015 (CD) (3 weeks) Sub-Total (1) 8,66,000 8,33,490 56,36,380
58 44th Annual Report 2016-17
1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent Cumulative Amount Status of No. which the 1. Local area or Others outlay on the projects expenditure spent: the Project Project is 2. Specify the state and (Budget) or programmes upto the Direct or covered district Project or Sub-heads : reporting through (where projects or Programme 1.Direct period imple- programmes were wise expenditure menting undertaken) on projects or agency programmes 2.Overheads 2. Rural Development Projects: i) Construction of 3 nos.Toilet complexes Infrastructure 1) Village Residential School 60,03,800 5,01,735 18,27,745 Direct 1) Village School – (Total Project cost: ` 1,60,34,715/-) Development (Pranavanand Vidya Mandir), (in FY 12-13) + Work completed. (Carry-over projects of FY 2012-13) Programme - Pancha– (14-seater toilet) 37,31,740 a) Physical progress Sanitation (in FY 13-14) + – 100% Start date: 08.03.2013 (LOI) Programme 2) Village – Pancha (10-seater 7,65,200 b) Financial progress Completion date: 07.09.2013 (6 months) toilet) (in FY 14-15) + – 75.53% (As per Work Order) 37,52,600 c) Final bill under 3) Village –Parsa Toli, Pancha (in FY 15-16)+ scrutiny. (10-seater toilet) 5,01,735 2) Vill.- Pancha – (in FY 16-17) Work completed. All the above in Block – = 1,05,79,020 a) Physical progress Bundu, – 100% Dist – Ranchi, State - b) Financial progress Jharkhand – 80.20% c) Final bill under scrutiny. 3) Vill – Parsa Toli a) Physical progress – 65.76% b) Financial progress – 44.19% c) Balance work: Plumbing, Sanitary, Electrics, Finishing, Solar PV System, etc. ii) Construction of 1 no.Toilet complex Infrastructure Village – Sungi, 10,30,280 23,895 7,95,590 Direct 1) Work completed (5-seater toilet) for Girls at Development Block – Karra (in FY 13-14) + a) Physical progress Orphanage Hostel (Anmol Basera) Programme Dist – Khunti, 9,92,240 – 100% (Project cost: ` 35,37,405/-) - State – Jharkhand (in FY 14-15) + b) Financial progress (Carry-over project of FY 2013-14) Sanitation 7,19,295 – 71.55% Programme (in FY 15-16)+ c) Bill of Solar Start date: 27.09.2013 23,895 PV System under Completion date: 26.03.2014 (in FY 16-17) scrutiny. (6months) = 25,31,020 d) Final bill under (As per Work Order) processing in Finance. iii) Construction of 1 no.Toilet Complex Infrastructure Village – Sungi, 21,77,435 7,64,150 11,53,045 Direct Work completed (5-seater toilet) for Boys at Orphanage Development Block – Karra (in FY 14-15) + a) Physical progress Hostel (Anmol Basera) Programme Dist – Khunti, 2,26,525 – 100% (Project cost: ` 35,57,005/-) - State - Jharkhand (in FY 15-16)+ b) Financial progress (Carry-over project of FY 2014-15) Sanitation 7,64,150 – 60.27% Programme (in FY 16-17) c) Final bill under Start date: 04.09.2014 = 21,43,720 scrutiny. Completion date: 03.03.2015 (6 months) (As per Work Order) iv) Augmentation of Anganwadi Centre in Infrastructure Village – Pancha, 2,20,000 2,18,685 2,18,685 Direct Work completed adopted village Development Block – Bundu, (in FY 16-17) a) Physical progress (Project cost : ` 2,18,686/-) Programme Dist - Ranchi – 100% (Carry-over Project of FY 2015-16) b) Financial progress – 100% Start date: 13.01.2016 Completion date: 12.03.2016 (2 months) (As per Work Order)
A house of engineering excellence ...aiming beyond 59 MECON Limited
1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent Cumulative Amount Status of No. which the 1. Local area or Others outlay on the projects expenditure spent: the Project Project is 2. Specify the state and (Budget) or programmes upto the Direct or covered district Project or Sub-heads : reporting through (where projects or Programme 1.Direct period imple- programmes were wise expenditure menting undertaken) on projects or agency programmes 2.Overheads v) Augmentation of infrastructure facilities Infrastructure Vikas Bharti, Research & Study 4,00,000 2,66,500 2,66,500 Direct Work completed at Livelihood Generation Centre in Development Centre, (in FY 16-17) a) Physical progress Ranchi Programme 19, Gramaytan, Arogya – 100% (Approved Project of FY 15-16) Bhawan-1, b) Financial progress (Project Cost : ` 3,82,051/-) Bariatu Road, Dist – Ranchi, – 69.75% Start date : 03.02.2016 State - Jharkhand c) Final bill under Completion date: 02.05.2016 (3 months) scrutiny. (As per Work Order)
vi) Construction of Classrooms (at Patel Infrastructure 1) Village-Sisour, Dist.-Gonda 1,93,000 -- 4,94,075 Direct 1) Work completed Gyan Vidya Peeth & Madarsa Ahle Development (1 No.) State – U.P. (in FY 12-13) + for Patel Gyan Sunnat) Programme – 2) Village-Raigaon, Dewariya 5,37,625 Vidya Peeth; Some (Project cost : ` 15,21,354/-) Construction Alawal, Dist-Gonda (1 No.) (in FY 13-14) + Electrical work, glass (Carry-over project of FY 2012-13) of Classrooms State – U.P. 2,03,840 fitting, floor repair, (in FY 14-15) painting of grill, Start date(SD) & Completion date (CD) =12,35,540 window & building, (As per Work Order) : etc. for Madarsa Ahle Sunnat is 1. Patel Gyan Vidyapeeth - 04.10.2012 pending. (SD)/ 1.03.2013 (CD) a) Physical progress 2. Madarsa Ahle Sunnat - 27.11.2012 – 100% (SD)/ 31.03.2013 (CD) b) Financial progress – 81.21% 2) Confirmation regarding completion of work awaited from villagers/ Gram Pradhan. vii) Construction of CC road (500m) Infrastructure Dumariadeeh, Vazirganj, 50,000 50,220 6,89,265 Direct 1) Work completed. (Project cost: `24,64,000/-) Development Dist.-Gonda, State - U.P. (in FY 12-13) + a) Physical progress (Carry-over project of FY 2012-13) Programme – 13,55,030 – 100% Construction (in FY 13-14) + b) Financial progress Start date: 05.06.2013 of Road 1,73,305 – 100% Completion date: 04.10.2013 (4 months) (in FY 14-15) (As per Work Order) 50,220 (in FY 16-17) = 22,67,820 viii) Construction of Akhra and construction Infrastructure Village-Pandu Toli, Nagri, 2,98,130 2,98,130 2,98,130 Direct 1) Work completed. of Roof slab & finishing work of Development Dist.-Ranchi, State - Jharkhand (in FY 16-17) a) Physical progress Community building in adopted village Programme – – 100% (Project cost : ` 2,98,130/-) Construction b) Financial progress (Carry-over project of FY 2014-15) of Akhra – 100% & Repair of Start date: 18.02.2015 Community Completion date: 17.04.2015 (2 months) Building (As per Work Order) Sub-Total (2) 1,03,72,645 21,23,315 1,95,40,435
60 44th Annual Report 2016-17
1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent Cumulative Amount Status of No. which the 1. Local area or Others outlay on the projects expenditure spent: the Project Project is 2. Specify the state and (Budget) or programmes upto the Direct or covered district Project or Sub-heads : reporting through (where projects or Programme 1.Direct period imple- programmes were wise expenditure menting undertaken) on projects or agency programmes 2.Overheads 3. Preventive Healthcare and Drinking Water projects
i) Health camps in Mobile Ambulance Community i) Mobile Health camps with a 8,00,000 7,77,170 7,77,170 Direct 1) Regular on-going Van with a team of doctors, Healthcare team of doctors, paramedical (in FY 16-17) project paramedical staff etc. alongwith staff etc. alongwith medicine a) Physical progress medicine for free health check-up & for free health check-up & – 100% medicines were given to the poor & medicines were given to the b) Financial progress needy patients poor & needy patients at CSR – 100% Pavilion, Pundag, Boreya Kanke, Jagannathpur, Ganyor 2) No. of Health Toli Hatia, Pundag, Bariatu, Camps : 77 Vill - Pandu Toli, Nagri,, Vill No. of Patients: – Deouri/ Pundidiri, Tamar; Around 5,260 Vill – Rupru, Angara, Vill – patients Pahar Singh Birhore, Angara; Vill – Kherwa kocha, Angara in Ranchi District; Vill – Rai, Vill – Sungi & Vill – Bingaon in Khunti district and Vill – Barki Champi in Lohardaga district of Jharkhand ii) Project Smile : Cleft Lip and Palate Community Akila Bharatha Mahila 3,00,000 3,00,000 3,00,000 Direct 1) Work completed. Surgery for poor/downtrodden/needy Healthcare Seva Samaja, Koramangala, (in FY 16-17) a) Physical progress– Patients Bangalore, State - Karnataka 100% b) Financial progress – 100% Sub-Total (3) 11,00,000 10,77,170 10,77,170 4. Education, Employment Enhancing Vocational Skills and Livelihood Enhancement projects i) Free Literacy programme for the under Community Irgoo Toli (2 nos.), Argora, 1) Regular on-going privileged children at 13 Community Education Jaganathpur, Ravidas project Education Centres Scheme Mohalla, Kusai, Pathar a) Physical progress Kocha, Pokhar Toli, Ganyor – 100% • Honorarium to teachers Toli, Bharam Toli; Vill – 3,43,200 3,12,000 3,12,000 Direct b) Financial progress Oberia, Hatia; Vill. – Rupru, (in FY 16-17) – 100% • Dress/Uniform for children of Angara Block of Ranchi Education centres District & Vill. – Rai of 90,000 1,58,190 1,58,190 Direct Khunti district of Jharkhand. (in FY 16-17) ii) Free Stitching training for under Women Mani Tola, Doranda Urdu 1) Regular on-going privileged women at 10 stitching Centres Empowerment Library, Hinoo, Argora, project Scheme Pathar Kocha, Kishoreganj, a) Physical progress • Honorarium to teachers (Employment/ and Jagannathpur; 2,64,000 2,20,000 2,20,000 – 100% Livelihood Vill-Pancha, Bundu, (in FY 16-17) b) Financial progress • Purchase of stitching materials for Enhancing Vill-Kuchhu, Ormanjhi Direct – 100% providing to the students for practice Vocational in Ranchi District & Vill – 75,000 - - stitching Skills) Sungi of Khunti district of Jharkhand. • Annual Examination (2014-15 batch) 33,300 33,300 Direct (in FY 16-17) • Annual Examination (2015-16 batch) 38,340 38,340 Direct • Annual Examination (2016-17 batch) (in FY 16-17) 85,000 26,750 26,750 Direct (in FY 16-17)
A house of engineering excellence ...aiming beyond 61 MECON Limited
1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent Cumulative Amount Status of No. which the 1. Local area or Others outlay on the projects expenditure spent: the Project Project is 2. Specify the state and (Budget) or programmes upto the Direct or covered district Project or Sub-heads : reporting through (where projects or Programme 1.Direct period imple- programmes were wise expenditure menting undertaken) on projects or agency programmes 2.Overheads iii) Vocational Training in the field of Radio Vocational VTI, Dist – Ranchi 1) Regular on-going & TV technician, Electrical technician, Training State - Jharkhand project Welding technology, Computer Scheme a) Physical progress Applications (Employment/ – 100% Livelihood b) Financial progress Enhancing 1,94,820 46,200 46,200 Direct – 100% • Honorarium to staff members Vocational (in FY 16-17) Skills) iv) Construction of Office cum-Training & Projects for Brajkishore Netraheen Balika 1,23,500 1,23,500 12,35,000 Direct 1) Work completed Dormitory Building for Blind Girls “Divyang” Vidyalaya, Bargain, (in FY 12-13) + a) Physical progress (Project cost: ` 24,70,000/-) Dist – Ranchi, 8,64,500 – 100% (Carry-over project of FY 2012-13) State - Jharkhand (in FY 13-14) + b) Financial progress 2,47,000 – 100% Start date: 29.06.2012 (in FY 14-15)+ Completion date: 28.12.2012 (6 months) 1,23,500 (As per Work Order) (in FY 16-17) = 24,70,000 v) Construction of Dormitory at 2nd floor for Projects for Brajkishore Netraheen Balika 87,000 86,915 18,90,730 Direct 1) Work completed Blind Girls “Divyang” Vidyalaya, Bargain, Dist – (in FY 15-16)+ a) Physical progress (Project cost : ` 19,77,649/-) Ranchi, State - Jharkhand 86,915 – 100% (Carry-over project of FY 2014-15) (in FY 16-17) b) Financial progress =19,77,645 – 100% Start date: 31.08.2015 Completion date: 30.12.2015 (4 months) (As per Work Order) vi) Providing play items to Government Promoting Middle School, Vill – Nagri, 13,170 13,170 Direct 1) Work completed Schools of Jharkhand (Vidyalaya Chalen Education Ranchi a) Physical progress Abhiyan) – 100% (Project cost : ` 50,000/-) b) Financial progress (Carry-over project of FY 2015-16) – 100% c) Balance fund : Start date: 02.01.2016 ` 36,830/- Completion date: 09.01.2016 (7 days) (As per Work Order) vii) Construction of one no. additional Class Promoting Pramathanath Middle School, 4,00,000 1,77,700 1,77,700 Work completed Room Education Hinoo, Ranchi ( in FY 16-17) a) Physical progress (Project cost: ` 3,94,885) – 100% b) Financial progress – 45% Sub-Total (4) 16,62,520 12,36,065 54,73,295 5. Training to promote Rural Sports/ Promotion & Development of Traditional Arts i) Tribal Folk and Traditional Painting Promoting Jawaharlal Nehru Kala Kendra, 49,300 49,300 Direct Work completed in Camp Traditional District-Ranchi, State - (in FY 16-17) FY 15-16 (Carry-Over Project of FY 2015-16) Arts Jharkhand a) Physical progress – 100% b) Financial progress – 100% Sub-Total (5) 49,300 49,300
62 44th Annual Report 2016-17
1 2 3 4 5 6 7 8 9 Sl. CSR Projects or activity identified Sector in Projects or Programmes Amount Amount spent Cumulative Amount Status of No. which the 1. Local area or Others outlay on the projects expenditure spent: the Project Project is 2. Specify the state and (Budget) or programmes upto the Direct or covered district Project or Sub-heads : reporting through (where projects or Programme 1.Direct period imple- programmes were wise expenditure menting undertaken) on projects or agency programmes 2.Overheads 6. Other activities/Miscellaneous programs i) Construction of Community Centre Infrastructure Akbarpur, Dist.-Kanpur Dehat, 33,86,385 6,62,930 6,11,370 Direct Construction work (Project cost: ` 40,55,000) Development State – U.P (in FY 13-14) under progress (Carry-over project of FY 2013-14) Programme + 57,450 a) Work done upto (in FY 15-16)+ Roof level. Start date: 07.06.2013 6,62,930 b) Physical progress Completion date: 06.04.2014 (10 months) (in FY 16-17) – 61.79% (As per work order) = 13,31,750 c) Financial progress – 32.84% d) Bills awaited. e) Balance work: Doors, Stair’s Railing, Plumbing, Sanitary, Plastering, Roofing, Electrical, Painting, Septic tank, Soak Pit, Boundary wall, Gate, etc. ii) Miscellaneous Expenses 14,24,200 7,48,335 7,48,335 Direct (Tour, local tours, Transport, Engagement (in FY 16-17) of Photographer & Messenger, etc.) Sub-Total (6) 48,10,585 14,11,265 20,80,085 Grand Total 1,88,11,750 67,30,605
A house of engineering excellence ...aiming beyond 63 MECON Limited
Annexure – I
TECHNOLOGY ABSORPTION
I. Indigenously developed Technology Sl. Efforts made towards technology Benefits derived like product improvement, cost reduction, No absorption. product development. 1. Design Development of 4,250 m3 Blast Large Blast Furnace technologies in the country have been Furnace (Loha) coming from international sources causing dependency on foreign suppliers and resulting in loss of foreign exchange. Under the aegis of Governments flagship “Make in India” program, MECON is capable of complete design & engineering of 4,250 m3 Blast Furnace, entirely based on indigenous technology acquired over the years, vast in-house database and know-how. 2. Improved 1.0 MTPA Coke Oven It is development of 1 MTPA top charged Recovery type CO Battery with 49.8 m3 hot oven volume Battery of useful volume 49.8 m3 production & 7m. height. (ANGARA 7.1) Advantage of this type of Battery is Increase in productivity Production of Coke by utilizing less space & energy. Less pollution
3. Design development of 1.2 Mt/yr Pellet Cost effectiveness with MECON’s 1.2 MTPA pellet plant Plant module w.r.t. the same of global competitors 4. MECON Designed 5.0 M. Tall Coke Oven The features are:- Batteries Oven roof sliding joint between Silica & Fireclay (between 59th course & 60th course) Sets of auxiliary springs for preventing dragging of fireclay over expanding silica Provision of SS foil at oven roof (between 62nd & 63rd) course to prevent gas leakage & reduce heat loss at oven roof zone Provision of SS foil at re-generator face between bulk head and insulation brick Provision of catenaries for trolley line of changing car & DE car 5. Design optimization of NEST IN roof NEST IN is a light gauge steel frame construction solution, structure with cold formed Steel section made of cold rolled high strength galvanized steel. The construction is thermally insulated by means of insulation between the internal and external rendering made of cement particle boards. The steel used in the house is 100% recyclable. The construction process is also almost dry and does not waste resources or pollute the environment to the extent the conventional methods do.
64 44th Annual Report 2016-17
Sl. Efforts made towards technology Benefits derived like product improvement, cost reduction, No absorption. product development.
6. Development of LabVIEW based This device has simple setup and portability. The system can temperature scanner. (Internal MoU be utilized in a variety of ways for multichannel temperature Project for year 2016-17) sensing with the help of thermocouples. The temperature data also be stored in date & year wise format and can be retrieved any time for analysis. The current design can also be modified to build a temperature controller. 7. Indigenous portable ozone monitoring The benefit of the project is that the developed portable system system for measurement of real time will continuously monitor and record the data of ground level ozone concentration in and around ozone concentration at desired location with minimum efforts industrial area of Ranchi. (Internal MoU and arrangements. Project for year 2016-17)
Expenditure incurred on Indigenously Total expenditure incurred on R&D during the Financial developed Technology through own R&D Year 2016-17 amounts to `183.08 Lakh.
II. Imported Technology Sl. Efforts made towards technology Benefits derived like product improvement, cost reduction, No absorption. product development.
1. MOU signed with CSM, Italy for Basic guidelines for process technology has been obtained technology transfer for production of Cold from CSM Italy. However, patent and IP is aimed for CRGO Rolled Grain Oriented (CRGO) product of production by NML & consortium scientist. higher quality in the year 2015. Electrical Steels, both CRNO and The Technology so far absorbed is limited to the report CRGO are amongst premium earning preparation. and technology oriented products. The - First phase limited only for DPR preparation. The DPR technology for production of CRGO approval is under progress by the respective consortium steel is not readily available as only members. a handful of manufacturers produce - Second phase is related to implementation phase which CRGO The production technology is shall start after DPR approval. closely guarded, ‘IP’ protected and not accessible.
Total expenditure booked by the Company on import of technology during the start of the Project. (` in Lakh) Expenditure incurred on Imported Technology F.Y 2015-16 F.Y 2016-17 ` 136.47 ` 38.32
A house of engineering excellence ...aiming beyond 65 MECON Limited
Annexure – II
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
1.0 INTRODUCTION It has been a rigorous voyage spanning over five decades positioning MECON as a formidable centre bearing core competence in providing know-how, engineering & consultancy services to Metals sector. The competence so acquired has been further consolidated through continuous upgradation and augmentation of engineering skill through technical collaborations with industry doyens. In order to overcome the perils of the cyclical pattern of Iron & Steel sector business, the company strategized to strengthen its operations in non-core business area e.g. Energy & Infrastructure. Transcendence of operation from its core competence area to areas like Energy & Infrastructure sector has been seamless, thanks to the preparedness built through the past decades. Company is also focusing its operation for delivering projects through EPC mode, in addition to its conventional portfolio of Consultancy & Project Management Services for improving its top and bottom lines. In view of the opportunities thrown up by the Governmental initiative for inclusive growth through endeavours like National Steel Policy, Infrastructure development including health sector, PFA 24x7, MoEF stipulations on environmental norms etc., the company has initiated efforts for translating these opportunities to meaningful business. The exposure gained over 50 years in steel sector has helped the company to strengthen further on various facets of engineering discipline and is expected to generate dividends through the recent endeavours and also contribute to the engineering prowess while maintaining core competence in Iron & Steel sector.
2.0 SWOT Analysis Strengths Core competence in the area of Metals and capability in providing end-to-end solutions, including Integrated Project Management in Greenfield/brown-field projects of various magnitudes Consultancy, Design and Detailed Engineering capabilities in our functional business areas Capability in equipment & system design and supply & execution in Ferrous area Multi-disciplinary highly experienced and capable pool of engineers/technologists in various specialized technical disciplines Vast knowledge repository and reference materials Strategic Tie-ups for business competitiveness and better market penetration Good credentials with financial institutions and regulating authorities Low average age of employees due to induction of young professionals Wide network of offices at various locations across the country Capability in environmental impact assessment & environmental management plans In-house Environmental Engg. Laboratory which is recognized under Environment Protection Act, 1986 renders its services for sampling, testing & analysis of air, water, noise, sewage and soil quality
66 44th Annual Report 2016-17
to various Plants in Steel and other Sectors both in private and public. Initiatives have been taken to modernize and expand Environmental Engineering Laboratory by installing sophisticated instruments. NABET/ QCI Accreditation for 16 sectors includes Mining, Onshore & offshore oil & gas exploration, River valley and hydel projects, Thermal power plants, Coal washeries, Mineral Beneficiation, Metallurgical industries, Cement Plant, Coke Oven Plants, Oil & Gas transportation Pipelines, Isolated Storage, Ship Breaking Yard, Industrial Estate, Ports & Harbour, Highways & railways, Area Development & Township Projects.
Weaknesses High manpower & overhead costs as compared to some of the competitors, especially in private sector. Skewed organization structure with sparsely manned middle level manpower. Depletion of critical knowledge / skills on account of superannuation / separation of experienced manpower. Moderate commercial acumen in technical departments.
Opportunities Anticipated future investments in mining, beneficiation, agglomeration / pelletisation, slurry transportation and coal washeries. Possible future investment in Steel sector in view of the National Mission of 300 MT Crude Steel Capacity by 2030-31. Large scale investments in other diversified sectors viz. oil & gas, infrastructure & strategic sectors and power transmission & distribution & renewable energy sector Leveraging past experience in defence sector to harness new opportunities emanating with the opening of Defence Production Manufacturing sector for participation of private sector (FDI hiked to 49%). Expansion in ports, power and mining sector are expected to offer associated Material Handling Projects and your Company expects to generate business from this sector, both on its own credentials and also through joint participation with other Companies. Rapid urbanization and Governmental policy thrust for provision of drinking water facilities in urban areas offers another business opportunity. In the past, your Company has carried out engineering of a large number of in-plant water supply projects and has also made in-roads in infrastructure water supply projects. As such, business opportunity exists in the area of inter-city drinking water supply, Urban Water Supply, Water Treatment and Sewage Disposal projects. Growing business opportunities in Environment Management Development in sectors such as Green technologies, nuclear power, water management, slurry & water pipelines, sea water desalination plants, LNG terminals etc.
Threats Mushrooming of consultancy companies operating at low margins. Presence of Indian set-up of all major Multi-national companies like SMS, Siemens, Danielli, Kobe Steel, etc providing comprehensive services including Engineering
A house of engineering excellence ...aiming beyond 67 MECON Limited
Private sector, in particular, opting for engineered packages from the turnkey suppliers, without engagement of external consultants Stringent technical pre-qualification criteria for consultancy as well as supply jobs Recent decline in investment in the core area of Metals but continued dependence on Metals sector Uneven playing ground for public & private sectors Today’s consortium partners emerge as future Competitors.
3.0 BUSINESS OUTLOOK Global Economic Outlook The world economy gained momentum in the fourth quarter of 2016 which is expected to persist. With buoyant financial markets and a long-awaited cyclical recovery in manufacturing and trade under way, world growth is projected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018. Stronger activity, expectations of more robust global demand, reduced deflationary pressures, and optimistic financial markets are all upside developments. But structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside, especially over the medium term, remain important challenges. The outlook for advanced economies has improved primarily driven by higher projected growth in the United States, where activity was held back in 2016 by inventory adjustment and weak investment. The improved growth reflects the assumed fiscal policy easing and an uptick in confidence, especially after the November elections, which, if it persists, will reinforce the cyclical momentum. Since the U.S. election, expectations of looser fiscal policy in the United States have contributed to a stronger dollar and higher U.S. Treasury interest rates, pushing up yields elsewhere as well. Market sentiment has generally been strong, with notable gains in equity markets in both advanced and emerging market economies. Stronger activity and expectations of more robust global demand going forward, coupled with agreed restrictions on oil supply, have helped commodity prices recover from their troughs of early 2016. Headline inflation has been picking up in advanced economies due to higher commodity prices, but core inflation dynamics remain subdued and heterogeneous (consistent with diversity in output gaps). Core inflation has improved little where it had been the weakest (for instance, in Japan and parts of the euro area). The outlook has also improved for Europe and Japan based on a cyclical recovery in global manufacturing and trade that started in the second half of 2016. Growth prospects for emerging market and developing economies have marginally worsened due to weaker outlook in several large economies, especially in Latin America and the Middle East, reflecting continued adjustment to the decline in their terms of trade in recent years, oil production cuts, and idiosyncratic factors. The 2017 and 2018 growth forecasts have been marked up for China, reflecting stronger-than-expected policy support, as well as for Russia, where activity appears to have bottomed out and higher oil prices bolster the recovery. Headline inflation has also picked up in many emerging market and developing economies due to higher commodity prices, but in a number of cases it has receded as pass-through from the sharp currency depreciations in 2015 and early 2016 continues to fade. However, there are many downside risks especially over the medium term. The protectionism measures adopted in many countries are acting as structural obstacle to a stronger global recovery and
68 44th Annual Report 2016-17
growth caused by reduced trade and cross-border investment flows. The hike in interest rates in the USA could trigger a rapid tightening in global financial conditions and a sharp dollar appreciation, with adverse impact on vulnerable economies including parts of the euro area. Some emerging market economies, may undertake rollback of financial regulation, which could spur excessive risk taking and increase the likelihood of future financial crises. The increasing vulnerabilities in China’s financial system associated with fast credit growth may lead to financial tightening in emerging market economies. High levels of excess capacity in some advanced economies as well as continued balance sheet weaknesses in some emerging market economies are also some of the key concerns. Policy choices will therefore be crucial in shaping the outlook and reducing risks. Priorities for macroeconomic demand management are increasingly differentiated, given the diversity in cyclical positions. In economies with slack and persistently weak core inflation, cyclical demand support remains necessary, including to stave off pernicious hysteresis effects. In economies where output is close to or above potential, fiscal policy should aim at strengthening safety nets and increasing potential output. At the same time, credible strategies are needed in many countries to place public debt on a sustainable path. Following a lackluster recovery from the global financial crisis, and in the aftermath of the sharp adjustment of global commodity prices, many economies are seeking to enhance growth potential, inclusiveness, and resilience. Actions to bolster potential output are indeed urgent given persistent headwinds from population aging in advanced economies, the ongoing adjustment to lower terms of trade and the need to address financial vulnerabilities in emerging market and developing economies, as well as sluggish total factor productivity growth in both groups. Technological change has been the dominant driver of the labour share in advanced economies whereas trade integration (and the attendant increase in the capital intensity of production) has been the dominant driver in the case of emerging market economies. These findings highlight the need to make growth more inclusive. Possible policy levers include more progressive taxation; investments in skills, lifelong learning, and high-quality education; and other efforts to enhance the occupational and geographical mobility of workers to ease and hasten labour market adjustments to structural transformations. Many of the challenges that the global economy confronts call for individual country actions to be supported by multilateral cooperation. Key areas for collective action include preserving an open trading system, safeguarding global financial stability, achieving equitable tax systems, continuing to support low income countries as they pursue their development goals, and mitigating and adapting to climate change
Indian Economy & Steel Sector Following liberalization, the Indian economy is also integrated with the global economy. As such, both global and domestic developments are influencing the growth of the Indian economy. Against the backdrop of robust macro-economic stability, the year 2016-17 was marked by two major domestic policy developments, the passage of the Constitutional amendment, paving the way for implementing the transformational Goods and Services Tax (GST), and the action to demonetize the two highest denomination notes. The GST will create a common Indian market, improve tax compliance and governance, and boost investment and growth. Demonetization has had short-term costs but holds the potential for long term benefits. Follow-up actions to minimize the costs and maximise the benefits include: fast, demand-driven, remonetization; further tax reforms, including
A house of engineering excellence ...aiming beyond 69 MECON Limited
bringing land and real estate into the GST, reducing tax rates and stamp duties; and acting to allay anxieties about over-zealous tax administration. These actions would allow growth to return to trend in 2017-18, following a temporary decline in 2016-17. With the fillip provided by the country’s policy mechanism thrusts backed by a strong economic foundation, a rising domestic supply side, stable end-use segments, large scale infrastructure investments and optimistic economic projections, future prospect of Indian economy appears to be bright. Moreover, Government of India has given special thrust on the industry and infrastructure sector as a whole by the ambitious “MAKE IN INDIA” programme which is likely to put thrust on infrastructure / industrial development and hence, huge investment is expected in sectors like steel, power, roads, railways, ports, civil aviation, telecommunications, irrigation, drinking water, sanitation, storage & warehousing etc. This will help in achieving a robust and inclusive growth in future. Industrial growth measured by Index Number of Industrial Production (INIP) has shown no recovery in April-January, 2016-17 (stagnated at -0.2%) compared to the same period during 2015-16. Within industry, electricity sector performed better with a growth of 7.1% during April-January, 2016-17. Consumer durable grew by 0.7% during April-January, 2016-17. The manufacturing sector as a whole remains the cause of worry for the economy. On the front of industrial production during April-January, 2016-17, coal production grew by 5.1% and cement production grew by 7.4%. Fertilizer sector has shown substantial improvement registering a growth of 8.6%. Major sectors like steel, crude oil, natural gas, etc have shown low or negative growth of production. Crude steel production reached at 97.443 Mt in April-March, 2016-17 registering growth of 8.5 % compared to same period of previous year. Post imposition of Minimum Import Price (MIP) on select steel products in Feb, 2016, imports declined substantially by 38.3% while exports increased by 102.1%, thus making India net exporter of steel. Production of pig iron declined to 9.968 Mt during April-March, 2016-17 with a decline of 2.7% compared to the same period of previous year. The Company’s business procurement in diversified sector has shown an improvement whereas it was moderate in its core area of Ferrous and Non-Ferrous sectors. As Indian economy gather momentum in 2017-18 and this trend is likely to continue in future as per forecasts, the business procurement prospect for the company is expected to be encouraging in the forthcoming year 2017-18. BUSINESS PROCUREMENT Total ` in Crore 2015-16 2016-17 SBU Consultancy EPC SBU Consultancy EPC Metal 78.78 72.18 Metal 96.70 539.00 Power 49.52 46.86 Energy 207.09 6.57 Oil & Gas 68.05 Nil Infrastructure 39.50 529.80 Infrastructure 139.53 228.48 Total (`) 335.88 347.52 Total (`) 343.29 1075.37 Grand Total (`) 683.40 Grand Total (`) 1418.65
70 44th Annual Report 2016-17
4.0. INTERNAL CONTROL SYSTEM AND ADEQUACY THEREOF MECON LIMITED 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:
Well defined delegation of power with sanctioning limits for purchasing of capital items and approving of revenue expenditure. Well framed policies on capital asset procurement. Well planned budget for capital & revenue expenditure and continuous monitoring. 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. Well framed MECON Establishment Manual and Service Rules to codify rules and policies governing service conditions of employees. Well codified Apex Quality Manual for ensuring quality of services provided and goods sold for executing EPC jobs. Periodical meeting at all functional levels and also at corporate level for reviewing and achieving the targeted results. 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. Well defined plan to invest surplus fund most judicially and reporting thereof to the Apex management regularly. The company has an extensive programme of carrying out internal audits, management and financial reviews to ensure greater efficiency, transparency and accountability. 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.
5.0 DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the Financial Year 2016-17, MECON LIMITED achieved Turnover of ` 34,292.91 lakh. Turnover from Consultancy Jobs is ` 26,176.23 lakh, mainly from execution of consultancy order for NMDC, different Steel Plants of SAIL, etc. Turnover from Consultancy Jobs constituted 76.33%
A house of engineering excellence ...aiming beyond 71 MECON Limited
of the total turnover and turnover from Turnkey Projects constituted 23.67% of total turnover. Total turnover has increased by 8.09% over the previous year. Loss after tax for the year 2016-17 is `8,384.35 lakh compared to Loss after tax of `16,241.38 lakh of the previous year. Interest and Finance Costs is decreased by `34.66 lakh. During the Financial Year 2016-17, the company has earned interest of `4,419.22 lakh through term deposits with scheduled banks. The highlights of financial performance of the company for the financial year 2016-17 w.r.t. 2015- 16 are mentioned below. (` in Lakhs) Sl. FY FY Particulars No. 2016-17 2015-16 a) Turnover 34,292.91 31,727.69 b) Interest from Bank 4,419.22 5,609.11 c) Employee Benefit Expenses 29,178.33 31,076.63 d) Purchase of Equipments & Direct Expenses 11,345.53 14,764.04 e) Other Expenses 7,670.02 10,780.53 f) Loss Before Tax 8,814.26 17,470.48 g) Loss After Tax 8,384.35 16,241.38 h) Fixed Assets including capital work in progress (Gross Block) 17,056.83 17,859.74 i) Cash and Bank Balances 55,043.09 53,943.71 j) Job-in-Progress 613.56 741.27 k) Trade Receivables (Current & Non Current) 28,285.05 24,708.22 l) Trade Payables (Current & Non Current) 20,012.16 17,564.05 m) Loans and Advances(Current & Non Current) 15,435.38 12,864.09 n) Other Assets & investment (Current & Non Current) 7,735.44 14,184.93 o) Other Liabilities & Borrowings (Current & Non Current) 80,199.76 72,483.35 p) Net Worth 15,137.35 23,521.70 q) Share Capital 4,013.84 4,013.84 r) Capital Employed 9,528.65 18,123.57
Greater proportion of consultancy turnover out of total turnover has contributed to improve the financial performance of the company. Beside, reduction in employee benefit expenses by `1898.30 lakh and reduction in other expenses by `3110.51 lakh have contributed to improve the position as well. The Net Worth of the company has reduced by `8,384.35 lakh compared to previous year.
72 44th Annual Report 2016-17
6.0 HUMAN RESOURCE DEVELOPMENT In a knowledge based company Services, Processes and Business Models can be copied, but the organizational competence i.e. the Human Capital is unique in nature. In view of this the management lays emphasis to focus and sustain a competent and highly responsive workforce with adequate domain expertise. Accordingly it has organized training towards Performance Management, Career Advancement through multiple role exposures and Knowledge Management framework. Further projects being the centre of our delivery mechanism, management arranged workshops and trainings on selection of Technology & Product Mix, Methodology of Contract Closure and Risk Analysis & Mitigation in Projects. To bring about an overall development of our future leaders, to enable them to unleash potential for necessary business impact along with technical capabilities augmentation, management organized training in Soft Skills, Personality and Leadership Development. Regular Knowledge Management sessions are also conducted to effectively disseminate and utilize organizational knowledge. Management always strives to focus towards development of its employees with the objective that they will lead the company through challenging environment and ensure that sustained value creation is achieved. With this objective lot of HRD activities were undertaken in the FY 2016-17 as detailed in Directors’ Report. Management has achieved 1776 Man days of training and development as against the target of 1300 Man days fixed for this financial year.
7.0 TECHNOLOGICAL UP-GRADATION Technological and Engineering excellence achieved through continuous process of acquiring, absorbing and innovating state-of-the-art technology constitutes the core strength of MECON. Direct transfer of technology through participation in projects in association with industry leaders has remained a consistent source of knowledge up-gradation. License agreements and general collaboration/ cooperation agreements with organisations sharing common business interests is providing an impetus for MECON to achieve a win-win situation. Such initiatives are complementing knowledge acquisition in addition to building-up database for focussed business areas with the aim to bridge the identified technology gap. Measures adopted to work towards technology self reliance include: i) Exposure to global technology and tie-up in potential areas. ii) Need based empanelment of experts. iii) Recruitment of experienced personnel. iv) In-house engineering Research & Development. v) Access to modern tools for analysis, design, drafting and inspection. vi) Training – both in-house and outside. vii) Cost effective operations achieved through higher reliance on state-of-the-art software tools. viii) Enhancing productivity, timely completion of projects and with better quality.
8.0 CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY DEVELOPMENT (CSR & sd) MECON has undertaken a number of projects / activities as a part of its Corporate Social Responsibility & Sustainability under its CSR & Sustainability Policy. The details of the project / activities taken up during 2016-17 are given under Director’s Report.
A house of engineering excellence ...aiming beyond 73 MECON Limited
The Management of the 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 Centre, free stitching training under Women Empowerment Scheme, Vocational training under Vocational Training Scheme, free health camp 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 as per Act.
74 44th Annual Report 2016-17
Annexure - III
REPORT ON 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. MECON 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. Sanctioned Actual position as Particulars of Directors No. Strength on 31.03.2017 i. Functional Directors including CMD (WTD) 5 4 ii. Part-time Government Directors 2 2 iii. Part-time Independent Directors 3 1* Total 10 7
(*) The sanctioned strength of Part-time Independent Director on the Board of the Company is three (3). One Part-time Independent Director was appointed by the Government of India during F.Y 2015-16. The balance two (2) posts of Part-time Independent Director are lying vacant since January, 2014
2.1 Terms & Conditions of appointment of Board Member : The terms, conditions and tenure of appointment of all Board Members is decided by the Government of India, Ministry of Steel.
A house of engineering excellence ...aiming beyond 75 MECON Limited
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 the Part-time Government Directors and Part-time Independent Directors for attending the meetings. Part-time Government Directors are not paid any remuneration. The Part-time Independent Directors are paid sitting fees of ` 10,000/- per meeting of the Board / Committee attended by them. The details of sitting fees paid to the Part-time Independent Director during FY 2016-17 are as follows.
Name of Director Sitting Fees (`) Total (`) (Shri) Board Meeting Committee Meetings
Sisir Kumar Appikatla 50,000 60,000 1,10,000
2.3 Board Meetings: The Board meets statutorily and also as many times as may be warranted. The Board Meetings are convened as 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 Board of Directors oversees all major actions proposed to be taken by the Company. The Board also reviews and approves the strategic and business plans including monitoring corporate performance. The Board and Committee Meetings are held not only at Company’s Registered Office at Ranchi, but also at its Engineering Office at New Delhi. The Company Secretary acts as the Secretary to the Board Meetings.
2.4 Number of Board Meetings: During the year 2016-17, Five (5) Meetings were held, the details of which are given below:
Sl. No. Date of Meeting Board Strength Number of Directors Present 1 04.07.2016 8 8 2 23.08.2016 8 7 3 26.09.2016 8 8 4 28.11.2016 7 7 5 22.02.2017 6 6
76 44th Annual Report 2016-17
Particulars of the Directors including their attendance at the Board Meetings from 1st April, 2016 to 31st March, 2017.
Name of Directors No. of Board No. of Board Meetings held. Meetings attended. I Whole time Directors 1. Shri A.K. Tyagi Three Three Chairman–cum-Managing Director (upto 30.09.2016)
2. Shri Atul Bhatt Tw o Tw o Chairman and Managing Director (w.e.f. 01.10.2016)
3. Shri S. Chattopadhyay Director (Project) Five Five 4. Shri. Deepak Dutta Three Three Director (Commercial) (Upto 31.10.2016)
5. Shri S.R. Sengupta Four Four Director(Technology) (Upto 31.12.2016)
6. Shri A.P. Singh Four Four Director (Engineering) (Upto 31.12.2016)
7. Shri P.K. Sarangi One One Director (Technical) (w.e.f. 01.01.2017)
II. Part-time Government Directors 1. Smt Bharathi S. Sihag, IAS Four Three SS&FA to the Govt. of India, Ministry of Steel. (Upto 30.11.2016)
2. Shri Saraswati Prasad, IAS One One AS&FA to the Govt. of India, Ministry of Steel. (w.e.f. 08.02.2017)
3. Shri Syedain Abbasi, IAS Five Five Joint Secretary to the Govt. of India, Ministry of Steel. III. Part-time Independent Director 1. Shri Sisir Kumar Appikatla Five Five
A house of engineering excellence ...aiming beyond 77 MECON Limited
3.0 BOARD COMMITTEES:
3.1 Audit Committee The Audit Committee in place as on 31.03.2017 consists of one Part-time Government Director, one Part-time Independent Director and one whole-time Director. The Chairman of the Audit Committee is a Part-time Government Director. The Audit Committee as on 31.03.2017 comprises of the following Directors. Members of the Audit Committee as on 31.03.2017 are :- Sl.No. Name of Directors (Shri) Status in Audit Committee 1 Syedain Abbasi, IAS, Director and Joint Secretary to Govt. of Chairman India, Ministry of Steel. 2 Sisir Kumar Appikatla, Director Member 3 Subir Chattopadhyay, Director (Project) Member
Role and Powers of the Audit Committee. The role and powers of the Audit Committee are as per Section 177 of the Companies Act, 2013 as well as the Guidelines on Corporate Governance for CPSE issued by the Govt. of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises. The Company Secretary acts as the Secretary to the Audit Committee.
Number of Audit Committee Meetings. During the year 2016-17, Five (5) Meetings were held, the details of which are given below:
Sl.No Date of Meeting Member’s Strength No. of Members Present 1 04.07.2016 Three Three 2 26.09.2016 Three Three 3 28.11.2016 Three Three 4 07.12.2016 Three Three 5 22.02.2017 Three Three
Particulars of the Directors including their attendance at the Audit Committee Meetings from 1st April, 2016 to 31st March, 2017. Name of Directors Period No. of Audit No. of Audit Committee Committee Meetings held. Meetings attended. Shri Syedain Abbasi, IAS, 05.04.2016 to Five Five Director & Chairman, Audit Committee. 31.03.2017 Shri Sisir Kumar Appikatla, 01.04.2016 to Five Five Director & Member, Audit Committee. 31.03.2017 Shri S. Chattopadhyay 01.04.2016 to Five Five Director (Project) & Member, Audit Committee. 31.03.2017
78 44th Annual Report 2016-17
3.2 Remuneration Committee The Remuneration Committee was earlier constituted with three Part-time Independent Directors. The Chairman of the Remuneration Committee was Part-time Independent Director. The tenure of appointment of all the Part-time Independent Directors was completed in January, 2014. Since then only one Part-time Independent Director was appointed by the Government of India. The reconstitution of Remuneration Committee is to be considered on appointment of other two Part-time Independent Directors.
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 for CPSEs issued by the Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises which came into force w.e.f. 01.04.2014, 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 as on 31.03.2017 comprises of the following Directors.
Sl. No. Name of Directors (Shri) Status in CSR & Sustainability Committee
1 Syedain Abbasi, IAS, Chairman Director and Joint Secretary to Govt. of India, Ministry of Steel. 2 Sisir Kumar Appikatla, Director Member 3 P. K. Sarangi, Director (Technical) Member
The Company Secretary acts as the Secretary to the CSR & Sustainability Committee.
Number of CSR & Sustainability Committee Meetings : During the year 2016-17, Four (4) Meetings were held, the details of which are given below:
Sl.No Date of Meeting Member’s Strength No. of Members Present 1 04.07.2016 Three Three 2 26.09.2016 Three Three 3 07.12.2016 Three Three 4 22.02.2017 Three Three
A house of engineering excellence ...aiming beyond 79 MECON Limited
Particulars of the Directors including their attendance at the CSR & Sustainability Committee Meeting.
Name of Directors Period No. of CSR & No. of CSR & Sustainability Sustainability Committee Committee Meetings held. Meetings attended. Shri Syedain Abbasi, IAS, 01.04.2016 Four Four Director & Chairman, to CSR & Sustainability Committee. 31.03.2017 Shri S.R. Sengupta, 01.04.2016 Three Three Director (Technology) & Member, to CSR & Sustainability Committee. 31.12.2016 (Upto 31.12.2016) Shri. A.P. Singh, 01.04.2016 Three Three Director (Engineering) & Member, to CSR & Sustainability Committee. 31.12.2016 (Upto 31.12.2016) Shri. Sisir Kumar Appikatla, 10.02.2017 One One Director & Member, to CSR & Sustainability Committee. 31.03.2017 (w.e.f. 10.02.2017) Shri. P.K. Sarangi, 10.02.2017 One One Director (Technical) & Member, to CSR & Sustainability Committee. 31.03.2017 (w.e.f. 10.02.2017)
3.4 Part time Independent Directors Meeting Since only one part-time Independent Director has so far been appointed in the FY 2016-17, no meeting of Part-time Independent Director was held during the period under review.
4.0 GENERAL BODY MEETING : The details of the last three Annual General Meeting of the company are as follows:-
Year Date Time Venue 2013-14 10th Oct., 2014 12.30 PM Hotel Ashok, Chanakyapuri, New Delhi - 110107.
2014-15 22nd Sept., 2015 12.00 NOON Hotel Royal Plaza, Ashok Road, New Delhi - 110107.
2015-16 22nd Aug., 2016 2.00 P.M Board Room, MECON Office, 13th Floor, SCOPE Minar, Laxmi Nagar, Delhi - 110092
80 44th Annual Report 2016-17
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 FY 2016-17 under Section 149(6) of the said Act. 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 AS-18 is disclosed under Note 35.12 of the Financial Statement. 5.3 Disclosure of accounting treatment All applicable 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 32 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 the 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 established 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.
A house of engineering excellence ...aiming beyond 81 MECON Limited
INDEPENDENT AUDITORS' REPORT
To, The Members of MECON LIMITED
Report on the Financial Statements We have audited the accompanying Financial Statements of MECON LIMITED, ("the Company"), which comprises the Balance Sheet as at March 31st, 2017 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the 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 financial statements that give a true and fair view of the financial position, financial performance 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 Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the Internal financial control relevant to the company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.
82 44th Annual Report 2016-17
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Financial Statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2017; (b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and (c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) as amended, issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, 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 accounts 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 and the Cash flow Statement dealt with by this Report are in agreement with the books of account. (d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; (e) In terms of Govt. of India, Department of Company affairs Notification No. GSR 463(E) dated 5th June 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” and (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 ammended, in our opinion and to the best of our information and according to the explanations given to us: I. The Company does not have any pending litigations which would materially impact its financial position. II. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses on long term contracts. III. The Company has no amount that is required to be transferred to the Investor Education and Protection Fund.
A house of engineering excellence ...aiming beyond 83 MECON Limited
IV. The Company has provided requisite disclosure in the financial statements as regards its holding and dealing in Specified Bank Notes as defined in the Notification S.O. 3407 (E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management. Refer Note 35.23 of the financial statements.
Place : Ranchi For. V. Rohatgi & Co. Dated : 14 July 2017 Chartered Accountants, Firm Registration No: 000980C
Sd/- (Bipul Rastogi) Partner M. No. 072318
84 44th Annual Report 2016-17
ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT (Referred to in Paragraph 1 of Our Report On Other Legal and Regulatory Requirements)
(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 Rs. 2.69 lakhs, which is pending since long for execution by the Government of Jharkhand. (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 Companies Act, 2013 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 Companies Act , 2013. (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, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Value
A house of engineering excellence ...aiming beyond 85 MECON Limited
Added Taxes, Wealth 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, 2017 c) According to the information and explanations given to us, there disputed statutory dues, which have not been deposited as at 31st March 2017, as given herein below:
Name of the Statute Period to Forum Amount which relates (` in lakhs) Central Sales Tax 1999-2000 STAT, Andhra Pradesh. 4.41 Act and Sales Tax Acts of Various 2000-2001 STAT, Andhra Pradesh 101.40 States 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, JCCT(Appeal), Dhanbad 0.67 1994-1995 & 1996-1997 2005-2006 Commissioner of Commercial Taxes, Ranchi 78.50 2008-2009 Commissioner of Commercial Taxes, Ranchi 20.61 1996-1997 Joint Commissioner of Comm. Taxes (Appeal), Jamshedpur 1.92 *1994-1995 Jharkhand Sales Tax Tribunal 219.10 *2003-2004 Addl. Commissioner, Kolkata 16.47 2006-2007 Jharkhand Commercial Tax Tribunal ( Appeal) 9.76 2007-2008 Jharkhand Commercial Tax Tribunal (Appeal) 26.16 2010-2011 J. Commissioner of commercial Taxes, (Ranchi) 217.29 2011-2012 J. Commissioner of Commercial Taxes, (Ranchi) 535.81 Employees Provident Fund and Misc. 2003-2004 EPF, Appellate Tribunal, New Delhi 229.70 Provisions Act 1952
Out of the above disputed statutory dues in the two cased marked *provision has been made in the books of accounts under “ Provision for Disputed cases – sales tax matter.
86 44th Annual Report 2016-17
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 on or by the company has been noticed or reported during the course of our audit. xi) According to the information and explanation given to us and based upon the audit procedure performed, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provision of section 197 read with Schedule V of the Companies Act, 2013. 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 Companies Act, 2013 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. Place : Ranchi Chartered Accountants, Dated : 14 July 2017 Firm Registration No.: 000980C
Sd/- (Bipul Rastogi) Partner M. No. 072318
A house of engineering excellence ...aiming beyond 87 MECON Limited
ANNEXURE - B TO THE INDEPENDENT AUDITORS’ REPORT OF MECON LIMITED FOR THE YEAR 2016-17
Directions under section143(5) of Companies Act, 2013 Referred to in paragraph 2 of our report
S. No. Question Reply
1 Whether the company has clear title / lease 1. We have examined the title/ lease deed of free hold deeds for freehold and leasehold land and lease hold land, which was made available. respectively? If not please state the area of 2. Deed of conveyance of Land at Ranchi, measuring freehold and leasehold land for which title/ 10.25 acres, valued for Rs. 2.69 Lakhs, is pending lease deeds are not available for execution by Govt. of Jharkhand. 3. As informed there is no land under dispute.
2 Whether there are any cases of waiver/ write off Book Debts outstanding for more than three years of debts/ loans/ interest etc., if yes, the reason amounting to Rs.1.90 Lakhs is written off during the thereof and amount involved. year considering it unrealisable.
3 Whether proper records are maintained for As informed to us no inventory is lying with third inventories lying with third parties & assets parties. The company has not received any gift from received as gift/ grant(s) from Govt. or other government or other authorities during the year. authorities.
88 44th Annual Report 2016-17
“Annexure C” to the Independent Auditor’s report of even date on Financial Statements of MECON LIMITED.
Report on Internal Financial Controls 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 on 31st March, 2017 in conjunction with our audit of the 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.
Auditors 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 deemed to be 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 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.
A house of engineering excellence ...aiming beyond 89 MECON Limited
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 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 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 financial statements.
Inherent 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, 2017, 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 Number:000980C
Sd/- (Bipul Rastogi) Partner Place: Ranchi M. No. 072318 Date : 14 July 2017
90 44th Annual Report 2016-17
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF MECON LIMITED FOR THE YEAR ENDED 31 MARCH 2017
The preparation of financial statements of MECON Limited for the year ended 31 March 2017 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 14 July 2017.
I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of MECON Limited for the year ended 31 March 2017. 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 audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors' report.
For and on the behalf of the Comptroller and Auditor General of India
(Indu Agrawal) Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Ranchi.
Place : Ranchi Dated : 18 August 2017
A house of engineering excellence ...aiming beyond 91 MECON Limited
BALANCE SHEET AS AT 31st MARCH, 2017 (` in lakhs) PARTICULARS NOTE NO. AS ON 31.03.2017 AS ON 31.03.2016 I. EQUITY AND LIABILITIES (1) Shareholders' Funds (a) Share Capital 1 4,013.84 4,013.84 (b) Reserves & Surplus 2 11,123.51 21,726.12 (c) Money received against share warrants - 15,137.35 - 25,739.96 (2) Share Application money pending allotment - - (3) Non-Current Liabilities (a) Long-Term Borrowings 3 - - (b) Deferred Tax Liabilities (Net) 4 - - (c) Other Long-Term Liabilities 5 16,566.21 12,739.76 (d) Long-Term Provisions 6 33,354.16 49,920.37 29,393.16 42,132.92 (4) Current Liabilities (a) Short-Term Borrowings 7 - - (b) Trade Payables 8 (A) Total outstanding dues of micro 1,479.42 1,438.03 enterprises and small enterprises (B) Total Outstanding dues of creditors 11,298.34 11,052.83 other than micro enterprises and small enterprises (c) Other Current Liabilities 9 19,065.50 19,439.35 (d) Short-Term Provisions 10 18,448.29 50,291.55 15,984.27 47,914.48 TOTAL 1,15,349.27 1,15,787.36 II. ASSETS (1) Non-Current Assets (a) Fixed Assets (i) Tangible Assets 11 7,916.45 8,846.83 (ii) Intangible Assets 12 254.79 181.51 (iii) Capital Work-in-Progress 13 65.51 316.80 (iv) Intangible Assets under development - - 8,236.75 9,345.14 (b) Non-Current Investments 14 511.92 511.92 (c) Deferred Tax Asset (Net) 4 5,031.27 4,569.41 (d) Long-Term Loans and Advances 15 7,181.45 4,666.80 (e) Other Non-Current Assets 16 10,105.50 31,066.89 13,918.55 33,011.82 (2) Current Assets (a) Current Investments - - (b) Inventories 17 153.20 136.89 (c) Jobs-in-Progress 18 613.56 741.27 (d) Trade Receivables 19 18,195.07 17,323.23 (e) Cash and Bank Balances 20 55,043.09 53,943.71 (f) Short-Term Loans and Advances 21 8,253.93 8,197.29 (g) Other Current Assets 22 2,023.53 84,282.38 2,433.15 82,775.54 TOTAL 1,15,349.27 1,15,787.36 Note No.1 to 35 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/- (BIPUL RASTOG) (RAVI BAMBHA) (R. H. JUNEJA) (S. CHATTOPADHYAY) (ATUL BHATT) PARTNER COMPANY SECRETARY GENERAL MANAGER (FINANCE) DIRECTOR (PROJECT) CHAIRMAN and MANAGING DIRECTOR Memb.No.072318 Firm Regn. No.000980C Place : Ranchi Dated : 14.07.2017
92 44th Annual Report 2016-17
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2017 (` in lakhs) Current Previous PARTICULARS NOTE NO. Year Year I. Revenue from Operations 23 34,908.87 32,785.01 II. Other Income 24 5,789.50 7,201.66 III. TOTAL REVENUE (I+II) 40,698.37 39,986.67 I V. EXPENSES: (a) Purchases of Equipments & Direct Expenses 25 11,345.53 14,764.04 (b) (Accretion)/Decretion to Jobs-in-Progress 26 161.47 (236.79) (c) Employee Benefit Expenses 27 29,178.33 31,076.63 (d) Finance Costs 28 156.68 191.34 (e) Depreciation and Amortisation Expenses 29 972.36 890.80 (f) Other Expenses 30 7,670.02 10,780.53 TOTAL EXPENSES 49,484.39 57,466.55 V. Profit/(Loss) before prior period, exceptional and (8,786.02) (17,479.88) extraordinary items and tax (III-IV) VI. Add/(Less) Prior Period Items 31 (28.24) 9.40 VII. Profit/(Loss) before exceptional and extraordinary (8,814.26) (17,470.48) items and tax (V-VI) VIII. Exceptional/Extraordinary Items - - IX. Profit/(Loss) before Tax (VII-VIII) (8,814.26) (17,470.48) X. Tax Expense: (a) Current Tax - - (b) Deferred Tax (461.86) (1,181.51) (c) Taxes relating to Earlier Years 31.95 (47.59) XI. Profit/(Loss) for the period from continuing operations (8,384.35) (16,241.38) (IX-X) XII. Profit/(Loss) for the period from discontinuing - - operations XIII. Profit/(Loss) for the period (XI+XII) (8,384.35) (16,241.38) XIV. Earnings per equity share (Face Value ` 10/- each) 35.14 (Basic & Diluted) (`) (20.89) (40.46) Note No.1 to 35 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/- (BIPUL RASTOGI) (RAVI BAMBHA) (R. H. JUNEJA) (S. CHATTOPADHYAY) (ATUL BHATT) PARTNER COMPANY SECRETARY GENERAL MANAGER (FINANCE) DIRECTOR (PROJECT) CHAIRMAN and MANAGING DIRECTOR Memb.No.072318 Firm Regn. No.000980C
Place : Ranchi Dated : 14.07.2017
A house of engineering excellence ...aiming beyond 93 MECON Limited
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2017 (Indirect Method) (` In lakhs) 2016-17 2015-16 Cash Flows from Operating Activities Net Profit/(Loss) before Taxation (8,814.26) (17,470.48) Add : Adjustments for Depreciation & Amortisation 1,000.60 890.81 Loss on Sale/Disposal of Fixed Assets 13.55 4.63 Provision for Bad and Doubtful Debts 198.25 808.91 Other Provisions 695.98 3,325.23 Finance Costs 156.68 191.34 2,065.06 5,220.92 Less : Adjustments for Revaluation Reserve written back - 24.64 Profit on Sale/Disposal of Fixed Assets 2.20 1.16 Interest Income 4,427.60 5,609.52 Dividend Received 1.06 1.06 4,430.86 5,636.38 Operating Profit/(Loss) before Working Capital Changes (11,180.06) (17,885.94) Add : Adjustments for (Increase) / Decrease in Inventories (16.31) 5.23 (Increase) / Decrease in Jobs-in-Progress 124.06 (236.79) (Increase) / Decrease in Trade Receivables (3,775.08) (5,592.59) (Increase) / Decrease in Loans and Advances (2,930.57) (2,804.41) (Increase) / Decrease in Other Current Assets (286.26) 3,327.01 Increase / (Decrease) in Liabilities and Provisions 9,990.26 11,987.87 3,106.10 6,686.32 Cash Generated from Operations (8,073.96) (11,199.62) Less : Taxes Paid - 3.64 Net Cash from Operating Activities {A} (8,073.96) (11,203.26) Cash Flows from Investing Activities Purchase of Fixed Assets (2,140.84) (1,504.72) Fixed Assets sold/discarded 19.02 4.05 (Increase)/Decrease in Deposits with Bank 5,490.56 6,799.44 Interest Received 4,953.32 5,529.86 Dividend Received 1.06 1.06 Net Cash from Investing Activities {B} 8,323.12 10,829.69
94 44th Annual Report 2016-17
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2017 (Indirect Method) (Contd.) (` In lakhs) 2016-17 2015-16
Cash Flows from Financing Activities Redemption of 5% Non-Cumulative - (1,260.00) Preference Shares Dividend including Dividend Tax Paid - (1,094.16) Finance Costs (159.22) (188.80) Net Cash from Financing Activities {C} (159.22) (2,542.96)
Net Increase/(Decrease) in Cash & Cash Equivalent 89.94 (2,916.53) {A}+{B}+{C} Cash and Cash Equivalent at the beginning 143.15 3,059.68 Cash and Cash Equivalent at the end 233.09 143.15 Note No.1 to 35 form an integral part of Financial Statements
Cash & Cash Equivalents represents i) Cash & Stamps on hand 16.88 15.46 ii) Cheques & Drafts on hand - - iii) Cash at Bank (Current A/c & Flexi Deposit A/c) 216.21 233.09 127.69 143.15
In terms of our report of even date For V. ROHATGI & CO. CHARTERED ACCOUNTANTS
Sd/- Sd/- Sd/- Sd/- Sd/- (BIPUL RASTOGI) (RAVI BAMBHA) (R. H. JUNEJA) (S. CHATTOPADHYAY) (ATUL BHATT) PARTNER COMPANY SECRETARY GENERAL MANAGER (FINANCE) DIRECTOR (PROJECT) CHAIRMAN and MANAGING DIRECTOR Memb.No.072318 Firm Regn. No.000980C
Place : Ranchi Dated : 14.07.2017
A house of engineering excellence ...aiming beyond 95 MECON Limited
NOTE 1 : SHARE CAPITAL (` in lakhs) AS ON AS ON 31.03.2017 31.03.2016 AUTHORISED Equity Shares 4,10,00,000 (Previous year 4,10,00,000) Equity Shares of ` 10/- each 4,100.00 4,100.00 Preference Shares 6,30,00,000 (Previous year 6,30,00,000) 5% Non Cumulative Redeemable 6,300.00 6,300.00 Preference Shares of ` 10/- each 10,400.00 10,400.00 ISSUED, SUBSCRIBED AND FULLY PAID UP Equity Shares 4,01,38,360 ( Previous year 4,01,38,360 ) Equity Shares of ` 10/- each with voting 4,013.84 4,013.84 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-cum-Managing Director of the company. Out of the total shares, 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. 4,03,060 equity shares are allotted as fully paid-up Bonus Shares during 1996-97 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 Preference Shares NIL (Previous year NIL) 5% Non-Cumulative Redeemable Preference Shares of - - ` 10/- each with preferential rights. These shares are redeemable in five equal annual instalments commencing from 2011-12 and have been fully redeemed during the FY 2015-16. NIL (Previous year NIL) preference shares are held as fully paid-up by the President of India vide Government of India, Ministry of Steel sanction letter no.4(46)/2004- HSM(Vol.IV) dated 29.06.2007. TOTAL 4,013.84 4,013.84
96 44th Annual Report 2016-17
RECONCILIATION OF SHARES
AS ON 31.03.2017 AS ON 31.03.2016
Number Amount Number Amount (` in lakhs) (` in lakhs) Equity Shares
Shares Outstanding at the beginning 4,01,38,360 4,013.84 4,01,38,360 4,013.84 Shares Issued during the period - - - - Shares Bought Back during the period - - - - Shares Outstanding at the end 4,01,38,360 4,013.84 4,01,38,360 4,013.84
5% Non-Cumulative Redeemable Preference Shares
Shares Outstanding at the beginning - - 1,26,00,000 1,260.00 Shares Issued during the period - - - - Shares Redeemed during the period - - 1,26,00,000 1,260.00 Shares Outstanding at the end - - - -
A house of engineering excellence ...aiming beyond 97 MECON Limited
NOTE 2 : RESERVES & SURPLUS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 Capital Redemption Reserve As per last Balance Sheet 6,300.00 5,040.00 Add : Transferred from Surplus - 6,300.00 1,260.00 6,300.00 Revaluation Reserve $ As per last Balance Sheet 2,218.26 2,242.90 Less : Transferred to Statement of Profit and Loss due to - 24.64 Depreciation on appreciation of Land & Buildings Less : Amount adjusted / written back 2,218.26 - - 2,218.26 CSR Activity Reserve As per last Balance Sheet 82.55 135.64 Add : Transferred from Surplus - 168.00 Less : Transferred to Surplus 67.30 15.25 221.09 82.55 General Reserve As per last Balance Sheet 9,852.39 9,852.39 Add : Transferred from Surplus - 9,852.39 - 9,852.39 Surplus As per last Balance Sheet 3,272.92 20,721.21 Add : Net Profit / (Loss) from Statement of Profit and Loss (8,384.35) (16,241.38) Add : Transferred from CSR Activity Reserve 67.30 221.09 Amount available for appropriation (5,044.13) 4,700.92 Less : Transferred to Capital Redemption Reserve - 1,260.00 Less : Transferred to CSR Activity Reserve - 168.00 Less : Proposed Dividend on Preference Shares - - including Dividend Distribution Tax Less : Proposed Dividend on Equity Shares - - including Dividend Distribution Tax Less : Transferred to General Reserve - (5,044.13) - 3,272.92
TOTAL 11,123.51 21,726.12 $ A Revaluation Reserve of `3,879.23 lakhs was created as on 31.03.2000 due to revaluation of certain Land & Buildings owned by the company. It was adjusted to the extent of `1,660.97 lakhs upto 31st March, 2016 on account of disposal/ depreciation of Revalued Assets. Due to changes in accounting policy in line with Accounting Standard-10 as notified / amended by Ministry of Corporate Affairs on 30.03.2016,
`2218.26 lakhs is adjusted / written back during the year 2016-17.
98 44th Annual Report 2016-17
NOTE 3 : LONG-TERM BORROWINGS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016
TOTAL - -
NOTE 4 - DISCLOSURE UNDER ACCOUNTING STANDARD-22 ON "ACCOUNTING FOR TAXES ON INCOME"
The details of Deferred Tax Liability / (Asset) is as under: (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Deferred Tax Liability (i) Difference between book and tax depreciation 703.27 703.23 (ii) Provision for gratuity (8.31) 72.11 (iii) Others 139.65 834.61 139 .65 914.99 (b) Deferred Tax Assets (i) Provision for bad & doubtful debts, etc. 4,682.42 4,513.90 (ii) Others 1,183.46 5,865.88 970.50 5,484.40
NET DEFERRED TAX LIABILITY / (ASSET) (a) - (b) (5,031.27) (4,569.41)
A house of engineering excellence ...aiming beyond 99 MECON Limited
NOTE 5 : OTHER LONG-TERM LIABILITIES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Trade Payables (i) Dues to Micro, Small & Medium Enterprises 1,032.15 967.23 (MSME) (ii) Others 6,202.25 7,234.40 4,105.96 5,073.19 (b) Other Payables (i) Advances from Clients 3,919.97 3,457.17 (ii) Sundry Creditors 568.61 156.59 (iii) Liquidated Damages Recovered from Parties 446.92 390.03 (iv) Securities and Other Deposits 324.38 304.05 (v) Deposit under Employees Family Benefit Scheme 358.70 278.81 (vi) Liability for Employees 3,713.23 3,079.92
TOTAL 16,566.21 12,739.76
NOTE 6 : LONG-TERM PROVISIONS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Provision for Employee Benefits (i) Provision for Gratuity 152.21 191.06 (Present Value of Defined Benefit Obligation as per actuarial valuation) (ii) Provision for Leave Encashment 9,806.72 8,671.69 (Present Value of Defined Benefit Obligation as per actuarial valuation) (iii) Provision for Other Employee Defined Benefit 5,802.91 4,846.85 Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation) (iv) Provision for Employee Defined Contribution 14,216.78 12,639.64 Schemes (b) Other Provisions (i) Provision for Taxation (Net) - - (ii) Provision for Miscellaneous Deduction by Clients 3,090.42 2,758.80 (iii) Provision for Disputed Cases 285.12 285.12
TOTAL 33,354.16 29,393.16
100 44th Annual Report 2016-17
NOTE 7 : SHORT-TERM BORROWINGS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 Working Capital Borrowings from Bank - - (Secured against Fixed Deposits with Banks under lien) TOTAL - -
NOTE 8 : TRADE PAYABLES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 Trade Payables (i) Dues to Micro, Small & Medium Enterprises (MSME) (a) - Principal Amount, remaining unpaid 1,479.42 1,438.03 - Interest due on Principal Amount, remaining unpaid - 1,479.42 - 1,438.03 (b) Principal and Interest amount paid beyond - - appointed day during the year (c) Interest due and payable for the delay in - - making payment which have been paid beyond appointed day but without adding the interest (d) Amount of Interest accrued and remaining - - unpaid at the end of the year (e) Amount of further interest remaining due and - - payable until such date when the interet dues above are actually paid (ii) Others 11,298.34 11,052.83
TOTAL 12,777.76 12,490.86
A house of engineering excellence ...aiming beyond 101 MECON Limited
NOTE 9 : OTHER CURRENT LIABILITIES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Current Maturity of Long-Term Borrowings - - (b) Interest accrued but not due on borrowings - 2.54 (c) Interest accrued and due on borrowings - - (d) Other Payables (i) Advances from Clients 9,922.80 9,580.88 (ii) Sundry Creditors 2,002.88 2,335.18 (iii) Liquidated Damages Recovered from Parties 79.17 115.30 (iv) Securities and other deposits 396.14 372.53 (v) Deposit under Employees Family Benefit Scheme 44.85 70.74 (vi) Liability for Employees 3,368.98 3,642.47 (vii) VAT / Central Sales Tax Payable 187.32 76.11 (viii) Service Tax Payable 48.34 45.58 (ix) Invoice raised but not accrued (Net) 2,356.30 2,331.34 (x) Others (including CSR / SD / R&D Fund) 658.72 866.68 TOTAL 19,065.50 19,439.35
NOTE 10 : SHORT-TERM PROVISIONS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Provision for Employee Benefits (i) Provision for Bonus 10.57 11.74 (ii) Provision for Gratuity 10.75 29.68 (Present Value of Defined Benefit Obligation as per actuarial valuation) (iii) Provision for Leave Encashment 1,901.05 1,838.73 (Present Value of Defined Benefit Obligation as per actuarial valuation) (iv) Provision for Other Employee Defined Benefit 194.13 151.55 Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation) (b) Other Provisions (i) Proposed Dividend on Preference Shares - - (ii) Provision for Dividend Distribution Tax - - - - (iii) Proposed Dividend on Equity Shares - - (iv) Provision for Dividend Distribution Tax - - - -
(v) Provision for Expenses & Contractual Obligations 16,296.50 13,662.68 (vi) Provision for Miscellaneous Deductions by Clients 35.29 289.89 (vii) Others - - TOTAL 18,448.29 15,984.27
102 44th Annual Report 2016-17 0.03 27.26 30.82 12.80 127.54 360.36 304.95 443.47 205.95 638.43 266.79 Y IN G As on 31.03.16 2,353.64 4,772.04 4,619.94 ( ` in lakhs) AMO U NT 0.02 63.93 25.14 34.11 11.91 124.23 324.33 302.30 431.15 217.28 604.38 As on NET CARR 31.03.17 1,583.18 3,721.96 4,772.04 - 0.53 60.88 11.03 33.63 374.57 197.58 650.52 795.46 661.09 U pto 5,693.12 5,550.93 31.03.17 1,011.85 1,895.98 - - 3.80 3.31 2.12 7.61 28.63 91.84 91.23 660.10 598.60 109.64 220.11 101.81 During the year ------217.89 - Reval uation / Write / Write 217.89 Back of Adjust. Adjust. Reserve Reserve ------In - ment (28.05) (28.05) - Adjust H ead ter- DEPRECIATION DEPRECIATION ------0.01 8.08 2.36 34.29 74.90 ment 227.23 - Adjust 271.97 On Sale/ - 8.91 0.53 57.57 26.02 193.79 592.97 345.94 567.36 706.59 As on 5,550.93 01.04.16 1,148.15 1,903.10 5,027.23 0.55 36.17 67.74 63.93 209.49 185.11 952.82 591.85 As on 9,415.08 31.03.17 1,265.47 2,595.03 1,119.79 2,327.13 10,322.97 ------890.85 202.86 uation Reserve Reserve Adjust. / Adjust. - of Reval 1,093.71 Write Back Write ------In - ment - Adjust H ead ter- (49.40) (49.40) - - - - - COST 0.01 4.98 2.41 0.01 13.94 82.16 36.80 ment Sale/ during - Adjust 302.35 244.20 the year - - - - 2.91 73.63 38.46 55.25 91.69 39.96 10.91 year 537.57 757.96 224.76 ment - Adjust Addition/ Addition/ during the 0.55 36.17 56.84 206.59 185.11 266.79 897.93 551.89 As on 01.04.16 1,205.78 9,647.17 3,501.80 1,066.95 2,346.57 10322.97 TOTAL Particulars Figures for Previous Year for Previous Figures Electrical Installation Misc. Articles including Library - Leasehold Land Building - Freehold Bridges & Culverts Road, Supply and Sewerage Water & Fixtures Furniture Motor Vehicles Office Equipments Computer Hardware Laboratory Equipments 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. NOTE 11.1 : PROPERTY, PLANT AND EQUIPMENT (GENERAL) PLANT : PROPERTY, NOTE 11.1
A house of engineering excellence ...aiming beyond 103 MECON Limited
0.24 0.28 4.11 0.01 43.99 11.64 39.27 24.64 317.29 125.71 187.27 152.21 792.91 792.90 768.26 Year Year Y IN G As on 8,173.44 3,553.50 8,846.83 1,380.37 4,074.79 1,812.41 31.03.16 Previous ( ` in lakhs) - AMO U NT 0.21 0.28 8.82 4.11 40.08 11.28 89.31 197.46 462.10 115.96 229.73 ear 28.24 As on NET CARR 31.03.17 8,846.83 4,074.79 7,916.45 4,194.49 Y 3,035.15 923.77 895.53 895.53 Current - 0.80 5.94 7.77 72.57 19.89 78.09 325.40 832.98 167.39 259.71 228.81 U pto 31.03.17 7,453.43 1,902.50 7,692.47 1,999.35 - - - 5,000/- each are fully depreciated 5,000/- 0.03 2.83 6.48 3.07 54.73 10.10 23.38 62.90 100.15 During the year 792.91 194.31 923.77 263.67 ------Reval uation / Write / Write Back of Adjust. Adjust. Reserve Reserve 411.36 193.47 193.47 ------1.66 In - 27.06 28.05 (0.99) (2.65) ment - Adjust H ead ter- DEPRECIATION DEPRECIATION ------0.12 0.41 0.01 0.40 0.01 1,000/- each and upto ` 1,000/- 75.02 ment (0.01) - Adjust 272.38 On Sale/ - 0.77 5.94 7.60 16.82 66.49 78.10 898.25 157.29 236.33 269.00 165.91 As on 1,000/- each are charged to revenue (Refer Note 32 Sl.No.4.2) and to revenue (Refer 1,000/- each are charged 01.04.16 6,735.54 1,708.31 7,453.43 1,902.50 1.01 6.22 31.17 16.59 82.20 197.46 283.35 489.44 112.65 787.50 318.12 As on 31.03.17 5,977.29 3,868.13 6,193.84 15,608.92 16,300.26 ------347.91 - Reval uation / Write / Write Back of Adjust. Adjust. Reserve Reserve 1,188.00 2,629.62 - - 1,535.91 ------In - 49.40 17.53 ment (30.76) - Adjust H ead ter- (13.23) - - 36.17 ------COST 0.38 0.40 0.40 82.54 302.75 year Sale/ during the Adjustment Adjustment Depreciation relating to earlier years Total Depreciation for the period Total Depreciation on appreciation due to revaluation of Land & Buildings Depreciation - - - - i) ii) 5.09 0.48 2.71 2.57 0.35 65.84 year ment 715.86 183.67 - Adjust 2,254.26 1,473.82 1,455.98 1,716.69 Addition/ Addition/ during the 1.01 6.22 46.87 28.46 82.20 586.30 110.48 318.12 283.00 423.60 As on 01.04.16 16,300.26 14,908.98 1,380.37 5,261.81 2,710.66 5,977.29 TOTAL TOTAL Particulars Figures for Previous Year for Previous Figures Figures for Previous Year for Previous Figures RAND TOTAL (11.1 & 11.2) TOTAL G RAND Land Building Computer Hardware Motor Vehicles Office Equipments Electrical Installation Misc. Articles including Library Fences Furniture & Fixtures Furniture Road, Bridges & Culverts Road, Water Supply and Sewerage Water Plant & Equipments Note : Allocation of Depreciation Based on the concept of materiality, assets purchased during the year costing upto ` Based on the concept of materiality, included in NOTE 30 - "OTHER EXPENSES" and assets purchased during the year costing above ` - "OTHER EXPENSES" and assets purchased included in NOTE 30 2013. Note 32 Sl.No.5.2), irrespective of useful life assets/provisions as specified in Schedule II the Companies Act, in the year of acquisition (Refer NOTE 11.2 : PROPERTY, PLANT AND EQUIPMENT (SOCIAL AMENITIES) AND EQUIPMENT (SOCIAL PLANT : PROPERTY, NOTE 11.2 1. 2. 11. 8. 9. 10. 12. 5. 7. 3. 4. 6.
104 44th Annual Report 2016-17
NOTE 11.3 : 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.
B) BUILDINGS (i) 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. (ii) Pending determination of the proportionate value of the land in respect of Buildings acquired at Gaziabad, Navi Mumbai 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) During the year 2016-17, the Gross Block of Land is reduced / adjusted by `1,390.86 lakhs, the Gross Block of Buildings is reduced / adjusted by `1,238.76 lakhs and Provision for Depreciation on Buildings is reduced / adjusted by `411.36 lakhs due to changes in accounting policy. D) Necessary changes / adjustments are made under "PROPERTY, PLANT & EQUIPMENT" and "INTANGIBLE ASSETS" - Gross Block of different types of assets due to re-classification / re-grouping, etc. as required to depict the appropriate status. Provision for Depreciation / Amortisation & Net Block is also changed / adjusted accordingly.
A house of engineering excellence ...aiming beyond 105 MECON Limited
NOTE 12.1 : INTANGIBLE ASSETS (` in lakhs) Particulars COST AMORTISATION NET CARRY- ING AMOUNT
year year U pto Sale/ As on As on As on As on period As on 31.03.17 31.03.17 31.03.16 01.04.16 31.03.17 01.04.16 On Sale/ during the during the Addition / Addition During the H ead Inter- H ead Inter- Adjustment Adjustment Adjustment Adjustment Adjustment Adjustment Adjustment Adjust-ment Adjust-ment 1. Computer Software 1,242.68 137.87 11.38 - 1,369.17 1,061.17 11.38 - 74.18 1,123.97 245.20 181.51 (General) 2. Computer Software (Social - - - 13.23 13.23 - - 0.99 2.65 3.64 9.59 - Amenities) TOTAL 1,242.68 137.87 11.38 13.23 1,382.40 1,061.17 11.38 0.99 76.83 1,127.61 254.79 181.51
Figures for Previous Year 1,161.99 80.69 - - 1,242.68 963.27 - - 97.90 1,061.17 181.51 198.72
Current Previous Year Year Note : Allocation of Amortisation i) Amortisation for the Year 76.83 97.90 ii) Amortisation relating to earlier years - - 76.83 97.90
NOTE 12.2 : DISCLOSURE UNDER ACCOUNTING STANDARD-26 ON "INTANGIBLE ASSETS" Intangible Assets- Computer Software I) The amortization rates used - for individual software costing above ` 5.00 lakhs, 20% amortisation each year over a period of five years or proportionate amortisation each year over its licence period which is less than five years, from the year of acquisition and for individual software costing upto ` 5.00 lakhs, 100% amortization in the year of acquisition.
II) The amortization method used – Straight line method (` in lakhs) As on As on Particulars 31.03.17 31.03.16
i) Gross carrying amount (Opening) 1,242.68 1,161.99 ii) Gross carrying amount (Closing) 1,382.40 1,242.68 iii) Accumulated amortization (Opening) 1,061.17 963.27 iv) Amortization recognized during the period 66.44 97.90 v) Accumulated amortization (Closing) 1,127.61 1,061.17
106 44th Annual Report 2016-17
NOTE 13 : CAPITAL WORK-IN-PROGRESS (` in lakhs) Opening Additions/ Capitalised/ Balance Balance Adjustments Adjustments Particulars Total as on during the during the As on As on 01.04.16 Period period 31.03.17 31.03.16 1. Installation of Water Pump, Elevator, 315.76 133.60 449.36 383.85 65.51 315.76 Energy Meter, etc. at Residential Township and Network Attached Storage, etc, at Head Office at Ranchi, Jharkhand. 2. Development of Software at NMDC 1.04 (1.04) - - - 1.04 Site, Nagarnar, Chattishgarh. TOTAL 316.80 132.56 449.36 383.85 65.51 316.80
i) Installation of Elevator at Administrative Building, Ranchi has been capitalised and transferred under "Electrical Installations" in NOTE 11.1 - "PROPERTY, PLANT AND EQUIPMENTS (GENERAL)" ` 47.87 Lakhs.
ii) Installation of Network Attached Storage at Administrative Building, Ranchi has been capitalised and transferred under "Computer Hardware" in NOTE 11.1 - "PROPERTY, PLANT AND EQUIPMENTS (GENERAL)" ` 12.80 Lakhs. iii) Renovation of Office Building at Bhilai has been capitalised and transferred under "Buildings" in NOTE 11.1 - "PROPERTY, PLANT AND EQUIPMENTS (GENERAL)" ` 6.19 Lakhs. iv) Construction of Stores Building Extension, Dinning Hall in Transit Rest House and Toilet Block in Community Hall, Township, Ranchi has been capitalised and transferred under "Buildings" in NOTE 11.2 - "PROPERTY, PLANT AND EQUIPMENTS (SOCIAL AMENITIES)" ` 148.72 Lakhs.
v) Installation of Energy Meter at Residential Township, Ranchi has been capitalised and transferred under "Electrical Installations" in NOTE 11.2 - "PROPERTY, PLANT AND EQUIPMENTS (SOCIAL AMENITIES)" ` 168.27 Lakhs.
A house of engineering excellence ...aiming beyond 107 MECON Limited
NOTE 14 : NON-CURRENT INVESTMENTS (` in Lakhs)
Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Trade Investment - at Cost (Unquoted) I) Investment in Equity Instruments i) Joint Venture
5000 Equity Shares of Naira 10 each fully paid up being 7.60 7.60 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 dimunition in value of investment 7.60 - 7.60 -
ii) Others
50,00,000 Equity Shares of ` 10/- each fully paid up of 500.00 500.00 "Neelachal Ispat Nigam Limited".
(b) Other Investment - at Cost (Unquoted)
Investment in Equity Instruments
i) Others
106,383 Equity Shares of ` 10/- each fully paid-up of 11.92 11.92 "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 511.92 511.92
a) Aggregate amount of Quoted Investments NIL NIL b) Aggregate amount of Unquoted Investments 519.52 519.52 c) Aggregate provision for dimunition in value of investment 7.60 7.60
108 44th Annual Report 2016-17
NOTE 15 : LONG-TERM LOANS AND ADVANCES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Capital Advances $ - 347.33 (b) Security Deposits (i) Government Authorities $ 5.44 5.50 (ii) Others Unsecured, considered good 316.79 188.39 Considered doubtful 113.24 92.65 430.03 281.04 Less : Provision for doubtful deposits 113.24 316.79 92.65 188.39 (c) Loans and advances to related parties - - (d) Other Loans and Advances (i) Advance to Suppliers and Sub-Contractors Secured, considered good # 763.38 762.34 Considered doubtful 361.73 361.73 1,125.11 1,124.07 Less : Provision for doubtful advances 361.73 763.38 361.73 762.34 (ii) Advance to Employees $ 7.57 9.22 (iii) Advance to Others $ 105.60 106.72 (iv) Prepaid Expenses $ 0.34 0.63 (v) Claims Recoverable Unsecured, considered good 3.01 0.10 Considered doubtful 116.34 115.35 119.35 115.45 Less : Provision for doubtful claims recoverable 116.34 3.01 115.35 0.10 (vi) Advances to Board of Trustees, MECON Employees 138.97 429.12 Gratuity Fund $ (vii) Liquidated Damages Recovered by Clients Unsecured, considered good - - Considered doubtful 249.67 166.64 249.67 166.64 Less : Provision for doubtful liquidated 249.67 - 166.64 - damages recovered (viii) Payment against Income Taxes (Net) $ 5,830.35 2,807.45 (ix) Payment against Sales Tax / VAT $ 10.00 10.00 TOTAL 7,181.45 4,666.80 $ Unsecured, considered good # Secured against bank guarantee / materials supplied / work done, as the case may be
A house of engineering excellence ...aiming beyond 109 MECON Limited
NOTE 16 : OTHER NON-CURRENT ASSETS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Long-Term Trade Receivables Unsecured, considered good 10,089.98 7,384.99 Considered doubtful 3,988.60 4,048.75 14,078.58 11,433.74 Less : Provision for bad and doubtful trade receivables 3,988.60 10,089.98 4,048.75 7,384.99 (b) Others (i) Bank Balances 1.00 6,501.00 Fixed deposits with more than 3 months maturity which are due for maturity beyond 12 months from balance sheet date ► Bank Balances include amounts held as security deposit 1.00 1.00
(ii) Interest accrued but not due 14.52 32.56 (iii) EMD, SD and Advance in Dispute 700.76 700.76 Less : Provision for EMD, SD and Advance 700.76 - 700.76 - TOTAL 10,105.50 13,918.55
NOTE 17 : INVENTORIES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Stores and Spares 98.47 82.61 (b) Printing and Stationery 34.81 39.98 (c) Computer Consumables 19.92 153.20 14.30 136.89 Valued as per Accounting Policy (NOTE 32, Sl.No.7) TOTAL 153.20 136.89
NOTE 18 : JOBS-IN-PROGRESS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 Jobs-in-Progress for Consultancy Services 627.27 788.74 Valued as per Accounting Policy (NOTE 32, Sl.No.11) Less : Provision for Stagnant Jobs 13.71 613.56 47.47 741.27
TOTAL 613.56 741.27
The value of Jobs-in-Progress as on 31.03.2017 includes `137.62 lakhs (Previous Year `160.12 lakhs) for few non-moving jobs against which substantial payments have been received by the company. Therefore, no provision is made against value of such jobs. However, necessary provision is made against non-moving jobs where payment received is less than the value of Jobs-in-Progress as on 31.03.2017.
110 44th Annual Report 2016-17
NOTE 19 : TRADE RECEIVABLES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 Trade Receivables outstanding for a 2,540.31 2,486.68 period exceeding six months from the date they are due for payment Others 15,654.76 18,195.07 14,836.55 17,323.23
a) Unsecured, considered good 18,195.07 17,323.23 b) Considered doubtful - - 18,195.07 17,323.23 Less : Provision for bad and doubtful trade receivables - 18,195.07 - 17,323.23
TOTAL 18,195.07 17,323.23
NOTE 20 : CASH AND BANK BALANCES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Cash & Cash Equivalents i) Cash & Stamps on hand 16.88 15.46 ii) Cheques & Drafts on hand - - iii) Cash at Bank (Current & Flexi 216.21 233.09 127.69 143.15 Deposit A/c) (b) Other Bank Balances Fixed Deposits with more than 3 months maturity which are due for maturity within 12 months from balance sheet date 54,810.00 55,043.09 53,800.56 53,943.71 Other Bank Balances include amounts earmarked /available for specified purposes as under: i) CSR and SD Expenditure 498.39 565.69 ii) Research & Development 135.46 135.46 Expenditure Other Bank Balances include 7,250.00 7,300.00 amounts held as margin money & security under lien against borrowings, etc. Other Bank Balances include 6,500.00 10,750.00 Deposits with more than 12 months maturity TOTAL 55,043.09 53,943.71
A house of engineering excellence ...aiming beyond 111 MECON Limited
NOTE 21 : SHORT TERM LOANS AND ADVANCES (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016 (a) Loans and Advances to related parties - - (b) Other Loans and Advances (i) Advances to Contractors $ 9.12 5.72 (ii) Advance to Suppliers and Sub-Contractors Secured, considered good # 772.12 785.33 Unsecured, considered good 27.66 799.78 4.29 789.62 (iii) Advance to Employees Secured, considered good ## 0.02 0.02 Unsecured, considered good 234.04 234.06 359.58 359.60 (iv) Advance to Others & Canteen $ 18.79 26.99 (v) Prepaid Expenses $ 14.03 7.07 (vi) Deposit with Others Unsecured, considered good 174.05 366.78 Considered Doubtful 0.84 0.84 174.89 367.62 Less : Provision for Doubtful Deposit with Others 0.84 174.05 0.84 366.78 (vii) Claims Recoverable Unsecured, considered good 156.35 127.93 Considered Doubtful 20.61 20.61 176.96 148.54 Less : Provision for Claims Recoverable 20.61 156.35 20.61 127.93 (viii) Liquidated Damages Recovered by Clients Unsecured, considered good - - Considered Doubtful 121.00 121.00 121.00 121.00 Less : Provision for doubtful liquidated damages recovered 121.00 - 121.00 - (ix) Payment against Income Taxes (Net) $ 2,715.17 2,731.03 (x) Payment against Sales Tax / VAT (Net) $ 1,106.10 1,049.55 (xi) VAT Credit Receivable (INPUT) $ 39.47 63.25 (xii) OUTPUT VAT Receivable Unsecured, considered good 23.40 30.65 Considered Doubtful 19.96 19.96 43.36 50.61 Less : Provision for Output VAT Receivable 19.96 23.40 19.96 30.65 (xiii) VAT/CST Receivable Unsecured, considered good 93.72 92.27 Considered Doubtful 400.94 371.87 494.66 464.14 Less : Provision for VAT Receivable 400.94 93.72 371.87 92.27 (xiv) Service Tax Receivable Unsecured, considered good 2,869.89 2,546.83 Considered Doubtful 602.22 536.05 3,472.11 3,082.88 Less : Provision for Service Tax Receivable 602.22 2,869.89 536.05 2,546.83 TOTAL 8,253.93 8,197.29 $ Unsecured, considered good # Secured against Bank Guarantee / Materials Supplied / Work done, as the case way be ## Secured against buildings & Vechiles.
112 44th Annual Report 2016-17
NOTE 22 : OTHER CURRENT ASSETS (` in lakhs) Particulars AS ON 31.03.2017 AS ON 31.03.2016
(a) Interest accrued but not due 1,175.45 1,683.13
(b) Other Receivables 848.08 750.02
TOTAL 2,023.53 2,433.15
NOTE 23.1 : REVENUE FROM OPERATIONS (` in lakhs)
Particulars 2016-17 2015-16
(a) Revenue from Consultancy Services 26,176.23 21,494.72
(b) Revenue from Construction Contracts 8,116.68 10,232.97
(c) Other Operating Revenue
(i) Provision no longer required written back (Direct) 605.71 1,034.98
(ii) Others 10.25 22.34
TOTAL 34,908.87 32,785.01
NOTE 23.2 : GROSS INCOME DERIVED FROM SERVICES RENDERED [Refer Note 23.1(a) and Note 23.1(b)] (` in lakhs) Particulars 2016-17 2015-16
(a) Engineering, Technical Consultancy, Project Management Services, etc. 26,089.94 21,273.11 - Domestic
(b) Engineering, Technical Consultancy, Project Management Services, etc. 86.29 221.61 - Foreign [Refer Note-35.18]
(c) Execution of Construction Contracts/EPC Contracts including Supply of 8,116.68 10,232.97 Equipment & Components, etc.
TOTAL 34,292.91 31,727.69
A house of engineering excellence ...aiming beyond 113 MECON Limited
NOTE 24 : OTHER INCOME (` in lakhs) Particulars 2016-17 2015-16
(a) Interest Income
(i) Interest from Bank (Tax deducted at Source 4,419.22 5,609.11 ` 428.01 lakhs) (CPLY ` 561.46 lakhs)
(ii) Interest on Advances to Employees for 1.29 0.41 Conveyance and House Building
(iii) Interest from Income Tax Department and Others 7.09 -
(b) Dividend Income from Non-Current Investment 1.06 1.06
(c) Other Non-Operating Income
(i) Profit on Sale / Disposal of Fixed Assets 2.20 1.16
(ii) Income from Township 1,013.51 1,417.10
(iii) Provision no longer required written back 197.63 2.36
(iv) Revaluation Reserve written back - 24.64
(v) Miscellaneous Income 147.50 145.82
TOTAL 5,789.50 7,201.66
NOTE 25 : PURCHASE OF EQUIPMENTS & DIRECT EXPENSES (` in lakhs) Particulars 2016-17 2015-16 (a) Purchase of Equipments & Components for execution of jobs 5,393.75 5,581.10 (b) Expenses on Sub-Contractors & Others for execution of jobs 3,270.16 6,247.91 (c) Provision for Expenses & Contractual Obligations for execution of jobs 2,681.62 2,935.03 TOTAL 11,345.53 14,764.04
114 44th Annual Report 2016-17
NOTE 26 : (ACCRETION) / DECRETION TO JOBS-IN-PROGRESS (` in lakhs) Particulars 2016-17 2015-16 (a) Opening Jobs-in-Progress (Consultancy) 788.74 551.95 (b) Closing Jobs-in-Progress (Consultancy) 627.27 788.74 TOTAL 161.47 (236.79)
NOTE 27 : EMPLOYEE BENEFIT EXPENSES
(` in lakhs)
Particulars 2016-17 2015-16 (a) Salaries & Wages - Salary and Allowances 17,386.26 17,124.95 - Leave Encashment 2,084.22 2,416.99 - Perks and Allowances 3,872.75 6,492.99 - Bonus 7.59 11.73 - Superannuation Benefits 2,561.49 1,804.08 Sub-Total 25,912.31 27,850.74
(b) Company's Contribution to Provident and Other Fund 2,178.03 2,140.92 (c) Staff Welfare Expenses - Education 3.67 2.35 - Medical 620.67 529.29 - Social & Cultural Activities 54.85 102.74 - Rent (Residential) - 0.39 - Group Insurance Premium 34.71 44.22 - Staff Welfare (Others) 374.09 405.98 Sub-Total 1,087.99 1,084.97
TOTAL (a)+(b)+(c) 29,178.33 31,076.63
A house of engineering excellence ...aiming beyond 115 MECON Limited
NOTE 28 : FINANCE COSTS (` in lakhs) Particualrs 2016-17 2015-16 (a) Interest Expenses i) Interest on Loan from Banks 90.99 121.11
TOTAL (a) 90.99 121.11 (b) Other Borrowing Costs i) Bank Charges 17.81 19.86 ii) Bank Guarantee Commission 47.88 50.37 TOTAL (b) 65.69 70.23
TOTAL (a) + (b) 156.68 191.34
NOTE 29 : DEPRECIATION AND AMORTISATION EXPENSES (` in lakhs) Particulars 2016-17 2015-16
a) Depreciation 895.53 792.90 b) Amortisation 76.83 97.90 TOTAL (a) + (b) 972.36 890.80
116 44th Annual Report 2016-17
NOTE 30 : OTHER EXPENSES (` in lakhs) Sl.No Particulars 2016-17 2015-16 1. Expenses on Foreign Experts - - 2. Travelling Expenses 1,799.99 1,694.69 3. Foreign Deputation 299.90 257.36 4. Maintenance & Repairs to Buildings 1,200.57 1,458.63 5. Repairs (Others) 96.88 65.55 6. Stores & Spares consumed 102.15 260.43 7. Printing & Stationery consumed 121.47 96.97 8. Expenses on Computer Consumables 74.06 63.60 9. Rent (Non-residential) 307.16 300.03 10. Rates & Taxes 46.90 48.60 11. Advertisement & Publicity 402.78 271.25 12. Payment to Auditors : - As Statutory Auditor 3.00 3.00 - For Tax Audit Matters 0.48 0.48 - For Quarterly Audit 1.80 1.80 - For reimbursement of expenses 2.81 8.09 3.60 8.88 13. Insurance 3.70 5.13 14. Training Expenses : - Inland 59.22 79.78 - Foreign - 59.22 - 79.78 15. Postage,Telephones & Telegraphs 149.30 138.46 16. Computer Services 116.80 87.76 17. Power and Fuel 515.24 503.52 18. Legal & Professional Charges 34.27 61.38 19. Assets Charged to Revenue 1.55 1.42 20. Other Administrative and Misc. Expenses 957.07 922.67 21. Fees Withdrawn 9.21 6.14 22. Expenses on CSR and Sustainable Development 55.93 199.37 23. Expenses on Research & Development 400.00 110.14 24. Loss on Sale / Disposal of Fixed Assets 13.55 4.63 25. Provisions - Provision for Claims Recoverable 1.00 62.99 - Provision for Bad & Doubtful Debts 198.25 808.91 - Provision for LD Recovered by Clients 83.53 41.20 - Provision for Doubtful Deposit with Others - 1.14 - Provision for Doubtful Advances to Suppliers 0.06 19.92 - Provision for Earnest Money Deposit 20.59 - - Provision for Service Tax Receivable 113.39 271.36 - Provision for Stagnant Jobs 188.20 1,329.67 - Provision for Stagnant Jobs-in-Progress 3.65 - - Provision for VAT / Cess Receivable 47.35 183.38 - Provision for Doubtful ITDS Credit 56.84 12.08 - Provision for Doubtful STDS Credit 4.57 16.56 - Provision for Misc. Deduction by Clients 176.80 859.79 - Provision for Disputed Cases - 527.14 TOTAL 7,670.02 10,780.53
NOTE 31 : PRIOR PERIOD ITEMS (` in lakhs) Sl. No. Particulars 2016-17 2015-16 1. Revenue from Operations - (9.60) 2. Other Income - 0.19 3. Depreciation Expenses 28.24 0.01 NET DEBIT / (CREDIT) 28.24 (9.40)
A house of engineering excellence ...aiming beyond 117 MECON Limited
NOTE 32 : SIGNIFICANT ACCOUNTING POLICY
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS 1.1 The financial statements are prepared under the historical cost concept on accrual basis of accounting in accordance with generally accepted accounting principles in India and provisions of the Companies Act 2013 / 1956 as applicable and accounting standards as notified / amended there under from time to time.
2. uSE OF ESTIMATES 2.1 In preparing the financial statements in conformity with accounting principles generally accepted in India, the company makes best estimates and assumptions that may affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as at the reporting date and the amount of revenue and expenses during the reporting period. Actual result in some cases may differ from those estimates. Any revision of such estimates is recognised during the period in which the same is determined.
3. CURRENT / NON-CURRENT ASSETS & LIABILITIES 3.1 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. 3.2 Normal operating cycle of the company is considered 12 months keeping in view past experience and nature of business of the company. 3.3 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. 3.4 Dues on account of goods purchased or services received in the normal course of business are treated as Trade Payables.
4. FIXED ASSETS 4.1 Items of Property, Plant and Equipment are carried at cost including expenses incidental to acquisition, installation etc. less accumulated depreciation and accumulated impairment losses. 4.2 Items of Property, Plant and Equipment purchased during the year costing upto `1,000/- each are charged to revenue. 4.3 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. However, expenditure incurred on acquisition of software (including ERP), which is not an integral part of related hardware, is treated as intangible assets. 4.4 Items of Property, Plant and Equipment retired from active use and held for disposal are shown separately at lower of their carrying amount and net realizable value. 4.5 Items of Property, Plant and Equipment held under Lease is recognized as per AS -19.
118 44th Annual Report 2016-17
5. DEPRECIATION & AMORTISATION
A. Property, Plant and Equipment 5.1 Depreciation on Property, Plant and Equipment is provided for under “Straight-Line Method”. After considering residual value of 5% of the original cost of the Property, Plant and Equipment, the depreciable amount is depreciated over the useful life of the Property, Plant and Equipment and in the manner prescribed in Schedule II of the Companies Act, 2013 and relevant rules as applicable. 5.2 Property, Plant and Equipment costing above `1,000/- each and up to `5,000/- each are fully depreciated in the year of acquisition. 5.3 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. 5.4 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.
B. Intangible Assets 5.5 Expenditure incurred on acquisition of technical know-how and engineering materials is treated as intangible assets and is amortised over a period of five years. 5.6 Expenditure incurred on acquisition of software is amortised over a period of five years from the year of acquisition or its license period, whichever is less. However, software individually costing upto `5,00,000/- is fully amortised in the year of acquisition.
6. INVESTMENTS 6.1 Investments are classified as current and non-current as per requirement of Companies Act, 2013, as applicable. Non-current investments are classified as trade investment and other investment as per requirement of Companies Act, 2013, as applicable. 6.2 Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, in the value of long term investment, the carrying amount is reduced to recognise the decline on individual investment basis. 6.3 Current investments are carried at lower of cost and fair value on individual investment basis.
7. INVENTORIES 7.1 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 are not considered as inventory when it is required to be capitalized as per AS-10.
8. ENGINEERING RESEARCH & DEVELOPMENT 8.1 Expenditure incurred on Engineering Research and Development activities are charged to revenue in the relevant years.
A house of engineering excellence ...aiming beyond 119 MECON Limited
9. FOREIGN CURRENCY TRANSLATION 9.1 All Current Assets and Current Liabilities are translated at the relevant rates of exchange prevailing at the year end and the translation differences are recognised in the profit and loss account.
10. INCOME RECOGNITION 10.1 Engineering & Consultancy Services 10.1.1 Income 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 recognised on the basis of technical estimate of percentage of progress achieved at the end of the financial year considering the pre-determined threshold limit on the basis of value of respective jobs. The actual progress is taken after deducting 10% in such cases and this 10% is taken into account in the year in which 100% progress is achieved. 10.1.2 Income from services rendered other than lump sum fee basis (including reimbursable jobs) is recognised at 100% value of the invoices raised for the services rendered during the financial year. Where the invoice is settled / admitted by the client during the year, income is recognised upto the amount settled/admitted. 10.2 Execution of Projects 10.2.1 Income from execution of projects (including sale of spares) for the clients against contracts or letters of Intent or work orders or exchange of letters which stipulate fixed price is recognised on the basis of percentage of progress achieved during the financial year. 10.2.2 Income on account of escalation, additional or extra claims and other miscellaneous items like project insurance claims is recognised at 100% value as and when they are admitted. Where escalation in price is provided in the contract with specific guidelines the same is recognised as accrued during the financial year as per the provisions of the contract. 10.3 Others 10.3.1 Dividend income from Investments is recognised as and when the right to receive the payment is established.
11. JOB-IN-PROGRESS 11.1 For lump sum fee Engineering & Consultancy jobs, where the progress achieved in respect of a job is below the pre-determined threshold limit, lower of cost or value of the work done, computed on the basis of technical estimate of the percentage of progress achieved, is carried forward under Job-in-Progress. 11.2. 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. However, in cases where minimum undisputed terms are agreed to by the client, income is accounted for on the basis of such undisputed terms.
12. EMPLOYEE BENEFITS 12.1 All short term employee benefits are recognised at their undiscounted amount in the reporting period in which they are incurred. 12.2 Employee benefits under defined contribution plans comprising Pension Scheme, Post-Retirement Medical Benefit Scheme are recognised and charged to revenue on the basis of actual liability.
120 44th Annual Report 2016-17
12.3 Employee benefits under defined benefit plans comprising PF, Gratuity, Leave Encashment etc. are recognised based on the actuarial valuation as at the end of the reporting period and charged to revenue with actuarial gains/losses as per AS-15 (Revised). 12.4 Expenditure on termination benefits (Voluntary Retirement Compensation) is charged to revenue in the period in which it is incurred.
13. PRIOR PERIOD 13.1 Any expenditure or income of ` 10,000/- and above 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 prior period items. However, depreciation relating to earlier years is treated as a prior period item irrespective of the amount of depreciation.
14. PROVISION FOR CONTRACTUAL OBLIGATIONS/LD, ETC. 14.1 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. 14.2 Provisions for liquidated damages are made as and when these are deducted and/or considered deductible by the client as per contract. 14.3 Suppliers’/contractors’ claims for price escalation, additional or extra claims, etc. are accounted for to the extent such claims are accepted by the company.
15. IMPAIRMENT OF ASSETS 15.1 The company reviews the carrying amount of its fixed 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 estimated fair value of assets. 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.
16. TAXES ON INCOME 16.1 Current tax is determined as the amount of tax payable in respect of taxable income for the reporting period. Deferred tax is recognised on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date.
17. BORROWING COST 17.1 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. Other borrowing costs are recognized as expense in the period in which these are incurred.
A house of engineering excellence ...aiming beyond 121 MECON Limited
NOTE 33 : CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) (` in lakhs) Particulars 2016-17 2015-16 33.1 Contingent Liabilities i) Claims against Company under liquidated damage clause by the Clients. NIL NIL ii) Income tax in dispute / under appeal 605.86 802.91 iii) Sales tax demands pending appeals with Appellate Authorities. 1,913.77 1,287.26 iv) Claims against Company by Contractors/Suppliers, etc pending final decision. 8,720.19 4,870.16 v) Claims against Company for electricity supply by Jharkhand Urja Vikas 1,958.93 1,958.93 Nigam Limited (JUVNL) in dispute `2486.07 lakhs. Out of this, `527.14 lakhs is paid / provided in accounts pending final decision during the FY 2015-16 vi) The Regional Provident Fund Commissioner-II, Jharkhand, Ranchi ordered for 322.91 322.91 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. vii) Interest on arrear perks and allowances in respect of the executive employees 4129.82 3575.48 as determined upto 31.03.2017 following order no. O.A. 350/00191/2014 dated 15.02.2016 passed by the Central Administrative Tribunal, Calcutta Bench, pending final decision. 33.2 Commitments Estimated amount of contracts/orders remaining to be executed/supplied on 136.35 1304.64 capital account and not provided for
NOTE 34 : PROPOSED DIVIDEND (` in lakhs) Particulars 2016-17 2015-16 Proposed dividend on equity shares Total dividend (` in lakhs) NIL NIL Dividend per share (`) NIL NIL
122 44th Annual Report 2016-17
NOTE 35 : ADDITIONAL INFORMATION AND OTHER DISCLOSURES (` in lakhs) Particulars 2016-17 2015-16
35.1 Letters of Credit opened with Bankers for purchase of NIL 118.43 equipment & components and technical services.
35.2 Guarantees given by Banks for and on behalf of the 17,239.63 16,519.38 Company to different clients etc.
35.3 Earnings in Foreign Exchange 86.29 221.61 Fees for services rendered.
35.4 Expenditure in Foreign Currency (i) Professional and Consultation Fees 104.67 528.03 (ii) Other matters 136.37 241.04 174.18 702.21
35.5 Value of Imports (Calculated on CIF basis) (i) Equipment, components & spares parts used in 139.92 11.14 construction contract (ii) Capital goods 11.52 151.44 NIL 11.14
35.6 (i) Expenses on Advertisement & Publicity a) Advertisement 13.10 13.83 b) Publicity 34.23 47.33 50.74 64.57
(ii) Expenses on Public Relation Establishment 47.79 42.22
35.7 Expenses on Engineering, Research & Development Wing / establishment, including capital assets a) Salary & Wages, etc. 76.57 114.92 b) Expenses out of R&D Fund NIL 76.57 NIL 114.92
35.8 Particulars of remuneration of whole time Directors including Managing Director : (i) Salaries & Allowances 117.01 123.13 (ii) Company’s Contribution to Provident Fund and 20.10 137.11 22.64 145.77 Other Benefits
(iii) Employee Benefits (P.V. of DBO as per actuarial 73.20 124.08 valuation) Remuneration excludes medical facilities provided at Company's hospital, monetary value of which is not ascertainable.
A house of engineering excellence ...aiming beyond 123 MECON Limited
35.9 : PARTICULARS OF PROVISIONS (` in lakhs)
Provision for Provision Provision Provision Provision Provision for Disputed Cas- Provision for for Provision for doubtful for Miscell- es, Stagnant Provision for Bad & Liquidated Doubtful for Doubtful advances PARTICULARS Claims aneous jobs, EMD, for Bonus Doubtful Damages Earnest Deposit to suppliers/ Recover- Deductions SD advances, Debts recovered Money with Others sub- able by Clients output VAT by Clients Deposit contractors receivable, etc Opening 11.73 4,048.75 287.63 135.95 6.85 86.64 361.73 3,048.68 8,214.22 Balance as on (3.47) (3,658.75) (255.68) (72.96) (6.85) (85.50) (442.00) (2,386.31) (6,002.63) 01.04.2016 Add: Provision 7.01 198.25 83.53 1.00 20.59 NIL 0.06 176.80 414.00 made during (11.73) (808.91) (41.20) (62.99) (NIL) (1.14) (19.92) (859.79) (2,340.19) the period Less: 3.33 1.90 0.49 NIL NIL NIL NIL NIL 2.12 Provision (3.47) (16.40) (NIL) (NIL) (NIL) (NIL) (NIL) (32.40) (2.91) utilised during the period Less: Unused 4.84 256.50 NIL NIL NIL NIL NIL 99.77 116.90 provision (NIL) (402.51) (9.25) (NIL) (NIL) (NIL) (100.19) (165.02) (125.69) reversed during the period Closing 10.57 3,988.60 370.67 136.95 27.44 86.64 361.79 3,125.71 8,509.20 Balance (11.73) (4,048.75) (287.63) (135.95) (6.85) (86.64) (361.73) (3,048.68) (8,214.22) as on 31.03.2017 Figures in bracket relates to previous year
35.10 : DISCLOSURE UNDER ACCOUNTING STANDARD-7 ON “CONSTRUCTION CONTRACTS” (` in lakhs) Particulars 2016-17 2015-16 i) Contract Revenue recognized as revenue for the period 34,292.91 31,727.69 [Refer Note 23.2] ii) Contract costs incurred and recognized profits 366,925.18 4,66,110.39 (Less recognized losses) upto the reporting date iii) Advances received 13,842.76 13,038.05 iv) Gross amount due from customers for contract work 36,319.22 32,649.98 v) Gross amount due to customers for contract work 7,498.66 6,404.08
124 44th Annual Report 2016-17
35.11 : DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON "EMPLOYEE BENEFITS"
A. Defined Benefit Scheme
Gratuity : Payable on separation @ 15 days salary for each completed year of service to eligible employees who render continuous service of 5 years or more, subject to a maximum limit of ` 10.00 lakhs.
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. Encashment of accumulated earned leave is also allowed upto 30 days once in a calendar year.
Provident Fund: 12% of Basic Pay & Dearness Allowance contributed to the Provident Fund Trust by the Company.
Post Retirement Medical Benefits : Available to retired employees 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 Settlement Benefits: Payable to retiring employees for settlement upto their home town.
Employees' Family Benefit Scheme: Monthly payments to disabled separated employees/legal heirs of 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.
A house of engineering excellence ...aiming beyond 125 MECON Limited
B. Reconciliation of Present Value of Defined Benefit Obligation (DBO) (` in lakhs) 1 2 3 4 5 6 7 8 Post Post Employee Long Leave Retirement Retirement Family Retirement LTC/ Sl. Particulars Gratuity Service Encashment Medical Settlement Benefit Gift LTA Award Benefits Benefits Scheme P.V. of DBO (Opening) 5,267.13 10,510.42 577.41 174.79 172.76 24.58 18.12 78.00 P.V. of DBO (Opening)(Previous Year) 5,579.99 9,473.12 545.14 181.25 174.92 24.41 16.63 85.72 1 Current Service Cost 141.72 725.06 - 9.80 - 1.38 2.05 - Current Service Cost (Previous Year) 144.23 638.19 - 9.71 - 1.31 2.06 - 2 Interest Cost 394.28 767.28 43.98 13.18 11.69 1.85 1.41 5.48 Interest Cost (Previous Year) 403.72 671.34 41.18 13.18 11.78 1.77 1.29 5.91 3 Contributions made ------Contributions made (Previous Year) ------4 Actuarial Loss/ (Gain) 150.22 591.88 171.56 0.70 122.27 (2.43) (1.28) 2.71 Actuarial Loss/ (Gain) (Previous Year) 169.74 1,107.46 25.32 (21.23) 44.21 (2.23) (1.78) 17.94 5 Plan Amendments ------Plan Amendments (Previous Year) ------6 Curtailment loss / (gain) ------Curtailment loss/ (gain) (Previous Year) ------7 Premium Paid (9.97) ------Premium Paid (Previous Year) (9.70) ------8 Past Service Cost - - 768.81 - - - - - Past Service Cost (Previous Year) ------9 Benefit Paid (644.51) (886.87) (78.12) (10.17) (60.39) (0.17) - (5.67) Benefit Paid (Previous Year) (1,020.85) (1,379.69) (34.23) (8.12) (58.15) (0.68) (0.08) (31.57) 10 P.V. of DBO (Closing) 5,298.87 11,707.77 1,483.64 188.30 246.33 25.21 20.30 80.52 P.V. of DBO (Closing) (Previous Year) 5,267.13 10,510.42 577.41 174.79 172.76 24.58 18.12 78.00 Experience Gain/(Loss) adjustments (103.65) (5.99) 77.00 (9.16) 117.24 (3.75) (2.18) 0.64 on Plan Liabilities as on 31.03.2017 Experience Gain/(Loss) adjustments 189.16 608.77 (6.95) (28.31) 44.59 (4.22) (1.65) 18.22 on Plan Liabilities as on 31.03.2016 Experience Gain/(Loss) adjustments (109.59) 49.00 36.29 (21.17) 38.69 (5.01) (1.02) 7.22 on Plan Liabilities as on 31.03.2015 Experience Gain/(Loss) adjustments 42.56 (3,169.00) (17.50) (17.78) 84.48 2.52 (2.26) 21.73 on Plan Liabilities as on 31.03.2014 Experience Gain/(Loss) adjustments (503.06) 162.49 (8.90) (18.91) 41.66 (0.87) (2.49) 11.50 on Plan Liabilities as on 31.03.2013
126 44th Annual Report 2016-17
(` in lakhs) 1 2 3 4 5 6 7 8 Post Post Long Leave Retirement Retirement Retirement LTC/ Sl. Particulars Gratuity EFBS Service Encashment Medical Settlement Gift LTA Award Benefits Benefits Experience Gain/(Loss) adjustments (1.68) ------on Plan Assets as on 31.03.2017 Experience Gain/(Loss) adjustments (50.01) ------on Plan Assets as on 31.03.2016 Experience Gain/(Loss) adjustments (13.78) ------on Plan Assets as on 31.03.2015 Experience Gain/(Loss) adjustments (40.56) ------on Plan Assets as on 31.03.2014 Experience Gain/(Loss) adjustments 1.81 ------on Plan Assets as on 31.03.2013
C. 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 As on As on As on As on 31.03.2017 31.03.2016 31.03.2015 31.03.2014 31.03.2013 1 F.V. of Plan Assets (Opening) 5,475.50 6,004.80 6,334.49 6,503.62 6,765.04 2 Expected return on Plan Assets (Net) 425.89 510.53 546.34 569.10 586.50 3 Benefit Payment (624.83) (1,009.82) (862.25) (712.67) (864.73) 4 Contributions made - 20.00 - 15.00 15.00 5 Actuarial (Loss)/ Gain (1.68) (50.01) (13.78) (40.56) 1.81 6 F.V. of Plan Assets (Closing) 5,274.88 5,475.50 6,004.80 6,334.49 6,503.62 7 P.V. of D.B.O. (Closing) 5,298.87 5,267.13 5,580.01 5,586.47 6,007.91 Net liability / (assets) recognised in 23.99 (208.37) (424.79) (748.02) (495.71) the Balance Sheet
The Company expects to contribute the amount to the Gratuity Fund during the Year 2017-18 after considering liability and fund position.
A house of engineering excellence ...aiming beyond 127 MECON Limited
D. 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.
E. Expenses recognised in Statement of Profit & Loss for the year ended 31st March, 2017 (` in lakhs)
1 2 3 4 5 6 7 8 Post Post Employee Long Leave Retirement Retirement Family Retirement LTC/ Sl. Particulars Gratuity Service Encashment Medical Settlement Benefit Gift LTA Award Benefits Benefits Scheme 1 Current Service Cost 141.72 725.06 - 9.80 - 1.38 2.05 - Current Service Cost (Previous Year) 144.23 638.19 - 9.71 - 1.31 2.06 - 2 Interest Cost 394.28 767.28 43.98 13.18 11.69 1.85 1.41 5.48 Interest Cost (Previous Year) 403.72 671.34 41.18 13.18 11.78 1.77 1.29 5.91 3 Actuarial Loss/ (Gain) 151.90 591.88 171.56 0.70 122.27 (2.43) (1.28) 2.71 Actuarial Loss/ (Gain) (Previous Year) 219.75 1,107.46 25.32 (21.23) 44.21 (2.23) (1.78) 17.94 4 Past Service Cost - - 768.81 - - - - - Past Service Cost (Previous Year) ------5 Plan Amendments ------Plan Amendments (Previous Year) ------6 Curtailment loss / (gain) ------Curtailment loss / (gain) ------(Previous Year) 7 Expected Return on Plan Assets (435.86) ------Expected Return on Plan Assets (520.23) ------(Previous Year) Total 252.04 2,084.22 984.35 23.68 133.96 0.80 2.18 8.19 Total (Previous Year) 247.47 2,416.99 66.50 1.66 55.99 0.85 1.57 23.85 Actual return on plan assets 434.18 ------Actual return on plant assets 470.22 ------(Previous Year)
128 44th Annual Report 2016-17
F. Actuarial Assumptions 2016-17 2015-16 1 Discount Rate (per annum) --- 7.30% 8.00% 2 Mortality Rate --- Indian Assured Lives Mortality Indian Assured Lives Mortality (2006-08) Ultimate (2006-08) Ultimate 3 Withdrawal Rate (per --- 0.10% to 0.50% depending on age 0.10% to 0.50% depending on age annum) group. 10% flat at all age groups group. 10% flat at all age groups for Contract Employees for Contract Employees 4 Medical Inflation Rate (per --- 12% for first 5 years and thereafter 12% for first 5 years and thereafter annum) 8% 8% 5 Expected rate of return on --- 8.35% - 9.5% 8.45% - 9.5% Plan Assets (per annum) 6 Salary Escalation (per annum) --- 16% on Basic Pay 16% on Basic Pay The estimate of future salary increase considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors.
G. Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post-retirement medical benefit scheme: (` in lakhs) Sl. Particulars One percentage point One percentage point No. increase in medical decrease in medical inflation rate inflation rate 1 Increase/(decrease) on aggregate service cost and 10.60 (9.13) interest cost of post retirement medical benefits 2 Increase/(decrease) on present value of post retirement 145.23 (125.13) benefit obligations as at 31st March, 2017
H. Defined Contribution Scheme
i) 10% of Basic Pay & Dearness Allowance for executives to be contributed by the Company w.e.f. 01.01.2007. Post Retirement Pension Benefits ii) 6% of Basic Pay (Revised) & Dearness Allowance for non-executives to be contributed by the Company w.e.f. 01.01.2012.
I. Expenses recognised in Statement of Profit & Loss for the year (` in lakhs)
Particulars Post Retirement Pension Benefits 2016-17 2015-16
Expenses charged to Statement of Profit and Loss 1,577.14 1,550.19
A house of engineering excellence ...aiming beyond 129 MECON Limited
35.12 : DISCLOSURE UNDER ACCOUNTING STANDARD-18 ON “RELATED PARTY DISCLOSURES”
i) The list of Related Parties and their relationships are given below:
Nature of Relationship Name of the Related Parties Key Management Personnel Shri Atul Bhatt (w.e.f. 01.10.2016) Shri A. K. Tyagi (upto 30.09.2016) Shri S. Chattopadhyay Shri P. K. Sarangi (w.e.f. 01.01.2017) Shri Gautam Chatterjee (w.e.f. 20.03.2017) Shri D. Dutta (upto 31.10.2016) Shri S. R. Sengupta (upto 31.12.2016) Shri A. P. Singh (upto 31.12.2016) Shri Saraswati Prasad, IAS (w.e.f. 08.02.2017) Smt Bharathi S. Sihag, IAS (upto 30.11.2016) Shri Syedain Abbasi, IAS Shri Sisir Kumar Appikatla
Nature of Relationship Name of the Related Party Joint Venture Company M/s. Metallurgical & Engineering Consultants (Nigeria) Limited
ii) The details of transactions between the Company and the Related Parties are given below: (` in lakhs)
Sl. Nature of transactions Key Management Personnel Joint Venture No.
2016-17 2015-16 2016-17 2015-16
a) Managerial Remuneration 137.11 145.77 - -
b) Employee Benefits (P.V. of DBO as 73.20 124.08 - - per actuarial valuation)
c) Sitting Fees 1.10 0.40 - -
130 44th Annual Report 2016-17
35.13 : DISCLOSURE UNDER ACCOUNTING STANDARD-19 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 year an amount of `318.59 lakhs (PY `306.18 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 year an amount of `103.33 lakhs (PY `91.45 lakhs) has been accounted for as rental income in respect of these cancellable leases.
35.14 : DISCLOSURE UNDER ACCOUNTING STANDARD-20 ON “EARNINGS PER SHARE” Calculation of Earnings Per Share : (` in lakhs) Sl. Particulars 2016-17 2015-16 No. a) Net Profit / (Loss) for the year ( ` in lakhs) (-) 8,384.35 (-)16,241.38 Less : Proposed Dividend on Preference Shares including NIL NIL Dividend Distribution Tax ( ` in lakhs) b) Net Profit / (Loss) for the year artibutable to Equity (-) 8,384.35 (-) 16,241.38 Shareholders ( ` in lakhs) c) Weighted average number of Equity Shares (Refer Note 1) 4,01,38,360 4,01,38,360 d) Earnings Per Share (Basic and Diluted) (b)/(c) (in ` ) (-) 20.89 (-) 40.46 e) Face Value per share (in ` ) 10.00 10.00
35.15 : DISCLOSURE UNDER ACCOUNTING STANDARD-27 ON “FINANCIAL REPORTING OF INTEREST IN JOINT VENTURES” As per Accounting Standard-27 ‘Financial Reporting of Interest in 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)
Name of the Joint % of Company’s Assets Liabilities Income Expenditure Contingent Capital Venture Company Ownership Liabilities Commit- Interest ments 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 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.
A house of engineering excellence ...aiming beyond 131 MECON Limited
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. 35.16 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 31.03.2017 as per Accounting Standard -28. 35.17 In case of foreclosure of jobs, the fee settled by the client 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 30). 35.18 Owing to uncertainty, income from foreign consultancy jobs for the clients against contracts or letters of intent or work orders or exchange of letters, which stipulate fixed price, is recognized on the basis of amount received from the clients against work done. In such cases, the percentage progress method and threshold criteria are not applied. 35.19 In view of the legal opinion obtained on 6.11.90 by the Company from Solicitor General of India, disclosure of quantitative detail of sales, purchases, jobs in progress (both opening & closing) in respect of equipment & components are not required in respect of Companies rendering Consultancy & Supply Services. Further, in view of varieties of materials in different Projects, which cannot be categorized in different groups, it is not possible to list out quantitative details. 35.20 Payments against Supplies & Services from SSI Units are generally made in accordance with agreed credit terms and there is no overdue amount.
35.21 : Disclosure on R&D: (` in lakhs)
Particulars 2016-17 2015-16 Opening Balance of Fund 135.46 125.32 Add : Allocation / Provision made during the year NIL 10.14 Less : Adjustment / Utilisation made during the year NIL NIL Closing Balance of Fund 135.46 135.46 (Refer Note 20)
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.
35.22 : Disclosure on CSR: (` in lakhs)
Particulars 2016-17 2015-16 CSR Projects /Programmes, etc. 55.93 199.37 Others 11.37 21.71 Total Amount Spent 67.30 221.08 Amount unspent out of prescribed allocated sum during the year NIL NIL
132 44th Annual Report 2016-17
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 `483.14 lakhs as on 31.03.2017 (Previous Year `483.14 lakhs). 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 a sum of ` NIL (Previous Year `168.00 lakhs) is transferred from Surplus to CSR Activity Reserve. Unspent CSR amount carried forward under the head CSR Activity Reserve is `15.25 lakhs as on 31.03.2017 (Previous Year `82.55 lakhs).
35.23 : Disclosure on Specified Bank Notes (SBNs) : In compliance of notification no G.S.R. 308(E) dated March 30, 2017 issued by the Ministry of Corporate Affairs, Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016 is given below:
Particulars SBNs * Other denomination notes Total Closing cash in hand as on 08.11.2016 8,02,000.00 1,24,039.72 9,26,039.72 (+) Permitted receipts 1,63,500.00 85,31,095.00 86,94,595.00 (-) Permitted payments - (-) 72,67,439.00 (-) 72,67,439.00 (-) Amount deposited in Banks (-) 9,65,500.00 (-) 1,550.00 (-) 9,67,050.00 Closing cash in hand as on 30.12.2016 - 13,86,145.72 13,86,145.72
* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016. 35.24 Considering the principle of prudence and conservatism, Deferred Tax Asset is not recognized for taxable loss incurred / carried forward due to uncertainty in sufficient future taxable income. 35.25 During the year 2016-17, provision is made for ` 633.31 lakhs towards pay revision due w.e.f. 01.01.2017 based on information as available / applicable, etc. 35.26 Companies (Accounting Standards) Amendment Rules, 2016 have been issued by Ministry of Corporate Affairs vide notification dated 30.03.2016. Accordingly, accounting policy is changed by the company w.e.f. FY 2016-17 as applicable. The company has adopted cost model for recording the carrying amount of Property, Plant & Equipments each year from the FY 2016-17 in line with Accounting Standard -10 as notified / amended by Ministry of Corporate Affairs on 30.03.2016. Necessary accounting entry/ adjustment is made during the FY 2016-17 due to changes in accounting policy. Gross Block of Property, Plant and Equipment is reduced / adjusted by ` 2,629.62 lakhs, Provision for depreciation is reduced/ adjusted by ` 411.36 lakhs and Revaluation Reserve is reduced / adjusted by ` 2,218.26 lakhs. However, there is no material impact on the Net Profit / Loss due to changes in accounting policy.
A house of engineering excellence ...aiming beyond 133 MECON Limited
NOTE 35.27 : DISCLOSURE UNDER ACCOUNTING STANDARD-17 ON "SEGMENT REPORTING" BUSINESS SEGMENT (PRIMARY SEGMENT) REPORTING FOR 2016-17 (` In lakhs)
SEGMENTS METALS ENERGY INFRASTRUCTURE TOTAL Current Previous Current Previous Current Previous Current Previous Particular Year Year Year Year Year Year Year Year I. SEGMENT REVENUE a. Segment Revenue 18,517.16 23,099.16 11,702.74 7,150.86 4,073.01 1,477.67 34,292.91 31,727.69 II. SEGMENT RESULTS a. Segment Result (12,296.99) (18,114.93) 526.80 (4,027.69) (2,501.87) (2,789.72) (14,272.06) (24,932.34) [Profit/(Loss)] b. Unallocated Corporate - (219.38) Expenses c. Operating Profit/(Loss) (14,272.06) (24,712.96) d. Finance Costs 156.68 191.34 e. Interest Income 4,427.60 5,609.52 f. Income Taxes (429.91) (1,229.10) g. Non Operating Loss 13.55 4.63 h. Non Operating Income 1,361.90 1,592.14 i. Accretion / (Discretion) to (161.47) 236.79 Jobs-in-Progress j. Net Profit/(Loss) (8,384.35) (16,241.38) III. OTHER INFORMATION a. Segment Assets 30,389.99 30,554.46 11,157.84 5,991.00 5,930.92 5,467.18 47,478.75 42,012.64 b. Unallocated Corporate 67,870.52 73,774.72 Assets c. Total Assets 1,15,349.27 1,15,787.36 d. Segment Liabilities 50,091.50 46,115.17 9,155.42 5,972.79 9,470.59 9,365.50 68,717.51 61,453.46 e. Unallocated Corporate 31,494.41 28,593.94 Liabilities f. Total Liabilities 1,00,211.92 90,047.40 g. Non-Cash Expenses other 3,154.78 5,941.92 168.85 201.89 104.10 106.09 3,427.73 6,249.90 than Depreciation h. Capital Employed 9,528.65 18,123.57
134 44th Annual Report 2016-17
35.28 NOTES ON SEGMENT REPORT a) “Business Segments” have been identified as Primary Segments in accordance with the guidelines of “Accounting Standard-17” on Segment Reporting issued by ICAI considering the return/risk profiles of the businesses, the organisation structure and the management reporting system. b) As a part of business restructuring process, the core business activities of the organisation have been regrouped and classified from four “Strategic Business Units” (SBUs) to three “Strategic Business Units” (SBUs) in line with the recommendation of the Consultants w.e.f. 2016-17 as below: Segment Definitions: i) “Metals” includes Iron & Steel, Rolling Mills, Non-Ferrous, Raw Materials & Mining, Refractories etc. ii) “Energy” includes Renewable Energy, Power plant- Thermal & Hydel, Transmission & Distribution, RLA & RMU studies, Oil & Gas pipelines, Petro-chemical & Refineries, POL Depots, Retail Outlets etc. iii) “Infrastructure” includes Architecture & Town Planning, Ports & Material Handling, Roads, Highways, Bridges, & Flyovers, Defence, Environmental & Hydro engineering, Management Advisory Services, Information Technology etc. c) Segment Revenue comprises income from Construction Contracts and income from Engineering & Consultancy Services for the Jobs in India and abroad. d) Unallocated corporate expenditure includes expenses incurred on corporate services provided to Business Segments and other expenses not allocable on a reasonable basis to Business Segments. e) Disclosure of Information on Geographical Segment (Secondary Segment) is not made considering the risk and return of business activities / operations being carried out by the company which are not affected by the geographical conditions / locations of the Business Centres / Project Sites etc. f) 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. g) Fixed Assets (tangible and intangible) 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. 35.29 Amounts in the Financial Statements and Notes are rounded off to ` in lakhs with two decimal places, except for per share data and as otherwise stated. 35.30 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.
A house of engineering excellence ...aiming beyond 135 MECON Limited
FORM AOC - I
(Statement pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 relating to Associate Companies and Joint Ventures) Part “B”: Associates 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. Shares of Joint Ventures held by the company on the year end No. 5000 Amount of Investment in Joint Venture ` 7.60 lakhs Extend of Holding % 50%
3. Description of how there is significant Majority of the members of the Board of M/s Metallurgical & influence Engineering Consultants (Nigeria) Limited are also Directors/ Senior Managerial Personnel of MECON Limited.
4. Reason why the associate/joint venture Consolidation is not applicable for Joint Venture company. is not consolidated
5. Networth attributable to Shareholding (-) ` 309.94 lakhs (50%) as per latest audited Balance Sheet
6. 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/- (RAVI BAMBHA) (R. H. JUNEJA) COMPANY SECRETARY GENERAL MANAGER (FINANCE)
Sd/- (BIPUL RASTOGI) PARTNER Memb.No.072318 Firm Regn. No.000980C Sd/- Sd/- (S. CHATTOPADHYAY) (ATUL BHATT) DIRECTOR (PROJECT) CHAIRMAN and MANAGING DIRECTOR
Place : Ranchi Dated : 14.07.2017
136 lh,lvkj xfrfof/k;ksa dh >yfd;k¡ Glimpses of CSR Activities MECON LIMITED (A Govt. of India Enterprise) Head Office Vivekananda Path, Doranda, Ranchi - 834002, Jharkhand, India CIN No. - U74140JH1973GOI001199 www.meconlimited.co.in @MECONLimited
Find us on /meconranchi
For Enquiry Contact General Manager (Marketing) Phone : +91-651-2480921/2483379, Fax : +91-651-2482214/ 2482189 E-mail : [email protected]
½ã쌾㠇ãŠã¾ããÃÊã¾ã / MAJOR OFFICES
ÍãÖÀ / City ªîÀ¼ããÓã / Phone ¹ãõŠ‡ã‹Ôã / Fax ƒÃ-½ãñÊã / e-mail ºãòØãÊãìÁ / Bangalore +91-80-26252000 +91-80-26576352 [email protected] ¶ãƒÃ ãäªÊÊããè / New Delhi +91-11-22447417 +91-11-22041214 [email protected] ¶ãÌããè ½ã콺ãƒÃ / Navi Mumbai +91-22-27812155-58 +91-22-27812275 [email protected] ‡ãŠãñÊã‡ãŠã¦ãã / Kolkata +91-33-22822381-82 +91-33-22824441 [email protected]