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2011 -20122011 39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT


[ A Govt. of India Enterprise ]

Head Office :Vivekananda Path, Doranda, Ranchi - 834 002, Jharkhand, India

MAJOR OFFICES :

For Enquiry Contact :Dy. General Manager, I/C Corporate Communications

Phone : +91-651-2481026Fax : +91-651-2482214 / 2482189e-mail : [email protected]

City Phone Fax E-mail

Bangalore +91-80-26252000 +91-80-26576352 [email protected] Delhi +91-11-22041872 +91-11-22041214 [email protected] +91-22-27812155-58 +91-22-27812275 [email protected] +91-44-26261911 +91-44-26261474 [email protected] +91-33-22822381-82 +91-33-22824441 [email protected]

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◊∑§ÊÚŸ Á‹Á◊≈U«U MECON LIMITED

2011 -2012 2011 39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT




MAJOR OFFICES :





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MECON LIMITED, RANCHI - 834002esdkWu fyfeVsM] jk¡ph & 834002

MECON LIMITED

Quality PolicyTO FUNCTION

ASCUSTOMER FOCUSSED ORGANIZATION,

PROVIDINGGLOBALLY COMPETITIVE VALUE ADDED

CONSULTANCY, ENGINEERING, TURN-KEY EXECUTION

ANDPROJECT MANAGEMENT

SERVICES.

Shri S. Machendra Nathan, IAS Shri U.P. Singh, IAS Govt. Director Govt. Director

Board of Directors

Shri A.K. Ghosh Shri J. Mathew Director (Commercial) Director (Project) upto 29.02.2012 upto 30.04.2012

Shri K. K. MehrotraChairman-cum-Managing Director

Shri M.N. Sharif Shri A.K. Tyagi Shri S. Chattopadhyay Director (Technology) Director (Commercial) Director (Project) w.e.f. 12.12.2011 w.e.f. 01.03.2012 w.e.f. 01.05.2012

Shri G. Ojha Shri M.R. Pasrija Shri B. Ramesh KumarDirector Director Director

5A house of engineering excellence ...aiming beyond

39TH ANNUAL REPORT 2011-12

5

Particulars Page No.

Board of Directors 6

Director’s Report 7

Particulars with respect to Technology Absorption 29

Management Discussion & Analysis Report 33

Report on Corporate Governance 40

Statutory Auditor’s Report for the Financial Year 2011-12 44

Comments of the Comptroller & Auditor General of India 48

Balance Sheet as at 31.03.2012 49

Profit & Loss Account for the year ended 31.03.2012 50

Cash Flow Statement (Indirect Method) 51

Notes including Significant Accounting Policy & Segment Reporting 71

Contents

6 A house of engineering excellence ...aiming beyond


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BOARD OF DIRECTORS

CHAIRMAN–CUM–MANAGING DIRECTOR Shri A.K. Ghosh, Actg. CMD (upto 09.02.2012) Shri K.K. Mehrotra (w.e.f.10.02.2012)

DIRECTORS Shri A.K. Ghosh, Director (Commercial) (upto 29.02.2012) Shri K.K. Mehrotra, Director (Engineering) (upto 09.02.2012) Shri J. Mathew, Director (Projects) (upto 30.04.2012) Shri M.N. Sharif, Director (Technology) (w.e.f. 12.12.2011) Shri A.K. Tyagi, Director (Commercial) (w.e.f. 01.03.2012) Shri S. Chattopadhyay, Director (Projects) (w.e.f. 01.05.2012) Shri U.P. Singh, IAS, Director Shri S. Machendra Nathan, IAS, Director Shri G. Ojha, Director Shri M.R. Pasrija, Director Shri B. Ramesh Kumar, Director

COMPANY SECRETARY Shri Ravi Bambha

ASST. GENERAL MANAGER I/C (FINANCE) Shri R. P. Khandelwal

AUDITORS M/s B.Gupta & Co. Chartered Accountants, HO: 4th Floor Sukirti, S P Verma Road, Patna - 800001 (Bihar)

BANKERS State Bank of India Union Bank of India Indian Overseas Bank Canara Bank United Bank of India Bank of India IDBI Bank Andhra Bank IndusInd Bank ICICI Bank Axis Bank HDFC Bank YES Bank



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The Members,

Your Directors have the pleasure in presenting 39th Annual Report on the operations of the Company and the Statements of Accounts for the Financial Year ended on 31st March, 2012.

The Report of the Statutory Auditors and the Comments on the Accounts of the Company by the Comptroller and Auditor General of India are annexed to this Report.

1.0 PERFORMANCE HIGHLIGHTSÇÇ It is heartening to note that your Company

has made all round improvement in its performance during the current financial year. In addition to substantial improvement in the financial performance, the Company has booked large value orders during the year. Major prestigious projects of national importance completed/under progress during the year include:

ÇÇ The re-built Coke Oven Battery No. 1 of SAIL/Bokaro Steel Plant, Bokaro has been successfully commissioned on 29.06.2011. The project has been executed by MECON on EPC basis.

ÇÇ The re-built Coke Oven Battery No. 2 of SAIL/Bokaro Steel Plant, Bokaro has been successfully commissioned on 12.02.2012. The project has been executed by MECON on EPC basis.

ÇÇ New Coke Oven Battery No. 6 at SAIL/Rourkela Steel Plant, Rourkela is under execution. Refractory and mechanical erection has been completed and is ready

DIRECTORS’ REPORT FOR THE FINANCIAL YEAR 2011-2012

for heating-up. MECON is executing the project on EPC basis.

ÇÇ MECON is executing installation of Benzol Recovery and Distillation Plant (IIIrd) at RINL/Visakhapatnam Steel Plant, Visakhapatnam on EPC basis. Civil works and mechanical erection is in progress. It is scheduled to be commissioned during 2012-13.

ÇÇ Commencement of Hot trial of 360 m2 Sinter Plant-III of SAIL/Rourkela Steel Plant, Rourkela (under 4.2 Mtpa expansion programme of SAIL/RSP) has commenced on 01.04.2012 and the plant has gradually started producing sinter. This is the first production unit of SAIL expansion project which has been put into operation. Engineering & consultancy services including designer’s supervision during erection, testing & hot trial has been provided by MECON.

ÇÇ Blowing-in of largest capacity Blast furnace in India, Blast furnace No. 4 of JSW Steel Limited, Toranagallu of capacity 4019 m3 inner volume was successfully done on 18th July, 2011. With commissioning of this blast furnace JSW has achieved 10 Mt capacity benchmark. Since its commissioning, the blast furnace is producing on an around 8500 tpd (avg) with high slag rate of around 400 Kgs/thm. On an average 130-140 kgs/thm pulverised coal is being injected into this Giant blast furnace.

The Blast Furnace(BF) is a state of the art design for which detailed engineering services were provided by MECON. The blast furnace is provided with double chamber tuyeres & mechanical lining of Copper Staves & Spheroidal Graphite (SG) Iron Staves in bosh, belly & Stack region. The BF is provided with soft water cooling in closed circuit. Three numbers regenerative internal combustion type stoves are provided for supplying hot blast at 1200˚C temperature to blast furnace. Pulverised coal injection system has been provided to inject pulverized coal upto 200 kgs/thm with required oxygen enrichment facilities.



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Extensive energy optimizing facilities like use of Variable Voltage Frequency drives, Top Pressure energy recovery of 13 MW capacity, etc has been provided. Layout provision for incorporating waste gas pre-heater system is also made.

ÇÇ Trial rolling of the first plate was carried out successfully on 12.12.2011 in the 5 m Plate Mill at Jindal Steel & Power Ltd., Angul. Apart from all utilities and service facilities the Plate Mill comprises following major units viz. 280 t/h Walking Beam type Slab Reheating Furnace, High Pressure Descaler, 5,000 mm Reversing Plate Mill, Accelerated Plate Cooling System with facilities like hot leveler, cooling bed, shears, plate piler, etc.

The Plate Mill is designed to produce plates of various grades in the following sizes:

Thickness : 5 –100 mm

Width : 1,500 – 4,900 mm

Length : 6,000 – 24,000 mm

Max. Plate Weight : 30 t

Plant Capacity : 1.2 Mtpa (Phase-I)

ÇÇ MECON is providing design & engineering consultancy services for 5.7 MT expansion of SAIL/Bokaro Steel Plant. Errection work is in full swing for their Cold Rolling Mills (CRM-III). Coil Packaging Line CPL-2 has been tested and is ready for commissioning. Commissioning of main packages like CPL-1, Skin Pass Mill, Bell Annealing Furnace (12 Furnaces), Electrolytic Cleaning Line, Pickling Line Tandem Cold Mill, Roll Shop and Hot Rolled Coil Conveyor are scheduled to be commissioned during this financial year.

ÇÇ Hindustan Zinc Ltd. has assigned MECON with the job of engineering services for New Zinc Roaster Plant Project at Dariba, Rajasthan. The major units envisaged are roaster plant, gas cleaning plant and sulphuric acid plant. All the engineering work has been completed. Construction at site is in progress and expected to be completed by August 2012.

ÇÇ BMM Ispat Ltd. has entrusted MECON with the job of detailed engineering & consultancy services and designer supervision services at site for setting up of 1.8 MT (under Phase-I) Integrated Steel Plant at Hospet, Karnataka. The major facilities of the integrated plant in MECON’s scope are raw material handling system, sinter plant, blast furnace, coke oven, oxygen plant, lime calcination plant, Main Receiving Sub-station and other associated service facilities. Basic engineering documents like General layout and Technical specifications for major units like BF, SP have been issued and Tender scrutiny is in progress.

ÇÇ Stemcor have placed an order on MECON for assistance in development of basic design & engineering and providing detailed engineering services, project management and site supervision services for 1.2 Mtpa Pellet Plant for their Client M/s Crest Steel Limited (CSL) of Topworth Group at Rajnandgaon, Chattisgarh. The plant is likely to be commissioned by June 2013.

ÇÇ MECON has provided design and engineering services for Beneficiation Plant with 20 Mtpa input capacity in 6 modules of 3.3 Mtpa to cater the need of enriched ore for the existing pellet plant, sinter plant and upcoming Sinter Plant II and III for



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JSW Steel Ltd. at Toranagallu, Karnataka. The major facilities are raw material handling system, screening plant, crushing plant, classification & upgradation plant, beneficiated products transportation facilities and tailing disposal facilities. Four out of six modules have been commissioned and others are in progress.

ÇÇ MECON is providing design & engineering consultancy services for Caster # 4 and associated accessories for SMS # 1 for JSW Steel Ltd., Toranagallu. Civil foundation drawings for facilities like tundish, mould and segments maintenance equipment have been issued. Detailing for water cooling system, electrical system and RCC structure of Caster is in progress.

ÇÇ 100 MLD capacity Sea Water Reverse Osmosis Desalination Plant at Nemmeli, Chennai ordered by Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) is nearing completion. MECON is providing consultancy for construction management and supervision including third party inspection for the same. Approvals of drawings, marine dredging work for intake and outfall pipes is in progress. 98.6% civil construction progress has been achieved and piping work is in progress.

ÇÇ NMDC Limited, Hyderabad entrusted MECON for the single largest consultancy contract ever taken by MECON for setting up of a 3.0 Mtpa Integrated Steel Plant at Nagarnar, Chhattisgarh. Orders for Raw Material Handling System, Sinter Plant, Coke Oven, By Product Plant and Blast Furnace have been placed. Orders for balance technological packages such as

Basic Oxygen Furnace, Thin Slab Caster, Tunnel Furnace, Hot Strip Mill, Lime & Dolo Plant and Oxygen Plant are to be placed soon. The site activities for the ordered packages have started in addition to execution of enabling works such as Construction water, Construction power, site leveling, boundary wall, Plant Road network etc. Project site being strengthened to cater the needs of site monitoring to be done against the PMC work order from NMDC.

ÇÇ MECON is providing design & engineering consultancy services for 7 MT expansion of SAIL/Bhilai Steel Plant. The basic engineering for construction of Blast Furnace No. 8 is nearing completion. The Blast Furnace Shell & Stove shell erection is at advanced stage. The proposed Blast Furnace No. 8 shall be of 4060 m3 useful volume and shall have all state of the art features for higher campaign life and intensified operation. All energy saving / optimization equipment like Top pressure Recover Turbine, waste gas pre-heaters and Variable Frequency Drive on all important drives are provided. The Blast Furnace shall have adequate de-dusting/ defining system for better environmental protection. It is expected that the Blast Furnace shall give a campaign life of about 20 years.

ÇÇ The basic & detailed engineering of 1 x 360 m2 Sinter Plant for Bhilai Steel Plant, Bhilai is nearing completion. The erection work at site is in full swing and excavation, piling & concreting work is almost complete. Structural fabrication & erection is in advanced stage. The commissioning of the sinter plant is expected by Dec’ 2012.

ÇÇ Sesa Goa, a Vedanta Group Company have placed an order on MECON for upgradation/ modernization of their existing MBF-1 from present volume of 173 m3 to 290 m3 useful volume with minor modification of existing civil foundation. The basic engineering & detailed engineering work has been completed.

ÇÇ Usha Martin Industries, Jamshedpur had placed an order on MECON for design, engineering, consultancy & supply of critical equipment for their hot stove complex for their existing Mini Blast Furnace (MBF)-1. The plant has been successfully commissioned and achieved the target performance level.



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ÇÇ Usha Martin Industries, Jamshedpur has also entrusted MECON for providing detailed engineering & consultancy services alongwith supply of critical items (SG Iron stave cooler & top charging equipment) for upgradation of their MBF-1. The MBF after upgradation shall be of 254 m3 working value and is being provided with SG iron staves in high heat load zone with closed circuit cooling. The MBF is expected to give campaign life of 10 years or more at higher production level & higher auxiliary fuel rates.

ÇÇ Erection work for 4060 m3 Blast Furnace Plant complex and 2 x 204 m2 Sinter Plant at SAIL/IISCO Steel Plant, Burnpur, concreting work, building structures, technological equipment and electrical / automation has been completed. The Blast Furnace complex and sinter plant is ready for trial run.

ÇÇ Tata Metaliks Ltd., has entrusted MECON to provide detailed engineering & consultancy services for upgradation & capacity enhancement of their MBF-2. The upgraded Blast Furnace shall be constructed on the existing MBF foundation after required modification. The basic & detailed engineering for the project is completed and the construction (for shutdown) is in full swing. The MBF shall be of true free standby type with 4-poster & Cast Iron/Spheroidal Graphite Iron staves are being provided which will cater to high heat load condition of Blast Furnace even with higher Pulverised Coal Injection rates. The Blast Furnace is expected to give a campaign life of 10 years or more.

ÇÇ MECON is providing design & engineering

consultancy services for 4.2 MT expansion of SAIL/Rourkela Steel Plant. Hot trial of 1 x 360 m2 Sinter Plant was done on 31.03.2012. 4060 m3 Blast Furnace No. 5 is nearing completion and shall be ready for blowing in 3rd quarter of 2012. The Blast Furnace is state of the art technology with all energy saving measures and latest environmental protection equipment for higher campaign life and intensified operation. The Blast Furnace shall have adequate de-dusting / defining system for better environmental protection It is expected that the Blast Furnace shall give a campaign life of about 20 years.

ÇÇ MECON is carrying out detailed engineering & consultancy services for 2 x 50 Tph briquetting plant at Meramandali, Angul, Odisha for Bhushan Steel Ltd. for converting sponge iron fines into pillow shaped briquettes, a dense agglomerated product for charging into the Conarc furnace for steel making. The know-how, basic engineering & supply of critical equipment have been sourced from Koppern, Germany whereas material handling and balance equipment have been sourced from Koppern, India. Civil and structural work at site is in nearing completion. Major equipment erection has been completed. The plant is expected to be commissioned by September, 2012.

ÇÇ MECON has been entrusted to provide detailed engineering and consultancy services for expansion and modernization of Gua Ore Mine of Raw Materials Division, SAIL wherein the finished product capacity is to be increased to 10 MT including the beneficiation & pellet plant. The offers received against the global tender floated



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for crushing, beneficiation & pellet plant have been submitted and first round of discussion completed.

ÇÇ Jindal Steel & Power Ltd., Patratu has placed engineering consultancy order for 3 MT Integrated Steel Plant. 4019 m3 Blast Furnace complex and 1 x 490.5 m2 Sinter Plant are being supplied by SVAI. Basic engineering is presently being carried out.

ÇÇ Detailed engineering for 1 x 90 m2 Sinter Plant of Monnet Ispat Ltd. is nearing completion. Erection works at site is in advanced stage and the plant is expected to be ready for commissioning by July 2012.

ÇÇ Detailed engineering & consultancy services for 3.85 Mtpa Pellet Plant for Bhushan Steel Ltd., Rengali is in full swing. Technical specification for long delivery items has been issued. Structural & civil foundation drawings of all major building has been issued to site for construction.

ÇÇ The revised Detailed Project Report for the proposed 4.0 Mtpa Pellet Plant at Bolani Ore Mines (BOM) of SAIL/Raw Material Division has been submitted to SAIL after finalizing the same based on discussions with SAIL/RMD & Bolani Ore Mine officials.

ÇÇ For 20.6 MW sinter cooler waste heat recovery system-New Energy and Industrial Technology Development Orgn. Japan model project at RINL/ Visakhapatnam Steel Plant, erection of boiler & turbine is completed. Duct work & erection of circulation fan is under progress.

ÇÇ Commissioning of 14 MW Steam Turbine Generator along with auxiliaries in power plant of COB#4 at RINL/Visakhapatnam Steel Plant, is going on and likely to be completed by April 2012.

ÇÇ Detailed engineering & consultancy services for 2 x 120 MW (Unit # 9 & 10) Captive Power Plant for NALCO, Angul has been completed in January, 2012.

ÇÇ MECON is providing detailed engineering & consultancy services including site supervision, project management, inspection & expediting services for setting-up of 2 x 500 MW Thermal Power Plants for NLC-Tamilnadu Power Ltd., Tuticorin. Drum lifting and Turbo Generator deck casting have been completed for the project.

ÇÇ Mechanical completion of Heat Recovery Steam Generators (HRSG) Project at Vaghodia for GAIL (India) Ltd. has been completed on 31st March, 2012. Testing & steam generator commissioning is under progress.

Your Company has been steadily progressing in the diversified field of Oil & Gas and has been providing Project Management & Consultancy Services to various PSUs, Joint Venture companies as well as private sector clients in the area of Natural Gas Pipeline networks, CNG & City Gas Projects, storage terminals for petroleum products and commercialization of Coal Bed Methane. The major assignments carried out during the year are:

ÇÇ Successful Commissioning of 501 km long Bawana-Nangal Natural Gas Pipeline (BNPL) of GAIL (India) Ltd.

It is one of the most challenging project for MECON with the pipeline configuration 36” / 30” / 24” / 18” x 501 km (total) having design capacity of 22 MMSCMD and design pressure of 98 bar. The Pipeline has one Despatch terminal (at Gauna) , two Receiving terminals (at NFL Bhatinda & Nangal), 18 Sectionalizing Valve stations, 4 Intermediate Pigging stations, Supervisory Control and Data Acquisition & telecom systems and Cathodic protection systems.

MECON provided the Basic engineering, detail engineering, procurement, site services, commissioning & project management services for this ambitious project.

BNPL is MECON’s biggest cross-country pipeline project till date as well as the largest project executed by its Oil & Gas Strategic



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Business Unit located at Delhi. Through this project, MECON also pioneered the use of high strength American Petroleum Institute 5L Grade X-80 quality line pipe (188 km) for cross-country hydrocarbon pipelines in India.

Bawana-Nangal Gas Pipeline project is a part of the longest Natural Gas Pipeline Network (Dahej-Vijaipur-Dadri-Bawana-Nangal-Bhatinda) of India. This 2200 km Pipeline network passes through 8 states (Gujarat, Madhya Pradesh, Uttar Pradesh, Rajasthan, Delhi (UT), Haryana, Punjub & Uttarakhand). The Hon’ble Prime Minister of India Dr. Manmohan Singh inaugurated this pipeline on 23rd March, 2012 at New Delhi.

ÇÇ Commissioning and gas in of 12” X 102 Km Main Pipeline from Karanpur to Kashipur. Gas supply to M/s SITI Energy, Moradabad via 8” X 23 Km spurline. Commissioning and Nitrogen filling of M/s. Shravanti Power 12” X 1.2 Km spurline.

ÇÇ Construction of Kochi Koottanad Bangalore Mangalore Pipeline Project (KKMBPL 30”/ 24” X 1000 Km) for GAIL (India) Ltd. is under execution and Hydro Test for Section – I (30” X 16 Km) successfully completed on 28.02.2012.

This pipeline passes through reclaimed marine soils and creek. This portion of pipeline is laid by using trenchless method – 11 nos. Horizontal Directional Drilling have been laid.

ÇÇ Successful commissioning of CNG station at Shamirpet on 29.11.2011 for City Gas Distribution Network for Bhagyanagar Gas Ltd., Hyderabad.

ÇÇ Upgradation of existing CNG stations from 660 SCMH to 1210 Standard cubic meter per hour at AD Nagar, Agartala of Tripura Natural Gas Corporation Ltd. has been completed on April, 2011.

ÇÇ Demand assessment and Detailed Feasibility Report for bidding to Petroleum and Natural Gas Regulatory Board for grant of authorization for setting up Natural Gas transmission pipeline network from Surat (Gujarat) to Paradeep (Orissa) (1580 Km) has been completed on 18.05.2011 for Indian Oil Corporation Ltd.

ÇÇ Final Bankable Techno-economic feasibility report for iron ore processing plant at Bailadila, 456 Km Slurry Pipeline from Bailadila to Vizag alongwith Pellet Plant at Nagarnar for NMDC Ltd. has been prepared and submitted on October, 2011.

Your Company is also providing services to the Defence Sector. Some of the major defence projects completed / under progress are:

ÇÇ Successfully carried out the job of consultancy services for setting up of ‘Onshore Infrastructure Facilities’ for Indian Navy’s Project Seabird, Phase-I B at Karwar, consisting of major facilities like Ship Intermediate Maintenance Authority (SIMA) / Naval Ship Repair Yard (NSRY), Logistics facilities, Township and Amenities, Utilities and Infrastructure facilities, Communication and Computer System facilities, Accommodation complex for married civilians at Amadalli, Perimeter compound wall for sites A, B, C & E extending to approximately 80 Kms & Gate complexes, Swimming pool (Olympic size) and sports facilities, Sports complex and Naval Armament Depot & Missile Technical



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Position. Raksha Mantri inaugurated the Amadalli Township on 21.05.2011.

ÇÇ Engineering consultancy services for additional infrastructure project for Bhabha Atomic Research Centre, Mysore is in full swing.

ÇÇ Detailed Project Report for modernization of 5 nos. Regional Ordnance Depots at Bathinda, Udhampur, Kandrori, Talegaon and Silliguri for Director General of Ordnance Services, Ministry of Defence (Army), New Delhi has been prepared and submitted.

Your Company is serving a large number of clients in the Public and Private Sector. Some of the major clients in Public Sector include VSP, KIOCL, VPT, GAIL, IOCL, HPCL, BPCL, SAIL-MOIL, OMDC, PNGRB, MRPL, TVNL, WBSEB, WBPDCL, CMWSSB, UCIL, HPGCL, ONGC, CPCB, KPCL, KPT, GGL, IGL, TNGCL, DVC, MSTC, NTPC, NMPT, IDCOL, IREL, BARC, besides Ministry of Power, Govt. of India, the State Electricity Boards in Jharkhand, West Bengal, Delhi, Chhattisgarh, Rajasthan, Tamil Nadu, Uttaranchal, Uttar Pradesh etc. MEL, STEMCOR, BRPL, SESA GOA, AHDUNIK, TML, BSPL, BSL, ESSAR, JSWL, JSL, BIL, MNGL, IL&FS, ADANI, RLUL, MSPL, IIL, ESSAR, SLR, etc. are some of the major clients in the private sector.

In addition to above some of the major clients to whom we have been rendering our services during this year include SAIL, NMDC, HCL, GAIL, UML, LLOYDS, NINL, BGL, WBSEDCL, BT Divine, ALTRADE, OMCL, Jindal Group, Bhushan Group, HINDALCO, UGSL, NSPCL, BMM, NALCO, BPSCL, NLC, TOPWORTH, etc. The Company is also providing services for Defence Sector.



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Your Company has a unique opportunity of executing a number of prestigious assignments in the Steel Sector, which is accepted as traditional core competence area of the Company. In order to capitalize on this opportunity, technologically oriented turnkey projects are the need of the day for your company. Your clients expect the Company to contribute immensely in the national steel building capacity in the next 5 to 10 years. Power is another potential area wherein your company can play a major role. Oil & Gas is also a potential sector for your company.

2.0 BUSINESS DIVERSIFICATIONIn view of the cyclic demand / investments in the Steel Sector over the past several years, your Company has diversified into several sectors of the economy especially Oil & Gas, Power and Infrastructure. This has been achieved by formation of distinct Strategic Business Units in the Company.

The Company has gained substantial experience and recognition in some of these sectors and would like to build a strong portfolio of services to meet the growing demand of Clients. This would also help the

Company in adjusting to the sectoral market fluctuations by aligning itself towards the sectors having higher opportunities in future.

During this fiscal year, consultancy business procurement from the metal sector have been significant. In Engineering and Consultancy, the Company’s order booking is 2.04% (previous year 12.85%) in the non-metal sectors and 97.96% (previous year 87.15%) in metal sector. In case of supply / turnkey projects, it is 100% (previous year 5.81%) in metal sector.

3.0 MANAGEMENT INITIATIVESManagement has taken various initiatives to meet the challenges and opportunities of changing market scenario. The Corporate Plan that has been developed after detailed analysis was approved by the Board during the year.

In all 4 SBUs major initiatives are on anvil for collaboration and entering in agreements with companies having suitable technologies and engineering solutions to offer.

Keeping in view the continued growth in Metal sector (7% & 9% projected for 2012-13 & 2013-14 respectively), company has consolidated its market share as leader through a multi-pronged approach. The strategy included expeditiously finalizing pending contracts with SAIL/NMDC and other clients, improving project monitoring efforts, identifying and entering into agreements with foreign and Indian companies for technological and business associations in thrust areas, increasing client base in private sector are to name a few.

In view of challenges in raw material sourcing caused due to scarcity of lump iron ore and its high prices the need for use of huge quantities of dumped fines and low grade ore has become quite urgent and important. As such,



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the Ore Beneficiation, agglomeration and slurry transportation were identified as key thrust areas. Renewed thrust on securing EPC projects in metal sector has been applied.

Due to stiff competition in Oil & Gas sector experienced during the year, the period was utilized for improving delivery on the existing assignments and shaping niche marketability in areas like offshore pipeline, LNG/FSRU installations.

In case of Power sector also renewed efforts with cost optimization / business like approach has been developed for next round of bidding programmes.

In case of Infrastructure SBU, an internal reorganization has been planned in line with Corporate Plan strategies with a focus on a very few selected area such as Defence sector, port/harbour and other marine works, sea water desalination plants and cement manufacturing units.

Several initiatives for achieving improvements on various aspects of operation are taken on continuous basis. A few notable initiatives during the year are:

Ç% Use of competency matrix for identifying the right resources during making offers and job rotation plan;

Ç% Adding Dashboard as an important MIS feature;

Ç% Consolidation of enterprise wide networking on e-working for financial management & project management activities by adding more features;

Ç% Introduction of commencement of e-tendering on Government Portal as per new Central Public Procurement(CPP) requirement;

Ç% Inspection Management System;

Ç% Auto-generation of Credit Note for Service Tax;

Ç% Systematic and planned schemes for encouraging organizing skills at all levels for setting up meetings, presentations, workshops, seminars, technical paper / publications.

These initiatives are paying dividends by way of all-round improvement in the performance of the Company.

4.0 MOU WITH MINISTRY OF STEEL ON PERFORMANCELike in the previous years, your Company has signed an MOU with Ministry of Steel for the Financial Year 2012-2013. The Company achieved excellent rating in the year 2010-11 and is likely to achieve Very Good rating in 2011-12.

5.0 ISO 9001:2008 CERTIFICATIONYour Company is the first consultancy organization in the country to be accredited with ISO-9001 Certification for Quality Management System in the year 1994. The certificate has been awarded by M/s TUV NORD CERT Gmbh. The scope of Company’s accreditation include Consultancy, Design & Engineering, Procurement of Plant & Equipment, Inspection, Construction & Project Management Services and Erection of Turnkey Projects. The re-certification audit by TUV has been completed in November, 2011 and Company’s QMS has been recertified for ISO 9001: 2008 for further period of three years with validity till 29.01.2015. Vigilance function of the Company has also received ISO 9001: 2008 Certification valid upto November, 2012.

6.0 INDIAN ASSIGNMENTSYour company has procured following major work orders during 2011-12 :

Metals SectorÇÇ Contract was signed for detailed

engineering & consultancy services for expansion of Steel Plant to 7.0 Mtpa of SAIL/Bhilai Steel Plant, Bhilai.

ÇÇ Project management & consultancy services for 3.0 Mtpa Integrated Steel Plant at Nagarnar of NMDC Limited.

ÇÇ Contract was signed for detailed engineering & consultancy services for expansion of Steel Plant to 4.2 Mtpa of SAIL/Rourkela Steel Plant, Rourkela.

ÇÇ Contract was signed for detailed engineering & consultancy services for expansion of Steel Plant to 5.7 Mtpa of SAIL/Bokaro Steel Plant, Bokaro.

ÇÇ Contract was signed for detailed engineering & consultancy services for expansion & modernization of SAIL/Durgapur Steel Plant, Durgapur.



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ÇÇ Detailed engineering & consultancy services for Integrated Steel Plant at Danapur, Hospet, Karnataka for BMM Ispat Limited, Bangalore.

ÇÇ Consultancy services for New Zinc Roaster Plant Project at Dariba, Rajasthan for Hindustan Zinc Ltd., Udaipur.

ÇÇ Design & engineering consultancy services for Caster # 4 in SMS # 1 at JSW site for JSW Steel Ltd., Mumbai.

ÇÇ Detailed engineering & consultancy services for Ferro Alloy Project at Bellary for Bhushan Energy Ltd., New Delhi.

ÇÇ Detailed engineering & consultancy services for Alloy Wire Rod Manufacturing Facilities in Smelter of NALCO at Angul.

ÇÇ Supply of Tension Reel Assembly with Gear Box (Entry Side) for Roughing Mill for Ordnance Factory, Ambarnath.

ÇÇ Detailed engineering & consultancy services for Steel Plant at Rengali for Bhushan Power & Steel Ltd., Kolkata.

ÇÇ Preparation of report for implementation of Standard Operating Practice/Standard Maintenance Practice in 10 Model Steel Re-rolling Mill (SRMM) for PMC, United Nation Development Programme/ Global Environmental Facility Project (Steel), Ministry of Steel, New Delhi.

ÇÇ Lenders engineer services for Pellet Project in Orissa for Essar Steel Ltd., Mumbai.

ÇÇ Consultancy services for Copper-III Smelter Upgradation of Birla Copper at Dahej for Hindalco Industries Ltd., Bharuch.

Power SectorÇÇ Consultancy services for Power Distribution

System for Usha Martin Ltd.

ÇÇ Renovation & modernization of Unit 3 of Chiplima Hydro Electric Project of Odisha Hydro Power Corporation Ltd., Bhubaneswar.

ÇÇ Preparation/Recasting of Detailed Project Report for different Towns under WBSEDCL, Kolkata.

ÇÇ Detailed engineering & consultancy services for BF Gas Line Connection with Unit # 9 of BPSCL, Bokaro.

ÇÇ Preparation of Techno-economic Feasibility

Report for 3670 MW Power Plant in Jharkhand for BT Divine Power & Mining Corporation Ltd.

ÇÇ Preparation of Techno-economic Feasibility Report for 2 x 120 MW & 1 x 660 MW Coal based Captive Power Plant for Altrade Iron & Power Ltd.

Oil & Gas SectorÇÇ Engineering, Project Management

Consultancy services for implementation of City Gas Distribution Network for supplying of Natural Gas to Domestic, Commercial, Industrial & Automobile consumers in geographical area of Taj Trapezium Zone (TTZ) for GAIL Gas Ltd., Noida.

ÇÇ Consultancy services for construction of Oil Terminal at Ennore for HPCL, Chennai.

ÇÇ Project management & consultancy services for Installation and Commissioning of Scrubber & Associated Equipments at different Sites under RPNHQ Baroda for GAIL, Vadodara.

ÇÇ Project management & consultancy services for carrying out Horizontal Directional Drilling(HDD) at Narmada River at Bharuch for shifting of 14" dia Pipeline pinning with Railway Bridge for GAIL, Vadodara.

ÇÇ Consultancy Services for HDD at Haradiya Creek for GAIL (India) Limited, New Delhi.

ÇÇ Project management & consultancy services for CGS Network Project at Hyderabad for Bhagyanagar Gas Ltd., Hyderabad.

Infrastructure Sector / Other EngineeringÇÇ Detailed engineering & consultancy

services for installation of additional Bunkers in Sinter Plant to feed Sinter to Blast Furnace-1 for JSPL, Raigarh.

ÇÇ Detailed engineering & consultancy including site supervision services for Tailing Pond & Effluent Treatment Plant Slurry Line of Orissa Mining Corporation, Bhubaneswar.

ÇÇ Preparation of Techno-economic Feasibility Report for Beneficiation Plant at Bailadila and Construction of Slurry Pipeline from Bailadila to Vizag for NMDC, Hyderabad.

ÇÇ Preparation of Feasibility Report &



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Technical Specification for Coal Conveying System from Wagon Tippler 3 to Power Plant-II for NTPC-SAIL Power Company Ltd., Bhilai.

7.0 FOREIGN ASSIGNMENTS Overseas assignment bagged by your company is highlighted below:

ÇÇ Preparation of Pre-Feasibility Report for Natural Gas Distribution Project in Lagos, Nigeria for Contec Global Energy Ltd., Nigeria.

8.0 FINANCIAL RESULTS (` In Lakhs)

2011-12 2010-118.1 Paid-up Capital 9,053.84 10,313.84

8.2Reserves and Surplus (Including revaluation reserve)

24,760.69 12,424.86

8.3 Turnover 64,383.43 64,137.968.4 Profit before Tax 20,153.53 14,092.80

9.0 DIVIDENDThis year your Directors have recommended payment of Dividend on Preference Shares for `295.03 Lakhs and 20% Dividend on paid up Equity Share Capital for `802.77 Lakhs.

9.1 Cumulative Dividend & Tax PaidYour company which had paid up capital of `9053.84 Lakhs (previous year `10,313.84 Lakhs) including Bonus Shares worth `40.31 Lakhs, has paid cumulative dividend including tax (Equity & Preference) of `2088.98 Lakhs till 2010-11 and has made a provision of `342.89 Lakhs towards Dividend on Preference Shares and `933.00 lakhs towards Dividend on Equity Shares including dividend tax thereon in 2011-12. The cumulative income tax to the exchequer amounting to `23896.37 Lakhs has been paid/provided till 2011-12.

10.0 EARNING PER EMPLOYEEOperating Turnover per employee per year is as follows :

11.0 FUTURE BUSINESS VISIONYour company accepts Engineering Consultancy & Project Management Consultancy (PMC) services as the thrust area of business procurement and therefore is concentrating to procure and execute more jobs of this nature. The Company has laid emphasis for procurement of business in the different sectors of operation in this area. Business procurement in the area of engineering consultancy & PMC services was `559.01 Crores in previous year and `1373.93 Crores during this financial year. In supply / turnkey projects it was `113.63 Crores in previous year and `2.06 Crores during this year. Your company has decided to effectively utilize the costly man-hours for high value jobs and outsource the low return areas.

12.0 RESEARCH & DEVELOPMENTR&D plays an important role in the innovation process. It results in the technology that brings new products and services to the market place. Innovation results in high quality jobs, successful business, better goods and services and more efficient processes. R&D results in valuable inventions, ideas and designs which can be a source of potential value when it comes to gaining competitive advantage. MECON’s R&D activities are carefully planned so that all inventions are patented to protect these valuable assets.

Presently experimental R&D activities are being carried out in Steel Sector. In recent years your company is engaged in R&D work sponsored by MECON itself and other Government bodies viz Ministry of Steel, Department of Science & Technology, Ministry of Environment & Forests etc.



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Projects CompletedÇÇ Design, Development of layout

and Finalization of Broad Technical Specification of the system for the development of Infrared Camera Based Ladle Condition Monitoring system.

The objective of the project is to generate a pre indication of the condition of the inner refractory lining of the ladle so that dangerous hazard like ladle breakout can be averted. The estimation of the refractory life is obtained from monitoring the temperature distribution of the ladle shell surface with the help of a group of infrared camera for automatic detection of hot spots. The design of the system, development of the layout and finalization of the broad technical specification of the system are completed as a part of MoU 2011-12. The procurement activities are taken up.

ÇÇ Design, Simulation study & selection of components for the development of Continuous Multi gas Monitoring system.

The main objective of this study is to develop the multi gas monitoring system using Non dispersive Infrared, NDIR, principle. The basic system and simulation study has been successfully completed in our prototype development center using in-house developed software as a part of MoU 2011-12. All components required for this system have been selected based on the above simulation results.

On-going ProjectsÇ% Development of Thermoelectrically

cooled / heated helmet for industrial applications.

Project was sanctioned by SDF, Ministry of Steel. The objective of this development project is to provide comfort to Industrial workers by providing head cooling when working at elevated temperature zone.

The overall progress of the project is satisfactory. The project is expected to be completed on or before December, 2012.

Ç% Development of Continuous Multi Gas Monitor.

This project was sanctioned by Steel Development Fund(SDF), Ministry of Steel, Govt. of India. The main objective of this project is to develop multi gas monitoring

system for the measurement of CO, CO2, NOx, and SO2 using Non Dispersive Infrared (NDIR), Principle. After successful development, the system would be installed in one of the stacks at Bhilai Steel Plant for its performance test. The project already started and procurement of required components are in progress.

Ç% Infrared Camera Based Ladle condition Monitoring.

The project “Infrared Camera Based Ladle Condition Monitoring System” was sanctioned by Ministry of Steel, Govt. of India from Steel Development Fund (SDF). The project started on March 2012. The main objective of the project is to develop a system that gives a pre indication of ladle health so that dangerous hazard like ladle breakout can be averted. The most convenient method of estimating the wear out of the refractory inner lining of the ladle is from monitoring the surface temperature distribution of the ladle with the help of infrared camera. For this purpose three cameras are proposed to be used to grab the thermographic image of the whole of the ladle surface area. The acquired images are proposed to be processed by software for automatic detection of hot spot. The system integration and software of the system is proposed to be developed and installed at site for data collection and analysis.

Ç% Development of trolley based portable battery and/or mains operated Solid State Microclimate Cooling system for Industrial maintenance personal working at elevated temperature at Steel Plant.

The objective of the present MOU project is to develop a portable Trolley based Microclimate Cooling System for Industrial maintenance personnel at steel plants to help them working comfortably at an elevated temperatures.

In Steel Pants, the maintenance people are frequently required to work at elevated temperature zones. Otherwise they are required to wait for the temperature to cool down to start work and thus there is sufficient loss of manhour.

With the help of the proposed system any cooling garments (which is not in the scope of work under this development)



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can be cooled to comfortable temperature and wearing these cooling garments, the workers can work comfortably for longer duration at an elevated temperature. This is both battery and / or mains operated system and can be carried any where within the plant by the attached trolley.

This is a Solid State Thermoelectric Cooling System and the same system can be used to work comfortably at sub-zero temperature also. This project is a part of MoU R&D Project for the year 2012-13.The development of the system is under progress satisfactorily.

Once the system is developed, we have plans to patent the development, conduct different experiments at lab and publish the results in different International / National Journals.

Ç% Basic System Design and Simulation study for the development of continuous ozone monitoring system for steel plants.

Ground Level ozone, bad ozone, is an air pollutant which is formed by chemical reaction between oxides of nitrogen and volatile organic compounds in the presence of sunlight. This ozone has adverse effect on human beings and damages vegetation and ecosystem. The November 2009 notification issued by Ministry of Environment and Forests, Govt. of India, requires ozone monitoring. Our objective of the present study is complete basic design, selection of components and stimulation study for the development of complete ozone monitoring system using Ultra Violet (UV) absorption method which is the part of MoU R&D project for the year 2012-13.

Ç% Development of basic software for operating of PC based IR Camera and its simulation study in our laboratory for ladle conditioning Monitoring system.

The project “Infrared Camera Based Ladle Condition Monitoring system” was sanctioned by Ministry of Steel, Govt. of India from Steel Development Fund (SDF). The project started on March 2012. The aim of this work is to develop a part of the above mentioned sanctioned project which is the basic software for image acquisition through IR camera for temperature measurement and simulation study in

laboratory which helps to achieve the objective of main project funded by SDF, MoS. This project is a part of MoU R&D project for the year 2012-13.

No. of patents under process:

1. Solid State / Thermoelectrically heated Oil / diesel filter for Automobiles in cold regions. Patent Application No. 1429/KOL/2007.

2. An improved stove for blast furnaces and method of fabricating the same. Patent Application No. 95/KOL/2009

3. Infra red imagery based slag detection system for basic oxygen furnace (BOF) converter. Patent Application No. 1247/KOL/2009.

4. Continuous NOx monitoring system. Patent Application No. 1248/KOL/2009.

Recognition of MECON R&D :

Renewal of recognition of MECON, R&D by DSIR, Govt. of India has been obtained vide letter no. TU/IV-RD/1191/2012, dated 02-04-2012 for four years. (up to 31/03/2016).

13.0 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

13.1 Conservation of EnergyCoking coal is the prime source of energy, as well as, the reductant for production of hot metal through blast furnace route. Similarly, non-coking coal is the basic energy source, as well as reductant for production of direct reduced iron and for generation of power. In India, coking coal is scarcely available and is of biggest concern for Indian steel industry. This problem is foreseen to become more acute in the years ahead. It has been projected that there will be substantial growth in the production of steel in the years to come in India. This will result in more and more dependency of Indian steel plants (particularly, integrated steel plants, producing hot metal through blast furnace route) on imported coal.

The steel industry is the single largest industrial energy consumer, accounting for about 4% of the world’s energy consumption.

A number of energy saving measures/ technologies have been suggested by your Company to various steel plants in India to save energy in different units of an integrated steel



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plants, resulting in saving in scarcely available coking coal, saving in import of coking coal and resulting reduction in production cost.

The major energy saving measures / technologies in various areas of steel production, suggested are summarized below.

A. Coke making :ÇÇ Coke dry quenching (CDQ) technology

to utilize the sensible heat of hot coke for power generation;

ÇÇ Recovery of sensible heat of coke oven gas (COG);

ÇÇ Computerised Oven Heating Control (COHC) System.

B. Sinter making :ÇÇ Sinter cooler exhaust gas waste heat

recovery;

ÇÇ Sinter bed depth increase (optimization);

ÇÇ Adoption of variable speed drive for exhaust fan.

C. Iron making (through conventional blast furnace route).ÇÇ Recovery of heat from waste gas of stoves;

ÇÇ Cold blast main insulation;

ÇÇ Injection of auxiliary fuels (i.e. pulverized non-coking coal) in blast furnace to reduce coke rate;

ÇÇ Use of top pressure recovery turbines (TRT).

Iron making (through direct reduction route) :ÇÇ Recovery of sensible heat for power/steam

generation;

ÇÇ Use of by product (i.e. chat) for power generation in power plant.

D. Steelmaking and continuous casting :ÇÇ Recovery of sensible heat of basic oxygen

furnace (BOF) gas;

ÇÇ Adoption of foamy slag practice to reduce power consumption in electric arc furnace (EAF);

ÇÇ Utilization of primary vessel (BOF / EAF) only as melting unit and carrying out refining operation in secondary refining units;

ÇÇ Adoption of continuous casting route to replace energy inefficient ingot casting route;

ÇÇ Adoption of thin slab casting technology along with tunnel furnace and finishing stand of hot strip mill, which results in substantial saving of energy.

E. Rolling : ÇÇ Hot charging of continuously cast

products in order to utilize the sensible heat of continuously cast billets/blooms;

ÇÇ Endless rolling.

F. Electrical : ÇÇ Use of compensating equipment (Capacitor

Bank & SVC) on primary distribution system;

ÇÇ Use of energy efficient motors, lamps (LED,CFL, T-5) in ongoing projects.

ÇÇ Use of solar energy for street lighting for on going projects;

ÇÇ Use of energy saving variable frequency drives for high capacity motors;

ÇÇ Use of regenerative drives for cranes and rolling mill application;

Apart from the technologies mentioned above, there are some other energy saving technologies also in steelmaking, casting and rolling mills area. Your Company has taken into consideration the energy saving technologies, mentioned above, during design of various steel plants, based on the technology available and the prevailing practices.

13.2 TECHNOLOGY ABSORPTIONThe detailed information on technology absorption as per Form-B under the Companies Disclosure of Particulars and Rules, 1988 is enclosed at Annexure-I to this Report.

14.0 FOREIGN EXCHANGE EARNINGS AND OUTGOYour Company has earned `482.11 Lakhs Foreign Exchange during the year 2011-12. The expenditure in Foreign Exchange during the year was `284.59 Lakhs as per details given below:



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Particulars (` in Lakhs)Engineering Fee 250.24

Other matters (purchase of equipment, components foreign supervisory services, capital goods etc.)

34.35

Total 284.59

15.0 HUMAN RESOURCE DEVELOPMENTIn the present entwined business scenario of high competitiveness, rising privatization, with the up-rise of globalization, it requires high emphasis to be given for nurturing and nourishing the Human Capital of the organization. Training and Development activities play a vital role by invigorating the continuous endeavor to keep the knowledge domain abreast with the latest technology, software and skill. MECON, being an Engineering Consultancy having diversified field of activities, requires our incessant attention to maintain a cadre of competent manpower with updated skills and we accomplish that by providing need based training to all our employees.

HRD achieved the following training figures as compared to the target set for the year 2011-12:

Man days of training:Target: 1190 (for 2011-12)Achieved: 1741.5 (in Excellent Category)

Employees imparted training during April 2011 to March 2012:Technology Related: 637Skill-related: 587.5 Soft Skill-related: 517(Behavior & Managerial Related)

Key activities undertaken by HRD in the year 2011-12 are mentioned below :

Ç% During the period 2011-12, employees have been exposed to all areas related to MECON’s arena of activities. Technical programs in the field of STAAD Pro, Programmable Logic Control (PLC)/Sequential Logic Control (SLC) Program Using RS Logics, Auto CAD, etc. and Managerial programs on Strategic Management, Leadership, Communication, Business Negotiation Skills, etc. were conducted In-house to amplify our coverage of employees. While numerous programs have been conducted externally in the technical as well as technology related areas like Green Building concept, Ultrasonic Testing (UT) Level – II & Radio Testing (RT) Level- II, Siemens PLC S7-300, IPV4 to IPV6 Conversion, FINEX Technical Application, etc. to maintain our upper hand in our line of business. Additionally, some of the Managerial programs organized externally which have added great value to MECON are Achieving Managerial Excellence, Marketing Decision Making, Corporate Sustainability - Environmental Opportunities and Competitive Advantages, etc.

Ç% The training programs have not been confined to programs of business importance only rather we have enhanced our reach to programs on Corporate Social Responsibility, RTI Act 2005, Reservation in Services, Environmental Assessment, etc.

Some of the topics covered in In-house and External Trainings are as follows:

In-house Programmes :ÇÇ Building Positive Attitude for a better work

culture

ÇÇ Finance for Non-Finance Executives

ÇÇ Business Negotiation Skill

ÇÇ STAAD Pro

ÇÇ Strategic Management for Business Leadership

ÇÇ Management Development Program for MTTs 2011

ÇÇ Analysis of Tall Structures & Chimney Design

ÇÇ Piping Engineering

ÇÇ Modern Trends in Industrial Hydraulics



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ÇÇ Enhancing Executive Efficacy

ÇÇ Leadership for Young Managers

ÇÇ Hydraulics & Auxiliary Sys. Appl. in Steel & Other Industry

ÇÇ PLC/SLC Program Using RS Logics-S5/100 including BTR/BTW & PID

ÇÇ Mandatory Publication of Tender Enquiries on the CPP Portal

ÇÇ Earthquake Resistant Design of Structures

ÇÇ Auto CAD

ÇÇ Communication & Presentation Skills

External Programmes:ÇÇ ANSYS simulation solution

ÇÇ UT Level II

ÇÇ RT LEVEL II

ÇÇ Letter of Credit Transactions & INCOTERMS 2010

ÇÇ Reservation in Services for Scheduled Castes, Scheduled Tribes and OBCs (RIS)

ÇÇ VSC Technology for HVDC & FACTS

ÇÇ Earthing for Power Systems

ÇÇ QMS ISO 9001:2008 Lead Auditor Training

ÇÇ Corporate Sustainability - Competitive Advantages

ÇÇ Rock Mechanics & Ground Control

ÇÇ Best Practices in Hospital Administration & Management

ÇÇ Achieving Managerial Excellence

ÇÇ Welding Inspectors' Course

ÇÇ Mi-Power

ÇÇ Marketing Decision Making

ÇÇ Permanent Way course no. 11106 by Indian Railways Institute(IRI) of Civil Engg. Pune

ÇÇ High Voltage Testing of Power System equipments

ÇÇ Siemens PLC S7-300

ÇÇ Siemens Drive Sinamics S-120

ÇÇ Whittle Pit Optimization Software

ÇÇ Recent Challenges and Innovations in Castable Refractory Technology

ÇÇ Financing of International Trade

ÇÇ Steel Mill Hydraulics

ÇÇ ABB Automation & Power World

ÇÇ Steel Making Technology

ÇÇ IPV4 to IPV6 Conversion Training

ÇÇ Cardiology Echocardiography & Allied Imaging Techniques

ÇÇ Gas Transmission and Distribution Piping Systems (ASME B31.8)

ÇÇ Green Building and Green Homes

ÇÇ Mineral Processing Technology (MPT-2011)

ÇÇ Stress Management

ÇÇ Current Requirements in Environmental Impact Assessment (EIA) Process & Procedures

ÇÇ Cement & Building Materials

ÇÇ Desulphurization of Hot metal & Utilization of Torpedo

ÇÇ Design and Rehabilitation of Highway Pavements

ÇÇ Testing and Evaluation of Concrete and Concrete Making Materials

ÇÇ Elimination of Child Labour

ÇÇ Right to Information Act 2005

ÇÇ Piping Engineering

ÇÇ Steel Structures - Design & Fabrication

ÇÇ Sustainability & Innovation in Green Building

ÇÇ 26th Indian Engineering Congress 2011

ÇÇ Determination of Bacteriological Analysis of Water and Waste Water Samples

ÇÇ Air Quality Management through Source Apportionment

ÇÇ Lab Virtual Instrumentation Engineering Workbench

ÇÇ Coastal Water Quality Monitoring and Management

ÇÇ FINEX Technical Application

ÇÇ Network Security Administration

ÇÇ e-Procurement in Engineering Projects



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ÇÇ CSR Implementation and Value Creation

ÇÇ Performance Related Pay (PRP) Implementation in CPSUs

Ç% HRD has conducted many In-house programs this year and used its own personnel as Faculty as well. Two such training programs are ‘Enhancing Executive Efficacy’ and ‘Communication & Presentation Skills’.

Ç% The Vocational Training coordinated by HRD has been upgraded as the students joining in batch on the dates specified by HRD are undergoing an Orientation session, Vocational Training Certificate has been newly designed and implemented, Feedback of Students are taken after completion of Vocational training.

Ç% The HRD Auditorium is getting renovated to get a new look and be operational with latest technology equipments to handle further training sessions and presentations in a more competent way.

16.0 PERSONNEL & WELFAREEmployee strength of MECON at the end of the year i.e., as on 31.03.2012 was 1747 (including 26 Nos. MT(T)s under training as per Apprentices (Amendment) Act, 1973 & 1986) as against last year’s strength of 1823. Out of the total strength of 1747, 311 belong to SC and 178 belong to ST categories.

17.0 INDUSTRIAL RELATIONSThe Company focused on employee relationship and all employee related matters were addressed leading to greater satisfaction of the employees. The work atmosphere remained healthy and harmonious and this helped the Company to achieve better productivity. The Company continued to have peaceful and cordial relations with the employees and most of the issues were settled through interactions and dialogue with the representatives of Non-Executive and Executive employees. Liaison with other associated external agencies was also maintained cordially.

18.0 ACTIVITIES / STEPS TAKEN FOR THE WELFARE OF SC / STs IN THE COMPANYIn addition to its corporate and business objectives, the Company is fully aware of its social responsibilities for development and welfare of members of Scheduled Caste/Scheduled Tribes Communities. The strength

and number of SC/ST candidates presently employed in MECON are indicated below :

CategoryGroup

Manpower as on

31.3.2012

No. of SC

No. of ST

% age of SC

% age of ST

A 1544 269 108 17.42 6.99

B 54 13 12 24.07 22.22

C 106 17 41 16.04 38.68D

(excluding safai

Worker)

37 9 16 24.32 43.24

D(Safari

worker)6 3 1 50.00 16.67

Total 1747 311 178 17.80 10.19

The Company has adopted adequate measures for safeguarding their interests and welfare, such as promotion as per general trend, proper regard for human rights, equality and impartiality in all spheres of activities and providing abundant opportunities for self development through sports, cultural, educational and recreational facilities. Scheduled Caste/Scheduled Tribe employees and their families residing in Shyamali Township enjoy all the facilities available to others. In order to implement the Government of India Directives and Post-based Rosters with regard to recruitment and promotion of SCs/STs, an SC/ST Cell has been formed with General Manager (P&A) as Liaison Officer. The SC/ST Cell maintains proper record regarding recruitment and promotion and statistics of SC/ST employees and furnishes reports to the Ministry of Steel on regular basis.The Company has made consistent efforts to accommodate SC/ST candidates in all recruitments in MECON as well as in promotion to the next higher grade as per Government Directive.

19.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)MECON is engaged in rural/community development activities in the nearby surroundings since 60’s. In the year 1976, a dedicated group was formed and named “Community Development Committee (CDC)” and were assigned to look after the activities of “Corporate Social Responsibility”. Today, there is a separate department named “CSR Cell”, which in association with CDC is carrying out the CSR activities.



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The activities of community development is carried out for the development & welfare of SCs/STs/OBCs/Minorities & Weaker Sections” of the society in slum areas/backward areas of Ranchi & nearby villages and adjoining Khunti district.

The major components of CSR program are as follows :

Ç% Community Education scheme

Ç% Enabling the beneficiaries towards Resource Generation

Ç% Vocational training institute

Ç% Community health program

Ç% Aiding the handicapped/disabled people

Ç% Village/rural based programs

Ç% Afforestation

Ç% Other welfare activities

The major developmental activities carried out by MECON in the financial year 2011-12 are as follows :

1. Under the “Community education scheme”, free education is being provided to the under privileged poor children at 13 (thirteen) nos. primary education centers, which are running in the slum areas/backward areas/ rural areas in and around Ranchi and nearby villages. No. of students in these centers is around 400.

As per the requirement, these educational centers have been provided with study materials such as pencils, black boards/white boards, charts, chalks, books, exercise copies etc. In addition, the children have been provided with school dress as well as sweater during winter season.

2. Under, the “Resource Generation Scheme/ Economic empowerment to women”, 7 (seven) nos. stitching training centers are running in slum/backward areas in and around Ranchi. No. of students in the above mentioned Resource generation centers were 107. For training purpose, each center/student was provided with new clothes for stitching of shirt, short pant & skirt alongwith necessary stitching materials.

3. MECON is running a Vocational Training Institute (VTI), for providing technical/ professional education to the poor & rural youths, who are not able to continue their higher studies. The institute is affiliated to National Institute of Open Schooling (NIOS), New Delhi. Presently, the institute offers five types of course viz. Radio & TV technician, Electrical technician, Welding technology, Computer Applications and Yoga.

In the previous session (2011), a total of twenty one (21) students in different trades were admitted. Students appeared for their final examination in the month of Nov-Dec’2011. In the current session (2012), there are a total of forty three (43) students in different trades.

4. Under the “Community health program”, the followings areas were covered :

ÇO General health/medicine camps (In and around Ranchi & nearby villages and in Khunti district) : Around 2,770 patients were covered & free medicines were distributed;

ÇO HIV/AIDS awareness program;



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ÇO Mass inoculation of children under Pulse Polio program.

5. Under the scheme for “Aiding the Handicapped/Disabled”, the following areas were covered,i) Cheshire Home (a home for disabled

persons), Bariatu, Ranchi in the following areas,ÇO Providing financial & technical

assistance for construction of 40-bedded Hostel building;

ÇO Financial assistance for procurement of Ambulance (TATA Winger);

ÇO Financial assistance for procurement of Offset printing machine.

ii) St. Michael’s School for the Blind, Old H.B. Road, RanchiÇO Providing financial & technical

assistance for construction of 26-bedded Hostel building (1st floor).

ÇO Financial assistance for procurement of Vehicle (TATA Winger).

iii) Brajkishore Netraheen Balika Vidyalaya, Bargain, Bariatu, RanchiÇO Providing financial & technical

assistance for construction of Girls’ Hostel building.

ÇO Financial assistance for procurement of Vehicle (TATA Winger).

6. Under the “Village/rural based programme (LWE areas)”, the followings areas were covered,

i) 45 villagers of Vil.-Belagara, Maranghada, Dist.-Khunti, Vil.-Sungi, Block-Karra, Dist.-Khunti & Vil.-Pancha, Block-Bundu, Dist.-Ranchi were trained in “Lac Cultivation” at Indian Institute of Natural Resin and Gum (Formerly : Indian Lac Research Institute), Namkum, Ranchi.

ii) Providing Solar street lights (107 nos.) in villages,ÇO At Vil.-Belagara, Maraghada, Dist.-

Khunti : 17 nos.ÇO At Vil.-Sungi, Karra, Dist.-Khunti :

40 nos.

ÇO At Vil.-Pancha, Taimara, Dist.-Ranchi : 35 nos.

ÇO At Vil.-Pandu Toli, Nagri, Dist.-Ranchi : 15 nos.

iii) Extension of Hockey ground at Vil.-Belagara, Maranghada, Dist.-Khunti.

iv) Providing complete Hockey kit/set to Village hockey teams of Vil.-Belagara & Vil.-Sungi, Dist.-Khunti.

v) Rural football tournament at “Vil.-Pancha, Block-Bundu, Dist.-Ranchi from 13.10.11 to 15.10.11. (No. of participating teams – 16).

vi) Rural football tournament at “Birsa College Ground”, Khunti from 19.11.11 to 23.11.11. (No. of participating teams – 28).

vii) Rural hockey tournament at “Vil.-Sungi”, Block-Karra, Dist.-Khunti from 28.11.11 to 01.12.11. (No. of participating teams – 24 : men’s & 8 : women’s).

viii) Rural football tournament at “Vil.-Rupru”, Block-Angara, Dist.-Ranchi from 15.12.11 to 17.12.11. (No. of participating teams – 18).

7. Under the afforestation programme, about 575 saplings of mango, litchi, guava, lemon etc. were procured from Horticulture & Agro Forestry Research Programme (HARP), Palandu, Ranchi and distributed to the villagers of tribal village Vil.-Pancha, Taimara, Dist.-Ranchi.

8. Other welfare activitiesi) Financial & technical assistance to

Yuva Samaj Kalyan Samiti, Koynar Toli, Debadih, Ranchi, for construction of akhra (platform) & tubewell.

ii) Financial & technical assistance to Pramatha Nath Madhya Vidyalaya, Hinoo, Ranchi for construction of class rooms.

iii) Financial & part technical assistance to Vaykti Vikas Kendra, Vil.-Kudri, Dist.-Khunti for construction of Tribal School.

iv) Financial support to Jharkhand Social Revolution & Development Society (JSRDS) “AADYA” for setting up soap manufacturing unit at Vil.-Patra Toli, Balalong, Dist.-Ranchi.



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v) Adoption of animals (4 nos.) (Tiger named Sugriv – 1 No. & Leopards named Raja, Seeta & Geeta – 3 Nos.) of Bhagwan Birsa Jaiwik Udhyan, Ormanjhi, Ranchi (For five years).

vi) Financial assistance to Ramakrishna Mission T.B. Sanotarium, Tupudana, Ranchi for procurement of Ambulance (TATA Winger).

vii) Providing financial & technical assistance to Kissan Uchh Vidyalaya, Ormanjhi, Dist.-Ranchi for construction of class rooms.

viii) Providing financial & part technical assistance to St. Barnabas Hospital, Ranchi for modification/ renovation for making of ICUs.

ix) Financial assistance to St. Barnabas Hospital, Ranchi for procurement of Ambulance (TATA Winger).

x) Two (2) nos. water tankers provided to Ranchi Municipal Corporation, Ranchi for supply of drinking water.

20.0 OFFICIAL LANGUAGE POLICY (USE OF RAJBHASHA)Mecon is effectively implementing the Official Language Policy of Govt. of India in its official work and also making all out efforts to achieve the targets fixed in the Annual Programme issued by Rajbhasha Vibhag, Ministry of Home Affairs, Govt. of India. In this regard Hindi Training classes are being organized though out the year for Non Hindi speaking employees and Hindi workshops are being organised for the employees having proficiency in Hindi. Symposia are also organised to encourage use of Hindi in Official work. The website of the company has also been prepared in Hindi.

"Hindi Pakhawara" was observed in MECON at Head Office as well as in all site offices of the company from 14.09.2011 to 28.09.2011. On this occasion all employees took a pledge to increase use of Hindi in their day to day official work. During the "Hindi Pakhawara" competitions of various nature were also organized at Head Office and other offices of the Company. These include Essay, Poetry Recital, Hindi Quiz (especially for Class IV employees), Noting/Drafting, Debate Competitions. A special Hindi workshop on the subject "Karyalayin Kam-Kaj Me Hindi" and two Rajbhasha symposia

were also organised during the Pakhawara on "Unicode Ke Jariye Computer per Hindi Me Kam-Kaj Me Vridhhi". The company also participated in All India Rajbhasha Technical Seminars organized by SAIL, Delhi and RINL/VSP, Vishakhapattnam in a big way and presented papers on various topics of the Seminar. Your company has also been awarded first prize by Rajbhasha Sansthan, New Delhi for its outstanding contribution in the field of Rajbhasha Hindi Implementation. Director (Engineering) of the company received the award in a National level Seminar at Dalhausi (H.P.). On the occassion, an article entitled "Aaj ke Badalte Parivesh Me Rajbhasha Hindi Ko Aur Adhik Prabhawi Banane Me Soochna Prodyogiki Ki Bhoomika" written by GM (P&A) & Manager (Rajbhasha) also got First Prize. A five days condensed Translation training programme in association with Govt. of India, Ministry of Home, Deptt. of Official Language was also organized during 12-16 March, 2012 in which over 35 participants were given practical training in Translation work.

In addition a Hindi House Mazagine - "MECON BHARATI", which provides platform for Employees for creative writing in Technical field in Hindi is being published regularly. News items in Hindi are also being published in the quarterly in-house journal 'Mecon Sansar' of the company.

21.0 VIGILANCEThe Vigilance set-up of the Company has been functioning independently under Chief Vigilance Officer since its establishment. Due to non posting of full time CVO, Sri C.B. Paliwal, CVO (SAIL) took over the additional charge of CVO MECON on 20.07.2010. Sri Paliwal relinquished the charge of CVO,



27

MECON on 10.01.2012. Presently, Vigilance Department is functioning under Sri Shiv Raj Singh, CVO (HSCL & BGC) who took over the additional charge of CVO MECON on 30.01.2012. Vigilance activities at regional / site offices are being looked after by Vigilance Officers posted in those offices.

Emphasis is laid on preventive vigilance, spreading awareness, surveillance and analysis of system & procedures in detail to ensure optimum utilization of resources, appropriate & timely decisions, corrective action against defaulters and transparency & accountability in the system. A number of suggestions given by Vigilance Department for systems improvement and stream lining various procedures have been implemented and this process is continuing.

Surprise Checks (13 nos.) and Regular Checks (22 nos.) have been conducted regularly to detect loopholes in the system for irregularities. Corrective measures for administrative reforms and system improvements are suggested.

Complaints as & when received are investigated promptly. Sensitive areas have been identified for job rotation which is being effected continually without hampering the work. Various steps are being taken on phase-wise basis for leveraging of technology to increase transparency. On-line submission of Annual Property Returns (APR) has been introduced in MECON in January 2012 and submission of APR for the year 2011 by MECON employees is almost complete and more than 97% of employees have already submitted their APR for the year 2011.

Your Company is pleased to inform that Vigilance Department, MECON, Ranchi has its own Vigilance Quality Manual and follows well-established Quality Management System ISO 9001:2008. ISO 9001:2008 accreditation has been received from TUV Nord India Pvt. Ltd. Surveillance Audit for the year 2011 has been conducted by TUV in October 2011and TUV has expressed satisfaction over Quality Management System being followed by Vigilance Department.

MECON has signed Integrity Pact (IP) with 27 suppliers/contractors for order value more than ̀ 5.0 crore since adaptation of IP in the year 2007. No problem / complaint has been faced

/ received by MECON in the implementation of Integrity Pact.Vigilance Awareness Week was observed from 31st October to 5th November 2011 at Head Office, Ranchi along with Town Administration & Construction Department (TA&CD) and Ispat Hospital and at all Regional / Site offices of MECON. This year the main focus of observing Vigilance Awareness Week was “Participative Vigilance”. Various aspects covered were Purchase Procedure of MECON, Rules & Regulations of Purchasing, Conduct, Discipline and Appeal (CDA) Rules of MECON and Preparation of Technical Specification and Scrutiny – 'Vigilance Aspects. Debate on Anti-Corruption Topic – 'Vigilance : Perception and Reality' was also organized during this period.Vigilance Department has redesigned its vigilance page on MECON website and made it more informative and user friendly. MECON has sponsored the book “Handbook of CVC Circulars and Guidelines” compiled by CVO, HSCL and published by HSCL. A softcopy of the book is also made available on MECON website for the use of all interested.

22.0 RIGHT TO INFORMATIONIn line with the directives of the Government of India, your Company has implemented the Right to Information Act, 2005 from the date of its implementation. All relevant manuals pertaining to RTI Act, 2005 have been hoisted on the Company’s website www.meconlimited.co.in w.e.f. 19.09.2005 and are timely updated. A Public Information Officer (PIO) has been nominated by the Management at its Headquarters and various Asst. Public Information Officers (APIO) have been nominated at various Regional and Site offices of the Company. The queries coming to the Company from the public are being attended to by these nominated officials and replied back to the applicant by the Public Information Officer within the stipulated time period. All the statutory returns are timely uploaded on the Company’s web site and also e.filed with the Ministry of Steel.

23.0 BOARD OF DIRECTORS Shri M.N. Sharif has been appointed as Director (Technology) of the Company on 12.12.2011.

Shri K.K. Mehrotra, Director (Engineering) of the Company has been appointed as Chairman-cum-Managing Director on 10.02.2012.



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reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of knowledge and abilities;The Directors had prepared the accounts for the financial year 2011-12 on a ‘going concern’ basis.

28.0 ACKNOWLEDGEMENTYour Directors are pleased to place on record their appreciation of the contribution of all concerned towards the successful working of the Company during the year. The Directors also express their sincere and grateful thanks to the Company’s trusted clients, suppliers, sub-contractors and other partners & stakeholders in business for enabling it to perform up-to the expectations of the customers.

Your Directors gratefully acknowledge the support, cooperation and guidance received from the Ministry of Steel, Government of India and various other Ministries, Govt. of Jharkhand and Departments of the Central and State Governments and Indian Embassies abroad.

Your Directors also place on record their appreciation and also acknowledge the dedicated efforts of its employees at all levels for smooth functioning of the Company.

For and on behalf of theBoard of Directors of

MECON LIMITED

K.K. MehrotraChairman-cum-Managing Director

Place : RanchiDate : 25.06.2012

Shri A.K. Ghosh, Director (Commercial) retired from the service of the Company on attaining the age of superannuation on 29.02.2012.Shri A.K. Tyagi has been appointed as Director (Commercial) of the Company on 01.03.2012.Shri J. Mathew, Director (Projects) retired from the services of the company on attaining the age of superannuation on 30.04.2012.Shri S. Chattopadhyay has been appointed as Director (Project) of the company on 01.05.2012.

24.0 MANAGEMENT DISCUSSION & ANALYSIS REPORTThe Management Discussion & Analysis Report covering the performance and outlook of the Company is enclosed vide Annexure-II.

25.0 CORPORATE GOVERNANCEThe company has complied with the requirements of Corporate Governance. The detail in this regard forming part of this report is enclosed vide Annexure-III.

26.0 AUDITORSM/s. B. Gupta & Co., Chartered Accountants, 4th Floor Sukirti, S P Verma Road, Patna - 800001 were appointed as Statutory Auditors by the Comptroller & Auditor General of India to audit the accounts of the Company for the financial year 2011-2012. They have also been assigned to carry out the audit under Section 44AB of the Income Tax Act, 1961 for the year 2011-2012.

27.0 DIRECTOR’S RESPONSIBILITY STATEMENTPursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Director’s Responsibility Statement, it is hereby confirmed that:

In the preparation of the Annual Accounts for the financial year ended 31st March, 2012, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were



29

ANNEXURE TO DIRECTORS’ REPORT FOR THE YEAR 2011-2012

TECHNOLOGY INNOVATIONANNEXURE - I

Form-B

Form for disclosure of particulars with respect to technology innovation

Sl. No. Technology Benefits derived

1 Application of SS foil at oven roof and regenerator face.

Air tightness to prevent fuel gas, waste gas and air leakage from battery which largely improves heating efficiency of Coke Oven Battery. This technology is already implemented and successfully running in COB # 1,2 & 5 of BSL and is under implementation at COB # 6, RSP and COB # 2, DSP.

2 Sliding joint at oven roof. It facilitates free expansion between Silica and Fireclay brick work at oven roof and restricts development of cracks and open joint in Brick work at oven roof during heating of Coke Oven Battery. This is successfully implemented in COB # 4, RSP, COB # 1,2 & 5 of BSL and COB # 10 of ISP and is under implementation in COB # 2, DSP.

3 Bitumen sealing between Isolation valves of Gas collecting main and Goose necks of coke oven batteries

Earlier this joint was filled with rope caulking resulting in gas leakages. Due to bitumen sealing, gas leakage is arrested and only bitumen topping up is required once in 6 months compared to regular maintenance requirement of rope joints. This has been implemented in Rebuilding of Coke Oven Battery No. 1,2 & 5 of Bokaro Steel Plant which has been commissioned during 2011-12.

4 Hydraulic reversing winch for reversing of heating system of coke oven batteries.

PLC operated hydraulic reversing winch in place of electromechanical winch has resulted in smooth interfacing with level-2 automation for Coke Oven heating control system. Due to smooth operation with a present load there is no danger to damage of reversing system. This has been implemented in all recent projects and being implemented in RSP COB # 6 and DSP COB #2 under installation.

5 Charging car Rails supported on heating walls of coke oven batteries.

Load of charging cars is transferred to only heating walls instead of ovens which are weak and used to get damaged over a period of time. This has been implemented in all recent projects and being implemented in RSP COB # 6 and DSP COB #2 under installation.

6 Development of Blast Furnace(BF) design for technology upgradation / capacity enhancement in Mini Blast Furnace(MBF) section.

The existing MBF of 249m3 useful volume having design from TATA Korf (TRF) at Tata Metaliks, Kharagpur is being upgraded to 295 m3 useful volume. This upgraded blast furnace shall have soft water high pressure open loop cooling system with cast/ SG Iron stave coolers. The quality of refractory has been improved to take care of future provision of Pulverised Coal Injection (PCI). The new MBF will now be free standing, four poster design incorporating Bell Less Top (BLT) charging system. The above upgradation will enhance production and higher campaign life. There is a huge business potential as many MBF operators in the country are showing keen interest in adopting this developmental work.



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7 Hot Blast Stoves for M/s Usha Martin Ltd. (UML) for their existing MBF at Tatanagar and Hot blast stoves for M/s Aparant Iron & Steel Private Ltd (AISL), Goa.

The stoves design being provided by MECON has pipe in pipe ceramic burner replacing the existing metallic blast pre-heater for achieving Hot Blast Temperature up to 1100oC from existing 750oC for M/s UML and with improved design for better mixing of gas/ air for M/s AISL. This has resulted in coke rate reduction of 25 – 30 kg/thm and corresponding increase in hot metal production.The Hot blast stoves at M/s UML are commissioned and already achieved its designed performance.MECON has also provided the similar technological upgradation of Hot Blast Stoves for M/s AISL, Goa and is likely to be commissioned by June, 2012.

8. Upgradation and capacity enhancement of Korf MBF-1 at Usha Martin Industries, Tatanagar into a state of technology blast furnace.

The existing mini blast furnace (MBF) of 215m3 useful volume having design from TATA Korf (TRF) at Usha Martin Industries, Tatanagar is being upgraded to 245 m3 useful volume. This upgraded blast furnace shall have soft water high pressure closed loop cooling system with SG Iron stave coolers. The quality of refractory has been improved to take care of high hot blast temperature with incorporation of thermal monitoring at MBF and has the future provision of PCI injection. The new MBF will be free standing, four poster design incorporating MECON designed top charging system. The above upgradation is expected to be commissioned in Feb, 2013 and shall result in increasing production and higher campaign life. This furnace is having improved technological features than the project executed at Tata Metaliks, Kharagpur. This continuous improvement in upgradation in MBF has a huge business potential as many MBF operators in the country are showing keen interest in adopting this developmental work.

9. Development and implementation of slag detection system from converter and caster.

(Patent application filed vide Application No. 1247/KOL/2009).

Based on the principle of emissivity difference between liquid steel and slag, infrared camera based slag detection system for caster is developed and based on the vibration difference between flowing steel and slag, the slag detection system for caster is developed. The project is sponsored by Ministry of Steel and is completed successfully.

10. Thermoelectrically heated oil filter for automobiles in cold region.

(Patent application filed vide Application No. 1429/KOL/2007)

Using thermoelectrics in conjunction with a thermal storage device is mainly to overcome cold starting problem in automobiles arising due to extremely low temperature. Thermal storage device acts like a heat reservoir and thermoelectyric modules acting as heat pumps extract heat from the thermal storage device and pump it to the filter thereby enabling quick starting of the automobiles in cold environments. It has been experimentally proved that an automobile can be started within 100 seconds using proposed device.

11. Development of Continuous NOx Monitoring System.

Patent filed in 2009, Vide Application No. 1248/KOL/2009

The main objective of the project was to indigenously develop continuous Nox monitoring system using NDIR principle and to field test the system in a running stack. It was tested in three locations i.e. Coke Oven Battery No. 10, Power Plant No. 1 and Plate mill area of Bhilai Steel Plant, SAIL Bhilai. Monitoring of Oxides of nitrogen in the flue gas is essential to monitor and control as the emission are very harmful to the environment and to the society. The system will help steel plants and all industries in general.



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12. Waste heat recovery system in Sinter Plant No.1 & 2 of RINL

MECON is rendering consultancy & detailed engineering services for the implementation of waste heat recovery from Sinter Plant No.1 & 2 of RINL. In this waste heat recovery system, the sensible heat from sinter coolers 1 & 2 shall be utilized to generate medium pressure steam in a waste heat recovery boiler. In turn this steam will be utlised to generate 20.6 MW power through steam turbine generator set. The above waste heat recovery is environmental friendly which reduces dust emission as well as saving in fuel of equivalent to 20.6 MW of power. This has resulted in an effective CO2 emission to 117,000 ton per annum. However, the basic know-how has been provided by JP Steel Plantech, Japan.Modification in Sinter Plant No.1 of RINL to implement the above waste heat recovery system has already been carried out. Modifications in Sinter Plant No.2 shall be implemented during the next available shut down.

13. Benzol Recovery & Distillation Plant at RINL. MECON designed Benzol Recovery & Distillation Plant to process 60,000-66,000 NM3/hr of Coke Oven Gas is under installation at RINL, Vizag. This will enable recovery of Crude Benzol from Coke Oven Gas, which on further processing in existing HRED unit shall yield Benzene, Tolune, Xylene etc the valuable chemicals.Your Company has modified the design of condenser cooler for CB-I from fixed tube to floating head. This is a major technological improvement in equipment design to facilitate cleaning of tubes which gets chocked with high boiling point polymers.

14. 3D Modeling and Numerical Simulation of Heat Transfer of Thermoelectric Cooling/Heating Helmet.

This theoretical simulation helps us in designing the system correctly as per the requirements. This is the latest practice adopted for any complicated system before going for prototype manufacturing to avoid failure. This simulation gives the thermal profile/temperature distribution at the interior of the helmet; which other way assess the suitability of the design before going for manufacturing.

15. Development for Caster Slag Detection through Imaging Technique.

Detection and removal of slag from the molten metal is an important aspect of steel making process. The application of infrared imaging, spectroscopic method and other contact type slag detection methods are inappropriate as the slag flows through the shroud in a casting operation. The detection of vibration of the shroud due to slag flow has a problem of noise due to other vibrating sources in the vicinity. In the present work, a simple imaging technique is developed for caster slag detection. The imaging technique is based on the detection of sudden increase in the light intensity by a CCD camera as the slag floats immediately as it enters the tundish through the shroud. The camera is connected to a computer and the software for processing the on-line image is developed. As the detected light exceeds the predetermined limit, the system generates the indication of the onset of slag. The system was tested in RSP, Rourkela. This system is envisaged to be patented in near future.

16. On-Line Monitoring of Flue Gas(es). The objective of this study is to develop low cost and reliable system for on line monitoring of flue gases as per CPCB norms. Simulation results obtained, based on Non-dispersive Infrared (NDIR) Technique, are very encouraging. User friendly software has been developed for calibrating and monitoring concentrations of different flue gases. These results help us to develop a complete system for on-line monitoring of flue gases like CO, CO2, SO2 , NOx, etc. This system is envisaged to be copyrighted in near future.



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17. Development of Thermoelectrically cooled / heated helmet for industrial applications.

This is a funded project from SDF, Ministry of Steel, Govt. of India. The objective of this development is to provide comfort to industrial workers by providing head cooling and safety requirements, when they work at high temperature zone, which in turn increase the productivity and minimize the wastage of time and man-hour. As per the present practice, a worker has to wait for the temperature to cool down to workable temperature before they can think to start work in this zone.

18. Design, simulation & selection of components for the development of Continuous Multi Gas Monitoring System. (MOU project for 2011-12)

MECON has applied Nondispersive Infrared (NDIR) and Chemical Sensor Technique together for continuous monitoring of stack gases. NDIR is used for measuring concentration of CO, CO2, SO2& NOx whereas chemical sensor technique is used for measuring concentration of O2 only. The application of this hybrid technique will help in monitoring the concentration of stack gases for controlling the emission and to protect environment as per pollution control norms.

19. Basic Process and Mechanical Design of decanter.

To sort out the problem of frequent break down of decanter (380 m3) at RSP COB # 4, following design improvement have been done.i. Scraper chain link hardness increased.ii. Provision of split housing block, split bush and lock nut in

tensioning devise.



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1.0 INTRODUCTIONMECON has effectively handled the congenital role and has over the years, developed core competency in providing engineering services to Iron & Steel Industry. As the business prospect in services industry is directly proportional to the investments in respective sector, the assumption of immunity from the cyclical nature of parent sector shall lead to a erroneous belief. The brunt endured during 1998-99 to 2003-04 owing to downturn in Iron & Steel Industry bears testimony to the statement.

The company has since then taken a number of steps for speedy recovery and to avoid the probability of any undesired condition as seen earlier. The company has diversified its activities in the areas of non-ferrous, chemical plants, Oil & Gas, Power Plants, Ports & Materials Handling and Defence Projects. The operations have been organized under four SBU’s viz Metals, Oil & Gas, Power and Infrastructure for efficient execution of projects.

The company is looking forward to tap the opportunities unleashed by the manifold investment plans upcoming for the steel and other diversified sectors coinciding with the company’s line of business. Endeavor is towards big stride to strengthen the capabilities in the diversified areas while stepping up the engineering prowess to maintain core competency in Iron & Steel Sector.

2.0 COMPANY MISSIONTo develop into an internationally recognized centre of excellence for providing quality services in technical consultancy, design & engineering, design & supply of plant, equipment & systems and project implementation from concept to commissioning for industrial development & up gradation ventures, development of infrastructure and other service sectors.

3.0 SWOT Analysis

StrengthsÇ% Experience in setting up of projects in green /

brown fields from concept to commissioning

on single point responsibility basis including consultancy, design and detailed engineering capabilities.

Ç% Multi-disciplinary highly experienced and capable pool of engineers / technologists in various specialized technical disciplines.

Ç% Vast data base and reference materials.

Ç% Capability in equipment & system design and supply & execution.

Ç% Market recognition in core competence area of Metals.

Ç% Capability in environmental impact assessment & environmental management plans.

Ç% Geographically located in strategic business areas.

Ç% Good credential with financial institutions and regulating authorities.

WeaknessesÇ% Technology gap / adaptation to new

technologies in identified areas would need to be addressed through tailor made training programmes and association with leading technology suppliers.

Ç% Will take time to consolidate strength in new strategic businesses.

Ç% Bunched retirement of experienced personnel.

Ç% High manpower & overhead costs as compared to some private competitors.

Ç% Non-availability of experienced manpower for project execution activities at sites particularly in middle level.

Ç% Low investment on HRD.

Ç% Inadequate proactive marketing efforts and publicity.

Ç% Inadequate follow-up, analysis and clients complaint redressal mechanism.

Ç% Public sector limitations in operational area.

OpportunitiesÇ% Major investments in steel/ other metals.

ANNEXURE-II

MANAGEMENT DISCUSSION AND ANALYSIS REPORT



34

Ç% Investments in other diversified sectors viz. power (including nuclear), oil & gas & infrastructure / defence.

Ç% Tie-ups with strategic technology suppliers/ vendors / contractors for synergising mutual strengths.

Ç% Growing business opportunity in environment management.

Ç% Identification and break-through in new sectors such as nuclear power, industrial / urban infrastructure, water management, slurry & water pipelines, sea-water desalination plants, LNG terminals, renewable energy etc.

Ç% Business opportunity on EPC basis in beneficiation/agglomeration technologies.

Threats Ç% Mushrooming of consultancy companies,

operating on low margins.

Ç% Trend of setting up in-house consultancy units / wings by some prominent clients.

Ç% Foreign equipment suppliers are now giving consultancy services as part of the complete package.

Ç% Stringent/irrelevant technical pre-qualification criteria for consultancy as well as supply jobs.

Ç% High fluctuating business in case of continued dependence on Metals.

4.0 BUSINESS OUTLOOK

General Economic Environment;Global growth is projected to drop from about 4 percent in 2011 to about 3½ % in 2012 because of weak activity during the second half of 2011 and the first half of 2012. This is mainly on account of the damage done by deteriorating sovereign and banking sector developments in the EURO area. The reacceleration of activity during the course of 2012 is expected to return global growth to about 4% in 2013. The EURO area is still projected to go into a mild recession in 2012 as a result of the sovereign debt crisis and a general loss of confidence, the effects of bank deleveraging on the real economy, and the impact of fiscal consolidation in response to market pressures. Because of the problems in Europe, activity will continue to disappoint for the advanced economies as a group,

expanding by only about 1½ % in 2012 and by 2% in 2013.

Real GDP growth in the emerging and developing economies is projected to slow from 6.25 % in 2011 to 5.75 in 2012 but then to reaccelerate to 6% in 2013, helped by easier macroeconomic policies and strengthening foreign demand.

As per IMF forecasts, 2013 is expected to see recovery in many parts of the world. World economy is likely to grow by 3.5% in 2012 while advanced economies together is expected to grow by 1.4%. USA and Japan is likely to have good growth of about 2% during 2012. Developing economies is expected to grow by 5.7% in 2012 which is likely to increase to 6.05 in 2013. Of the developing countries, China and India are likely to take the lead in economic growth with 8.2% and 6.9% respectively in 2012. The projected growth rates for China and India are 8.8% and 7.3% respectively for 2013 indicating gradual recovery. For economies like Latin America and Middle East, the situation likely to remain grim.

Indian EconomyAfter facing the downward impact of economic meltdown during 2008-09, the Indian economy was on the recovery path in 2009-10 with a real economic growth of 8.4% in 2009-10 and then, again entered in to the downward growth phase. During 2010-11 and 2011-12, real GDP growth declined to 7.9% and 7.0% respectively. For the 11th Five Year Plan (2007-12), Indian economy grew by a CAGR of 7.9%. Industrial growth has been moderate in 2010-11 (8.2%) although some strong effects of economic melt-down was visible. Within industry, the manufacturing sector, accounting for 77% of industrial output, has shown 8.9% growth acceleration in 2010-11 which is less compared to the growth achieved in 2009-10 (10.9%). Among the manufacturing sector, basic metal sector grew by 8.8% in 2010-11. Electricity sector has shown a dismal pictures registering a growth of 5.5% only in 2010-11.

Moreover, Government of India has given special thrust on the infrastructure sector as a whole. 12th Five Year Plan, Government of India is likely to put thrust on infrastructure development and hence, huge investment plans are expected in sectors like power, roads, railways, ports, civil aviation, telecommunications, irrigation, drinking



35

water, sanitation, storage, and warehousing. This will help in achieving a robust and inclusive growth in future.

The Company’s business procurement and turnover registered phenomenal growth in recent past few years despite economic meltdown. Meanwhile the world economy in general and Indian economy in particular is slowly on recovery path. As Indian economy is expected to recover slowly in 2012-13 and this trend is likely to continue in future, the business procurement prospect for the company is expected to be encouraging in the forthcoming years 2013-14 onwards.

capital items and approving of revenue expenditure.

ÇÇ Well framed policies on capital asset procurement.

ÇÇ Well planned budget for revenue expenditure and continuous monitoring.

ÇÇ Periodical meeting at all functional levels and also at corporate level for reviewing and achieving the targeted results.

ÇÇ 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. BUSINESS PROCUREMENT

Total ` in Crore

Sl. No.

SBU 2009-10 2010-11 2011-12 2012-13 * Consultancy EPC Consultancy EPC Consultancy EPC Consultancy EPC

1. Metal 42.63 Nil 487.18 6.60 1345.86 2.06 210 2502. Power 18.55 Nil 31.11 Nil 2.62 Nil 30 Nil 3. Oil & Gas 46.95 Nil 19.46 107.03 14.29 Nil 30 Nil4. Infrastructure 17.49 Nil 21.26 Nil 11.16 Nil 15 Nil

Total (`) 125.62 Nil 559.01 113.63 1373.93 2.06 285 250Grand Total (`) 125.62 672.64 1375.99 535

* Projected/Estimated

5.0. INTERNAL CONTROL SYSTEM AND ADEQUACY THEREOFMECON 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 systems are :

ÇÇ Well defined delegation of power with sanctioning limits for purchasing of

ÇÇ Well defined plan to invest surplus fund most judicially and reporting thereof to the Apex management regularly.

ÇÇ The company has an extensive programme of carrying out internal audits, management and financial reviews to ensure greater efficiency, transparency and accountability.

6.0 DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCEDuring the Financial Year 2011-12, MECON LIMITED achieved the best ever Turnover at `64,383.43 lakhs. Turnover from Consultancy Jobs increased to `45,792.03 lakhs, mainly due to substantial increase in consultancy order execution for different Steel Plants. Turnover from Consultancy Jobs constituted 71.12% of the total turnover and was higher by 8.20% over the previous year. Turnover from Turnkey Projects constitute 28.88% of total turnover. However, total turnover has increased by 0.38% over the previous year.

Profit before tax for the year 2011-12 is ̀ 20,153.53 lakhs which is higher by 43.00% over previous year. Higher volume of business handled with



36

improved efficiency and cost control measures contributed to record performance. Interest and Finance Costs were lower by `7.00 lakhs.

During the year, the company continued its thrust on debt reduction and fund management. Overall debt of the company has reduced by `3,500.00 lakhs. This enabled the company to improve its debt/equity ratio and helped in reducing its total interest burden. During the year 2011-12 the company has redeemed preference shares (1/5th) ` 1260.00 lakhs as per terms of issue to the Govt. of India. During the Financial Year 2011-12, the company has earned interest of `5,413.13 lakhs through short-term deposits with scheduled banks.

Due to implementation of Revised Schedule VI during 2011-12, the assets & liabilities are classified as current & non – current, expenditure & incomes are regrouped / recast as per the prescribed form.

The highlights of financial performance of the company for the year 2011-12 w.r.t. 2010-11 are mentioned below as per revised schedule VI.

(` in lakhs)Sl. No.

Particulars FY 2011-12

FY 2010-11

a) Turnover 64,383.43 64,137.96

b) Interest from Bank 5,413.13 3,617.80

c) Employee Benefit Expenses 26,047.15 29,644.82

d) Purchase of Equipments & Direct Expenses

24,865.51 19,730.36

e) Other Expenses 7,142.15 4,603.67

f) Profit Before Tax 20,153.53 14,092.80

g) Profit After Tax 13,636.35 9,368.49

h) Fixed Assets including capital work in progress (Gross Block)

12,632.32 12,349.26

i) Cash and Cash Equivalents 72360.21 60,216.70j) Job-in-Progress 478.91 408.16k) Trade Receivables (Current &

Non Current)16,119.67 21,467.88

l) Trade Payables (Current & Non Current)

19,512.05 19,798.10

m) Loans and Advances(Current & Non Current)

6,987.15 5,676.57

n) Other Assets & investment (Current & Non Current)

13,310.63 9,216.20

o) Other Liabilities & Borrowings (Current & Non Current)

63,359.12 61,987.19

p) Net Worth 31,497.73 20,397.27q) Share Capital 9,053.84 10,313.84r) Capital Employed 37,945.00 31,164.26

Due to improved fund position as result of stringent collection initiatives and improved treasury management, short-term deposit with scheduled banks has increased by `12,392.15 lakhs.

Employee Benefit expenses has decreased over the previous year due to P.F. & Gratuity provision as per actuarial valuation.

Investment towards fixed asset has increased due to purchase/capitalization of fixed assets to provide the infrastructure to cushion the increased business of the company.

Trade Receivable has decreased due to collection / provision for bad and doubtful debts made in the books during the year.

VRS Loan has decreased by ` 3500.00 lakhs.

Due to improvement in Financial and Operational performance, the Capital Employed has increased by `6,780.74 lakhs, the Net Worth of the company has improved by `11,100.46 lakhs compared to previous year.

7.0 HUMAN RESOURCE DEVELOPMENTIn the present entwined business scenario of high competitiveness, rising privatization, with the up-rise of globalization, it requires high emphasis to be given for nurturing and nourishing the Human Capital of the organization. Training and Development activities play a vital role by invigorating the continuous endeavor to keep the knowledge domain abreast with the latest technology, software and skill. MECON, being an Engineering Consultancy having diversified field of activities, requires our incessant attention to maintain a cadre of competent manpower with updated skills and we accomplish that by providing need based training to all our employees.

HRD has achieved 1741.5 Mandays against the MoU target of 1190 Mandays for training in 2011-12. This achievement of MoU target is rated under the ‘Excellent’ category.

Key activities undertaken by HRD in the year 2011-12 are mentioned below:

Ç% During the period 2011-12, employees have been exposed to all areas related to MECON’s arena of activities. Technical programs in the field of STAAD Pro, PLC/SLC Program Using RS Logics, Auto CAD, etc. and Managerial programs on Strategic



37

Management, Leadership, Communication, Business Negotiation Skills, etc. were conducted In-house to amplify our coverage of employees. While numerous programs have been conducted externally in the technical as well as technology related areas like Green Building concept, Ultrasonic Testing (UT) Level – II & Radio Testing (RT) Level- II, Siemens PLC S7-300, IPV4 to IPV6 Conversion, FINEX Technical Application, etc. to maintain our upper hand in our line of business. Additionally, some of the Managerial programs organized externally which have added great value to MECON are Achieving Managerial Excellence, Marketing Decision Making, Corporate Sustainability - Environmental Opportunities and Competitive Advantages, etc.

Ç% The training programs have not been confined to programs of business importance only rather we have enhanced our reach to programs on Corporate Social Responsibility, RTI Act 2005, Reservation in Services, Environmental Assessment, etc.

Ç% HRD has conducted many In-house programs this year and used its own personnel as Faculty as well. Two such training programs are ‘Enhancing Executive Efficacy’ and ‘Communication & Presentation Skills’.

Ç% The Vocational Training coordinated by HRD has been upgraded as the students joining in batch on the dates specified by HRD are undergoing an Orientation session, Vocational Training Certificate has been newly designed and implemented, Feedback of Students are taken after completion of Vocational training.

Ç% The HRD Auditorium is getting renovated to get a new look and be operational with latest technology equipments to handle further training sessions and presentations in a more competent way.

8.0 TECHNOLOGICAL UP-GRADATIONIn the traditional areas of its operation, high level of technological and engineering excellence constitutes the core strength of MECON. This has been achieved through a continuous process of acquiring, absorbing and innovating state-of-the art technologies to suit the needs of various clients.

The next level of up-gradation shall be based on the premise of liberalization which has gradually aligned the Indian markets to global competition. This very characteristic has been a catalyst to aggravate concerns over direct transfer of technology through long term training programs by organizations competing in identical opportunity space. Such a scenario renders know-how license agreements and general collaboration/co-operation agreements as a win-win situation for organizations sharing common business interest. Any such initiative is required to be complemented with dynamic process of acquiring and absorbing knowledge, building up requisite data base and using these data for a focused research/in-house development to bridge the identified technology gap.

Some of the measures being adopted are :

i. Exposure to global technology and tie-up in potential areas.

ii. Empanelment of experts in need-base areas.

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 inside the country and abroad.

In addition to above some of the points which are being considered for continual improvement are :

i. Reinforcing our strengths in the metals sector.

ii. Developing core competency in some of the diversified areas.

iii. Sustained growth with sufficient order book position and cost effective operations.

iv. Enhancing productivity.

v. Timely execution / completion of projects / assignments.

9.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)MECON has undertaken a number of activities as a part of its Corporate Social Responsibility (CSR). These can be broadly classified as follows :



38

ÇÇ Community education scheme;

ÇÇ Resource generation scheme;

ÇÇ Vocational training;

ÇÇ Community health programme;

ÇÇ Scheme for aiding differently abled;

ÇÇ Afforestration programme;

ÇÇ Village/Rural based programmes;

ÇÇ Other welfare activities;

ÇO Support to Voluntary organisations/Non-Governmental organisations

ÇO HIV/AIDS awareness programme

ÇO Sports promotion

ÇO Providing drinking water tankers

During 2011-2012, the various CSR activities carried out are as follows :

Ç% Running of 13 nos. community education centers for the poor children in slum areas/backward areas/rural areas in Ranchi & Khunti districts.

Ç% Running of 7 nos. resource generation centers (stitching centers) in slum areas/backward areas for the womenfolk in Ranchi district.

Ç% 21 students in different trades were admitted for Vocational training for the session 2011, out of which 7 students were declared successful.

Ç% 15 nos. health camps were held wherein around 2,770 patients were covered & free medicines were distributed.

Ç% Provided technical & financial assistance for construction of a 40-bedded hostel at Cheshire Home (A home for the disabled), Bariatu, Ranchi.

Ç% Provided financial assistance to Cheshire Home, Ranchi for procurement of Ambulance (TATA Winger).

Ç% Provided financial assistance to Cheshire Home, Ranchi for procurement of Offset printing machine.

Ç% Provided technical & financial assistance for construction of a 26-bedded boy’s hostel (1st floor) at St. Michael’s school for the Blind, Old Hazaribagh Road, Ranchi.

Ç% Provided financial assistance to St.

Michael’s school for the Blind, Ranchi for procurement of Vehicle (TATA Winger).

Ç% Providing financial & part technical assistance to Brajkishore Netraheen Balika Vidyalaya, Bargain, Bariatu, Ranchi for construction of Girls’ Hostel building.

Ç% Provided financial assistance to Brajkishore Netraheen Balika Vidyalaya, Ranchi for procurement of Vehicle (TATA Winger).

Ç% Providing training to 45 (forty five) villagers of the tribal villages viz. Vil.-Belagara, Maranghada, Dist.-Khunti, Vil.-Sungi, Block-Karra, Dist.-Khunti & Vil.-Pancha, Block-Bundu, Dist.-Ranchi in “Lac Cultivation” at Indian Institute of Natural Resin and Gum (Formerly : Indian Lac Research Institute), Namkum, Ranchi.

Ç% Provided Solar street lights (107 nos.) in following tribal villages,

ÇO At Vil.-Belagara, Maraghada, Dist.-Khunti : 17 nos.

ÇO At Vil.-Sungi, Karra, Dist.-Khunti : 40 nos.

ÇO At Vil.-Pancha, Taimara, Dist.-Ranchi : 35 nos.

ÇO At Vil.-Pandu Toli, Nagri, Dist.-Ranchi : 15 nos.

Ç% Extension of Hockey ground at Vil.-Belagara, Maranghada, Dist.-Khunti.

Ç% Providing complete Hockey kit/set to Village hockey teams of Vil.-Belagara, Maranghada, Dist.-Khunti & Vil.-Sungi, Block-Karra, Dist.-Khunti.

Ç% Organised “Rural football tournament” at “Vil.-Pancha, Block-Bundu, Dist.-Ranchi from 13.10.11 to 15.10.11. (No. of participating teams – 16).

Ç% Organised “Rural football tournament” at “Birsa College Ground”, Khunti from 19.11.11 to 23.11.11. (No. of participating teams – 28).

Ç% Organised “Rural hockey tournament” at “Vil. - Sungi”, Block-Karra, Dist.-Khunti from 28.11.11 to 01.12.11. (No. of participating teams – 24 : men’s & 8 : women’s).

Ç% Organised “Rural football tournament” at “Vil.-Rupru”, Block-Angara, Dist.-Ranchi from 15.12.11 to 17.12.11. (No. of participating teams – 18).



39

Ç% Provided about 575 saplings of mango, litchi, guava, lemon etc., which were procured from Horticulture & Agro Forestry Research Programme (HARP), Palandu, Ranchi and distributed to the villagers of Vil.-Pancha, Taimara, Dist.-Ranchi.

Ç% Provided financial & technical assistance to Yuva Samaj Kalyan Samiti, Koynar Toli, Debadih, Ranchi, for construction of akhra (platform) & tubewell.

Ç% Provided financial & technical assistance to Pramatha Nath Madhya Vidyalaya, Hinoo, Ranchi for construction of class rooms.

Ç% Provided financial & part technical assistance to Vaykti Vikas Kendra, Vil.-Kudri, Dist.-Khunti for construction of Tribal School.

Ç% Provided financial support to Jharkhand Social Revolution & Development Society (JSRDS) “AADYA” for setting up soap manufacturing unit at Vil.-Patra Toli, Balalong, Dist.-Ranchi.

Ç% Adoption of animals (4 nos.) (Tiger named Sugriv – 1 No. & Leopards named Raja,

Seeta & Geeta – 3 Nos.) of Bhagwan Birsa Jaiwik Udhyan, Ormanjhi, Ranchi (For five years).

Ç% Provided financial assistance to Ramakrishna Mission T.B. Sanotarium, Tupudana, Ranchi for procurement of Ambulance (TATA Winger).

Ç% Provided financial & technical assistance to Kissan Uchh Vidyalaya, Ormanjhi, Dist.-Ranchi for construction of class rooms.

Ç% Provided financial & part technical assistance to St. Barnabas Hospital, Ranchi for modification/ renovation for making of ICUs.

Ç% Provided financial assistance to St. Barnabas Hospital, Ranchi for procurement of Ambulance (TATA Winger).

Ç% 5 no. HIV/AIDS awareness programme was also organized, wherein the no. of participants was around 160.

Ç% Provided water tankers for supply of drinking water in remote areas wherever the scarcity of water is acute.

ÇÇÇÇÇÇÇÇÇÇ



40

The Directors present the Company’s Report on Corporate Governance as on 31.03.2012.

1.0 COMPANY’S PHILOSOPHYThe 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 trust on the conduct of its business 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 DIRECTORSYour Company being a Central PSU, appointment/nomination of all Directors is done by the President of India, through the Ministry of Steel. The Chairman-cum-Managing Director and Functional Directors are appointed by 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 Non Official 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 (as on 31.03.2012) :

(i) Functional Directors including

CMD (Whole time) 4

(ii) Part-time Government Directors 2

(iii) Part-time Non-Official Directors 3

Total 9

ANNEXURE-III

REPORT ON CORPORATE GOVERNANCE

2.1 Terms & Conditions of appointment of Board Member : The terms, conditions and tenure of appointment of Chairman-cum-Managing Director as well as Full-time and Part-time Directors are decided by the Government of India, Ministry of Steel.

2.2 Remuneration / Compensation to Board of Directors :The Chairman-cum-Managing Director and Whole-time Directors are paid monthly remuneration as fixed by Government of India. Government Nominee Directors are not paid any remuneration. The Part-time Non-Official Directors are paid sitting fees of `10,000/- per meeting of the Board/Committee attended by them. The Company bears all the expenditure of the Part-time Government Directors and Part-time Non-Official Directors for attending the above meetings.

Details of sitting fees paid to the Part-time Non-Official Directors during the year 2011-12 are as follows:

(In `)

Name of Director (S/Shri)

Sitting Fees Total

Board Meetings

Committee Meetings

Ganatantra Ojha 30,000/- 30,000/- 60,000/-

Mulkh Raj Pasrija 40,000/- 50,000/- 90,000/-

B.Ramesh Kumar 30,000/- - 30,000/-

2.3 Board Meetings :The Board Meets statutorily and also as many times as may be warranted. The Board Meetings are convened by giving appropriate advance notice after seeking approval of the Chairman of the Board / Committee as the case may be. Detailed agenda note are circulated in advance 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) are also permitted.

The Board of Directors oversees all major actions proposed to be taken by the Company.



41

The Board also reviews and approves the strategic and business plans including monitoring corporate performance.

The Board Meetings are held not only at company’s Registered Office at Ranchi, but also at its Engineering Office at New Delhi. The Company Secretary serves as Secretary to the Board Meetings.

2.4 Number of Board MeetingsDuring the year 2011-12, Four (4) Meetings were held, the details of which are given below :

Sl.No. Date of Meeting

Board Strength Number of Directors Present

1 08.06.2011 8 7

2 13.09.2011 8 7

3 09.12.2011 8 8

4 13.03.2012 9 8

Particulars of the Directors including their attendance at the Board Meetings from 1st April, 2011 to 31st March, 2012.

Name of Directors Period No. of Board

Meetings held.

No. of Board

Meetings attended.

I. Whole time Directors

1. Shri A.K.Ghosh, Actg. CMD

(upto 09.02.2012) & Director (Commercial) (upto 29.02.2012)

01.04.2010 to

29.02.2012

THREE THREE

2. Shri K.K. Mehrotra Director

(Engineering) (upto 09.02.2012) & CMD (w.e.f. 10.02.2012)

01.04.2011 to

31.03.2012FOUR FOUR

3. Shri J. Mathew Director (Projects)

01.04.2011 to

31.03.2012FOUR FOUR

4. Shri M.N. Sharif Director (Technology) w.e.f 12.12.2011

12.12.2011 to

31.03.2012ONE ONE

5. Shri A.K. Tyagi Director

(Commercial) w.e.f. 01.03.2012

01.03.2012 to

31.03.2012 ONE ONE

Name of Directors Period No. of Board

Meetings held.

No. of Board

Meetings attended.

II. Part-time Government Directors

1. Shri S. Machendra Nathan, IAS,

AS & FA to the Govt. of India, Ministry of Steel, New Delhi.

01.04.2011 to

31.03.2012

FOUR FOUR

2. Shri U.P.Singh, I.A.S Joint Secretary to the Govt. of India,

Ministry of Steel, New Delhi.

01.04.2011 to

31.03.2012

FOUR THREE

III. Part-time Non Official Directors

1. Shri G. Ojha Director.

01.04.2011 to

31.03.2012

FOUR THREE

2. Shri M.R. Pasrija Director.

01.04.2011 to

31.03.2012

FOUR FOUR

3. Shri B. Ramesh Kumar,

Director.

01.04.2011 to

31.03.2012

FOUR THREE

3.0 BOARD COMMITTEES3.1 Audit Committee

The Audit Committee in place as on 31.03.2012 consists of two Part-time Non-Official (Independent) Directors and one whole time director. The Chairman of the Audit Committee is a Part-time Non-Official (Independent) Director. The Audit Committee as on 31.03.2012 comprises of the following Directors.

Members of the Audit Committee as on 31.03.2012 are :

1. Shri M.R. Pasrija, Director - Chairman

2. Shri G. Ojha, Director - Member

3. Shri J. Mathew, Director - Member (Projects)

The Role and Powers of the Audit Committee are as per 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 Secretary during the meeting of the Committee.



42

Number of Audit Committee Meetings :

During the year 2011-12, 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 08.06.2011 3 3

2 13.09.2011 3 3

3 09.12.2011 3 3

4 12.03.2012 3 2

Particulars of the Directors including their attendance at the Audit Committee Meetings from 1st April, 2011 to 31st March, 2012.

Name of Directors PeriodNo. of Audit Committee

held

No. of Audit Committee Meetings attended

Shri M.R. Pasrija, Director & Chairman, Audit Committee.

01.03.2011 to

31.03.2012

FOUR FOUR

Shri G. Ojha, Director &Member, Audit Committee.

01.03.2011 to

31.03.2012

FOUR THREE

Shri J. Mathew,Director (Projects) & Member, Audit Committee.

01.03.2011 to

31.03.2012

FOUR FOUR

3.2 Remuneration CommitteeThe Remuneration Committee in place as on 31.03.2012 consists of two part-time directors and one whole time director. The Chairman of the Remuneration Committee is Part-time Non-Official (Independent) Director. The Remuneration Committee meets as and when required. The Remuneration Committee in place as on 31.03.2012 comprises of the following Directors.

Members of the Remuneration Committee as on 31.03.2012 are :

1. Shri B.Ramesh Kumar, Director - Chairman

2. Shri U.P.Singh, IAS, Director - Member

3. Shri K.K.Mehrotra, CMD - Member

3.3 Sustainable Development (SD) CommitteeThe Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises (MoU Division) vide their Office Memorandum No.

3(11)/2011-DPE(MoU) dated 31.10.2011 read with DPE OM No. 3(9)/2010-DPE (MoU) dated 23.09.2011 issued Guidelines for Memorandum of Understanding (MoU) between CPSE and Government Department / Ministry for the year 2012-13, directed the CPSE to constitute a Board Level Designated Committee on Sustainable Development. Accordingly the Company has constituted the Board Level Designated Committee on Sustainable Development (SD) on 01.03.2012 headed by Independent Director as its Chairman. The Sustainable Development Committee is to meet to oversee/review the SD performance. The Sustainable Development Committee in place as on 31.03.2012 comprises of the following Directors.Members of the Sustainable Development Committee as on 31.03.2012 are :

1. Shri M.R. Pasrija, Director - Chairman 2. Shri J. Mathew, - Member

Director (Projects) 3. Shri M.N. Sharif, - Member

Director (Technology) The Company Secretary acts as Secretary during the meeting of the Committee.Number of Sustaianble Development Committee Meetings :During the year 2011-12 (w.e.f 01.03.2012), One (1) Meeting was held, the details of which are given below :

Sl.No Date of Meeting

Member’s Strength

No. of Members Present

1 12.03.2012 3 3

Particulars of the Directors including their attendance at the Sustaianble Development Committee Meeting

Name of Directors Period No. of SD Committee

held.

No. of SD Committee Meetings attended.

Shri M.R.Pasrija, Director & Chairman, SD Committee.

01.03.2012 to

31.03.2012

ONE ONE

Shri J.Mathew,Director (Projects) & Member, SD Committee.

01.03.2012 to

31.03.2012

ONE ONE

Shri M.N.Sharif,Director (Technology) & Member, SD Committee.

01.03.2012 to

31.03.2012

ONE ONE



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4.0 GENERAL BODY MEETINGThe details of the last four Annual General Meeting of the company are as follows :

Year Date Time Venue

2007-08 10th July, 2008

12.30 PM

Ministry of Steel, Udyog Bhawan, New Delhi

2008-09 17th Aug, 2009

12.00 Noon

Board Room, Ashok Hotel, New Delhi

2009-10 20th July, 2010

11.00AM Ministry of Steel, Udyog Bhawan, New Delhi

2010-11 7th July, 2011

11.00 AM

Ministry of Steel, Udyog Bhawan, New Delhi

5.0 DISCLOSURES5.1 Related party transactions

There are no ‘materially significant related party transactions’ that may have a potential conflict with the interests of Company at large.

5.2 Disclosure of accounting treatmentAll applicable Accounting Standards issued by the Institute of Chartered Accounts of India are

being followed in the preparation of financial statements.

5.3 Compliance CertificateCompliance Certificate on the Financial Statements of the Company was placed before the Board.

5.4 Code of ConductThe Board of Directors has laid down the Code of Business Conduct and Ethics for the Board Members and Senior Management of the Company. The copy of the Code is displayed on the Website of the Company. All Board Members and key officials of the company have affirmed their compliance with the code.

6.0 MEANS OF COMMUNICATIONAnnual Report containing Directors’ Report, Management Discussion and Analysis Report, Corporate Governance Report, Auditor’s Report, Audited Accounts and other important information are made available at the website of the company.

ÇÇÇÇÇÇÇÇÇÇ



44

AUDITOR'S REPORTTo,The Members ofMECON LIMITED

We have audited the attached Balance Sheet of MECON LIMITED as at 31st March, 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.We report as under :1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (hereinafter referred to as “the Order”) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs ‘4’ and ‘5’ of the said Order.

3. Further to our comments in the Annexure referred to in paragraph ‘3’ above, we report that : (i) we have obtained all the information and explanations, which to the best of our knowledge and

belief were necessary for the purpose of our audit; (ii) in our opinion, proper books of account as required by law have been kept by the company so far

as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(iii) 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;

(iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) in terms of Government of India, Ministry of Finance, Department of Company Affairs Notification No. GSR 829(E) dated 21st October, 2003. Government companies are exempt from the applicability of provisions of Section 274(1)(g) of the companies Act, 1956.

4. In our opinion and to the best of our information and according to the explanations given to us the said Accounts read with significant accounting policies and notes thereon given the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of Balance Sheet of the State of affairs of the company as at 31st March, 2012; ii. in the case of Statement of Profit and Loss of the Profit of the company for the year ended on that

date; and iii. in the case of Cash Flow Statement of the Cash Flows for the year ended on that date.

For B. Gupta & Co. Chartered Accountants [FRN : 000933C]

Sd/- (S. P. SINHA)Place : Ranchi PartnerDated : 25.05.2012 Membership No. 014854



45

ANNEXURE TO THE AUDITORS’ REPORTReferred to in paragraph ‘3’ of our report of even date

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets on the basis of available information except in respect of some cases wherein the fixed assets register and records are in the process of being updated.

(b) The fixed assets of the company have been physically verified by the management. As informed to us, reconciliation has been carried out and no material discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, there is no substantial disposal of fixed assets during the year and the going concern status of the company is not affected.

(ii) (a) The inventories have been physically verified by the management at the end of the year.

(b) In our opinion and according to the information and explanations given to us, the procedures 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 and no material discrepancies between physical stocks and book records arising out of physical verification were noticed.

(iii) According to information and explanations given to us:

(a) The company has not granted any loans, secured or unsecured to companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has not taken any loans, secured or unsecured from companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major failures in the internal control system.

(v) According to the information and explanations given to us, during the year under audit, there have been no contracts or arrangements which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

(vi) The company has not accepted any deposits from the public during the year as defined under section 58A and 58AA of the Companies Act, 1956.

(vii) In our opinion, the company’s internal audit system is generally commensurate with the size of the company and nature of its business.

(viii) According to the information given to us, the Central Government has not prescribed maintenance of cost records for the company under section 209(1)(d) of the companies Act, 1956.

(ix) 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, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty, Cess and other material statutory dues as applicable, 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, 2012.

(c) According to the information and explanations given to us, there are disputed statutory dues, which have not been deposited till 31st March, 2012, are given herein below :



46

Name of the Statute Period to which relates Forum Amount

(` in lakhs)

Central Sales Tax laws & Sales Tax laws of various states

1999-2000 State, Andhra Pradesh 4.41

2000-2001 State, Andhra Pradesh 101.40

2001-2002 Andhra Pradesh, High Court 450.88

1994-1995 Commercial Taxes Tribunal, Ranchi 219.10

1995-1996 Commissioner of Commercial Taxes, Ranchi 258.12


2001-2002 Commissioner of commercial Taxes, Ranchi 49.47

2002-2003 Commissioner of commercial Taxes, Ranchi 106.62

2003-2004 Asst. Commissioner, Calcutta 16.47

1993-1994, 1994-1995 & 1996-1997

JCCT, Dhanbad 0.67

2002-2003 Jharkhand High Court 39.83

2005-2006 Jharkhand High Court 78.50




1996-1997 CCT, Ranchi 1.92

1997-1998 Sales Tax Tribunal, Ahmedabad, Gujrat 52.99



2000-2001 Jt. Commissioner, Ahmedabad 3.99

2001-2002 Jt. Commissioner, Ahmedabad 7.71

Provident Fund and Misc. Provisions Act, 1952

2004-2005 EPF, Appellate Tribunal, New Delhi 288.95

(x) There are no accumulated losses of the company as at the end of the year. The company has not incurred cash losses during the financial year covered by our audit and also not incurred cash losses in the immediately preceding financial year.

(xi) 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.

(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and any other securities.

(xiii) The company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of the Order, are not applicable to the company.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order, are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institution.

(xvi) In our opinion and as per information and explanations given to us, the term loans have been applied for the purpose for which they were raised.



47

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, the company has not issued any debenture during the year.

(xx) The company has not raised any money by public issues during the year.

(xxi) As per the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For B. Gupta & Co. Chartered Accountants [FRN : 000933C]

Sd/- (S. P. SINHA)Place : Ranchi PartnerDated : 25.05.2012 Membership No. 014854



48

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE

COMPANIES ACT, 1956 ON THE ACCOUNTS OF MECON LIMITED FOR THE YEAR ENDED 31ST MARCH, 2012

The preparation of financial statements of MECON LIMITED for the year ended 31st March 2012 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory auditor appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 is responsible for expressing opinion on these financial statements under Section 227 of the Companies Act, 1956 based on independent audit in accordance with the auditing and assurance standards prescribed by their professional body the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated 25th May 2012.

I, on the behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 619 (3) (b) of the companies Act, 1956 of the financial statements of MECON LIMITED for the year ended 31 March 2012. 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 under section 619 (4) of the Companies Act, 1956.

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

Sd/- (Manoj Sahay)Place : Ranchi Principal Director of Commercial AuditDated : 20.06.2012 & Ex-officio Member, Audit Board Ranchi



49

BALANCE SHEET AS AT 31st MARCH, 2012 (` in lakhs)

PARTICULARS NOTE NO. AS ON 31.03.2012 AS ON 31.03.2011

I. EQUITY AND LIABILITIES

(1) Shareholders’ Funds(a) Share Capital 1 9,053.84 10,313.84 (b) Reserves & Surplus 2 24,760.69 12,424.86 (c) Money received against share warrants – 33,814.53 – 22,738.70

(2) Share Application money pending allotment – –(3) Non-Current Liabilities

(a) Long-Term Borrowings 3 2,500.00 5,000.00 (b) Deferred Tax Liabilities (Net) 4 – 647.22 (c) Other Long-Term Liabilities 5 7,617.89 15,842.85 (d) Long-Term Provisions 6 22,548.65 32,666.54 19,926.39 41,416.46

(4) Current Liabilities(a) Short-Term Borrowings 7 1.44 3.83 (b) Trade Payables 8 16,918.37 12,515.14 (c) Other Current Liabilities 9 18,377.21 17,539.67 (d) Short-Term Provisions 10 14,907.61 50,204.63 10,310.19 40,368.83

TOTAL 116,685.70 104,523.99 II. ASSETS(1) Non-Current Assets

(a) Fixed Assets(i) Tangible Assets 11 7,089.65 7,201.47 (ii) Intangible Assets 12 63.45 115.52 (iii) Capital Work-in-Progress 13 276.03 221.49 (iv) Intangible Assets under development – –

7,429.13 7,538.48 (b) Non-Current Investments 14 511.92 511.92 (c) Deferred Tax Asset (Net) 4 83.02 –(d) Long-Term Loans and Advances 15 1,605.99 1,273.19 (e) Other Non-Current Assets 16 3,112.27 12,742.33 3,728.99 13,052.58

(2) Current Assets(a) Current Investments – –(b) Inventories 17 185.74 150.19 (c) Jobs-in-Progress 18 478.91 408.16 (d) Trade Receivables 19 13,063.14 17,768.96 (e) Cash and Cash Equivalents 20 72,360.21 60,216.70 (f) Short-Term Loans and Advances 21 5,381.16 4,403.38 (g) Other Current Assets 22 12,474.21 103,943.37 8,524.02 91,471.41

TOTAL 116,685.70 104,523.99

Note No.1 to 36 form an integral part of Financial StatementsIn terms of our report of even dateFor B. GUPTA & CO.CHARTERED ACCOUNTANTSFirm Regn. No.000933C

Sd/- Sd/- Sd/- Sd/- Sd/- (S.P. SINHA) (RAVI BAMBHA) (R. P. KHANDELWAL) (S. CHATTOPADHYAY) (K. K. MEHROTRA) PARTNER COMPANY SECRETARY ASSISTANT GENERAL MANAGER I/C (FINANCE) DIRECTOR (PROJECTS) CHAIRMAN-cum-MANAGING DIRECTOR Memb.No.014854Place : Ranchi Dated : 25.05.2012



50

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2012

(` in lakhs)

PARTICULARS NOTE NO. Current Year Previous Year

I. Revenue from Operations 23 72,321.15 64,436.47

II. Other Income 24 6,723.36 5,041.05

III. TOTAL REVENUE (I+II) 79,044.51 69,477.52

IV. EXPENSES:

(a) Purchases of Equipments & Direct Expenses 25 24,865.51 19,730.36

(b) (Accretion)/Decretion to Jobs-in-Progress 26 (70.75) 510.92

(c) Employee Benefit Expenses 27 26,047.15 29,644.82

(d) Finance Costs 28 463.80 470.80

(e) Depreciation and Amortisation Expenses 29 405.65 408.16

(f) Other Expenses 30 7,142.15 4,603.67

TOTAL EXPENSES 58,853.51 55,368.73

V. Profit/(Loss) before prior period, exceptionaland extraordinary items and tax (III-IV)

20,191.00 14,108.79

VI. Add/(Less) Prior Period Items 31 (37.47) (15.99)

VII. Profit/(Loss) before exceptional and extraordinary items and tax (V-VI)

20,153.53 14,092.80

VIII. Exceptional/Extraordinary Items - -

IX. Profit/(Loss) before Tax (VII-VIII) 20,153.53 14,092.80

X. Tax Expense:

(a) Current Tax 7,257.95 4,484.20

(b) Deferred Tax (730.24) 299.12

(c) Taxes relating to Earlier Years (10.53) (59.01)

XI. Profit/(Loss) for the period from continuing operations (IX-X) 13,636.35 9,368.49

XII. Profit/(Loss) for the period from discontinuing operations - -

XIII. Profit/(Loss) for the period (XI+XII) 13,636.35 9,368.49

XIV. Earnings per equity share (Face Value ` 10/- each)

Profit Attributable to Equity Shareholders 13,293.46 9,002.39

Average Number of Equity Shares 40,138,360 40,138,360

Earnings per Share (Basic & Diluted) (`) 33.12 22.43

Note No.1 to 36 form an integral part of Financial Statements In terms of our report of even date For B. GUPTA & CO. CHARTERED ACCOUNTANTS Firm Regn. No.000933C Sd/- Sd/- Sd/- Sd/- Sd/- (S.P. SINHA) (RAVI BAMBHA) (R. P. KHANDELWAL) (S. CHATTOPADHYAY) (K. K. MEHROTRA) PARTNER COMPANY SECRETARY ASSISTANT GENERAL MANAGER I/C (FINANCE) DIRECTOR (PROJECTS) CHAIRMAN-cum-MANAGING DIRECTOR Memb.No.014854

Place : RanchiDated : 25.05.2012



51

CASH FLOW STATEMENT (INDIRECT METHOD) (` in lakhs)

2011-2012 2010-2011Cash Flows from Operating ActivitiesNet Profit/(Loss) Before Taxation 20,153.53 14,092.80 Add : Adjustments for

Depreciation & Amortisation 481.53 440.23 Loss on Sale/Disposal of Fixed Assets 15.92 4.64 Bad Debts written off 7.12 9.71 Provision for Bad Debts 2,756.75 86.65 Finance Costs 463.80 470.80

3,725.12 1,012.03 Less : Adjustments for

Revaluation Reserve written back 24.63 24.64 Profit on Sale/Disposal of Fixed Assets 0.14 2.06 Dividend Received 2.66 2.50

27.43 29.20 Operating Profit/(Loss) Before Working Capital Changes 23,851.22 15,075.63 Add : Adjustments for

Inventories - - Jobs-in-Progress - 510.92 Trade Receivables 2,584.34 - Other Current Assets - 90.57 Loans and Advances - - Liabilities and Provisions 4,413.33 9,453.12

6,997.67 10,054.61 Less : Adjustments for

Inventories 35.55 31.46 Jobs-in-Progress 70.75 - Trade Receivables - 5,249.68 Other Current Assets 4,013.52 - Loans and Advances 8,026.11 2,452.66 Liabilities and Provisions - -

12,145.93 7,733.80 Cash Generated from Operations 18,702.96 17,396.44

Less : Taxes Paid 531.89 1,032.85 Net Cash from Operating Activities {A} 18,171.07 16,363.59

Cash Flows from Investing ActivitiesPurchase of Fixed Assets (391.73) (461.76)Fixed Assets sold/discarded 3.77 3.64 Purchase of Non-Current Investments - (1.92)Dividend Received 2.66 2.50 Net Cash from Investing Activities {B} (385.30) (457.54)



52

2011-2012 2010-2011

Cash Flows from Financing ActivitiesRedemption of 5% Non-Cumulative Preference Shares

(1,260.00) -

Repayment of Long-Term Borrowings (3,500.00) (3,500.00)

Proceeds/(Repayment) of Short-Term Borrowings

(2.39) (10.83)

Dividend including Dividend Tax Paid (366.10) (367.32)

Finance Costs (513.77) (506.19)

Net Cash from Financing Activities {C} (5,642.26) (4,384.34)

Net Increase/(Decrease) in Cash & Cash Equivalent {A}+{B}+{C} 12,143.51 11,521.71

Cash and Cash Equivalent at the beginning 60,216.70 48,694.99

Cash and Cash Equivalent at the end 72,360.21 60,216.70

Note No.1 to 36 form an integral part of Financial Statements

Components of Cash & Cash Equivalentsa) Cash & Stamps on hand 11.85 13.62

b) Cash at Bank (Current A/c) 225.48 472.35

c) Cash at Bank (Deposit A/c) 72,122.88 72,360.21 59,730.73 60,216.70

Other Disclosures1. Cash & Cash Equivalents include balances

which are earmarked/available for specified purposes as under :

a) Tax on House Perquisites 330.09 305.93

b) Voluntary Retirement Scheme Expenditure 225.56 338.33

c) Corporate Social Responsibility Expenditure 339.75 895.40 200.92 845.18

2. Cash & Cash Equivalents include deposits with banks which are readily realisable / available for general purpose

64,546.48 52,535.55

3. Cash & Cash Equivalents include deposits with banks which are held as margin money & security under lien against borrowings

6,681.00 6,350.00

In terms of our report of even date For B. GUPTA & CO. CHARTERED ACCOUNTANTS Firm Regn. No.000933C

Sd/- Sd/- Sd/- Sd/- Sd/- (S.P. SINHA) (RAVI BAMBHA) (R. P. KHANDELWAL) (S. CHATTOPADHYAY) (K. K. MEHROTRA) PARTNER COMPANY SECRETARY ASSISTANT GENERAL MANAGER I/C (FINANCE) DIRECTOR (PROJECTS) CHAIRMAN-cum-MANAGING DIRECTOR Memb.No.014854

Place : Ranchi Dated : 25.05.2012

CASH FLOW STATEMENT (INDIRECT METHOD) (Contd.) (` in lakhs)



53

NOTE 1 : SHARE CAPITAL (` in lakhs)

AS ON 31.03.2012 AS ON 31.03.2011AUTHORISED

Equity Shares4,10,00,000 (Previous year 4,10,00,000) Equity Shares of ` 10/- each 4,100.00 4,100.00 Preference Shares6,30,00,000 (Previous year 6,30,00,000) 5% Non Cumulative Redeemable Preference Shares of ` 10/- each

6,300.00 6,300.00

10,400.00 10,400.00 ISSUED, SUBSCRIBED AND FULLY PAID UPEquity Shares4,01,38,360 ( Previous year 4,01,38,360 ) Equity Shares of ` 10/- each with voting rights.

4,013.84 4,013.84

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 Shares5,04,00,000 (Previous year 6,30,00,000) 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.

5,040.00 6,300.00

5,04,00,000 (Previous year 6,30,00,000) 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 : 9,053.84 10,313.84

RECONCILIATION OF SHARES

AS ON 31.03.2012 AS ON 31.03.2011Number Amount

(` in lakhs)Number Amount

(` in lakhs)Equity Shares Shares Outstanding at the beginning 40,138,360 4,013.84 40,138,360 4,013.84 Shares Issued during the period - - - - Shares Bought Back during the period - - - - Shares Outstanding at the end 40,138,360 4,013.84 40,138,360 4,013.84 5% Non-Cumulative Redeemable Preference Shares Shares Outstanding at the beginning 63,000,000 6,300.00 63,000,000 6,300.00 Shares Issued during the period - - - - Shares Redeemed during the period 12,600,000 1,260.00 - - Shares Outstanding at the end 50,400,000 5,040.00 63,000,000 6,300.00



54

NOTE 2 : RESERVES & SURPLUS (` in lakhs)

AS ON 31.03.2012 AS ON 31.03.2011

Capital Redemption ReserveAs per last Balance Sheet - -

Add : Transferred from Surplus 1,260.00 1,260.00 - -

Bond Redemption ReserveAs per last Balance Sheet 7,500.00 1,081.04

Add : Transferred from Surplus - 6,822.92 Less : Transferred to General Reserve 2,500.00 - Less : Transferred to Surplus - 5,000.00 403.96 7,500.00

Revaluation Reserve #As per last Balance Sheet 2,341.43 2,366.07

Less : Transferred to Statement of Profit and Loss due to Depreciation on appreciation of Land & Buildings

24.63 2,316.80 24.64 2,341.43

General ReserveAs per last Balance Sheet - -

Add : Transferred from Bond Redemption Reserve 2,500.00 - Add : Transferred from Surplus 1,022.73 3,522.73 - -

SurplusAs per last Balance Sheet 2,583.43 -

Add : Net Profit / (Loss) from Statement of Profit and Loss 13,636.35 9,368.49 Amount available for appropriation 16,219.78 9,368.49

Less : Transferred to Capital Redemption Reserve 1,260.00 - Add : Transferred from Bond Redemption Reserve - 403.96 Less : Transferred to Bond Redemption Reserve - 6,822.92 Less : Proposed Dividend on Preference Shares including

Dividend Distribution Tax 342.89 366.10

Less : Proposed Dividend on Equity Shares including Dividend Distribution Tax

933.00 -

Less : Transferred to General Reserve 1,022.73 12,661.16 - 2,583.43 TOTAL 24,760.69 12,424.86

# 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 `1,537.80 lakhs upto 31st March, 2011 on account of disposal/depreciation of Revalued Assets. `24.63 lakhs is adjusted due to depreciation on appreciation of Land & Buildings during the period ending 31st March, 2012.



55

NOTE 3 - LONG-TERM BORROWINGS (` in lakhs)

AS ON 31.03.2012 AS ON 31.03.2011

a) Non Convertible Bonds against Government Guarantee for Voluntrary Retirement Scheme

Series Interest Rate p.a.

Face value of each Bond (`)

Particulars of redemption

III 6.80% 1,000,000 5 equal annual instalments commencing from 27.11.2009

6,500.00 6,500.00

Less : Redeemed (3/5 th) [Previous Year (2/5 th)]

3,900.00 2,600.00

2,600.00 3,900.00

Less : Current Maturity (1/5 th) 1,300.00 1,300.00 1,300.00 2,600.00

I 6.90% 1,000,000 5 equal annual instalments commencing from 24.08.2009

6,000.00 6,000.00

Less : Redeemed (3/5 th) [Previous Year (2/5 th)]

3,600.00 2,400.00

2,400.00 3,600.00

Less : Current Maturity (1/5 th) 1,200.00 1,200.00 2,500.00 1,200.00 2,400.00 5,000.00

(a) Secured # 5.10 5.10

(b) Unsecured 4,994.90 7,494.90

5,000.00 7,500.00

# Secured by charge ranking pari-passu interse on immovable property at Mouje Irana of Kadi Taluka, Mehsana, Gujarat.(Cost of acquisition as on 31.03.2004 ` 5.10 lakhs)

b) Term Loan from Bank against Government Guarantee for Voluntary Retirement Scheme (Unsecured)

5,000.00 5,000.00

Rate of Interest @ 7% p.a. and repayable in five equal annualinstalments commencing from 2007-08

Less : Repaid [Previous Year (4/5th)]

5,000.00 4,000.00

- 1,000.00

Less : Current Maturity (1/5 th) - - 1,000.00 -

TOTAL 2,500.00 5,000.00



56

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) P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011

(a) Deferred Tax Liability(i) Difference between book and tax depreciation 863.39 891.91 (ii) Provision for gratuity 144.27 - (iii) Others 56.11 1,063.77 56.43 948.34

(b) Deferred Tax Assets(i) Provision for bad & doubtful debts 959.14 77.72 (ii) Provision for gratuity - 66.85 (iii) Others 187.65 1,146.79 156.55 301.12

NET DEFERRED TAX LIABILITY / (ASSET) (a) - (b) (83.02) 647.22

NOTE 5 - OTHER LONG-TERM LIABILITIES(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011(a) Trade Payables

i) Dues to Micro, Small & Medium Enterprises (MSME) - - ii) Others 2,593.68 2,593.68 7,282.96 7,282.96

(b) Other Payables(i) Advances from Clients 1,313.97 5,299.62 (ii) Sundry Creditors 170.27 144.04 (iii) Liquidated Damages Recovered from Parties 564.18 587.97 (iv) Securities and Other Deposits 193.60 171.81 (v) Employees Family Benefit Scheme 127.59 152.61 (vi) Liability for Employees 2,654.60 2,203.84

TOTAL 7,617.89 15,842.85

NOTE 6 - LONG-TERM PROVISIONS(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011(a) Provision for Employee Benefits

(i) Provision for Gratuity (Present Value of Defined Benefit Obligation as per actuarial valuation)

- 261.80

(ii) Provision for Leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation)

8,706.13 8,882.31

(iii) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation)

4,654.29 4,905.46

(iv) Provision for Employee Defined Contribution Schemes

7,563.11 5,806.39

(b) Other Provisions(i) Provision for Taxation (Net) 1,625.12 70.43

TOTAL 22,548.65 19,926.39



57

NOTE 7 - SHORT-TERM BORROWINGS(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011

Working Capital Borrowings from Bank (Secured against Fixed Deposits with Banks under lien)

1.44 3.83

TOTAL 1.44 3.83

NOTE 8 - TRADE PAYABLES(` in lakhs)


Trade Payables

(i) Dues to Micro, Small & Medium Enterprises (MSME) - - (ii) Others 16,918.37 16,918.37 12,515.14 12,515.14

TOTAL 16,918.37 12,515.14

NOTE 9 - OTHER CURRENT LIABILITIES(` in lakhs)


(a) Current Maturity of Long-Term Borrowings

(i) Term Loan from Bank against Govt. Guarantee for Voluntary Retirement Scheme

- 1,000.00

(ii) Non-Convertible Bonds against Govt. Guarantee for Voluntary Retirement Scheme (Series III)

1,300.00 1,300.00

(iii) Non-Convertible Bonds against Govt. Guarantee for Voluntary Retirement Scheme (Series I) 1,200.00 2,500.00 1,200.00 3,500.00

(b) Interest accrued but not due on borrowings 160.83 240.54 (c) Interest accrued and due on borrowings - 7.92 (d) Other Payables

(i) Advances from Clients 9,367.90 9,628.40 (ii) Sundry Creditors 1,245.23 1,005.43 (iii) Liquidated Damages Recovered from Parties 20.78 - (iv) Securities and other deposits 134.37 127.45 (v) Employees Family Benefit Scheme 38.36 72.63 (vi) Liability for Employees 3,881.34 2,694.19 (vii) VAT / Sales Tax Payable 41.44 36.81 (viii) Service Tax Payable but not due 614.88 - (ix) Others 372.08 226.30

TOTAL 18,377.21 17,539.67



58

NOTE 10 - SHORT-TERM PROVISIONS(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011(a) Provision for Employee Benefits

(i) Provision for Bonus 1.76 2.03 (ii) Provision for Gratuity (Present Value of Defined Benefit Obligation as per actuarial valuation)

7.60 5.25

(iii) Provision for Leave Encashment (Present Value of Defined Benefit Obligation as per actuarial valuation)

1,892.86 1,823.82

(iv) Provision for Other Employee Defined Benefit Schemes (Present Value of Defined Benefit Obligation as per actuarial valuation)

121.61 193.67

(b) Other Provisions(i) Proposed Dividend on Preference Shares 295.03 315.00 (ii) Provision for Dividend Distribution Tax 47.86 342.89 51.10 366.10 (iii) Proposed Dividend on Equity Shares 802.77 - (iv) Provision for Dividend Distribution Tax 130.23 933.00 - - (v) Provision for Expenses & Contractual Obligations 11,604.71 7,916.33 (vi) Others 3.18 2.99

TOTAL 14,907.61 10,310.19

NOTE 11.1 - TANGIBLE FIXED ASSETS (GENERAL) (` in lakhs)

TYPES OF ASSET

C O S T DEPRECIATION NET CARRYING AMOUNT

As on 01.04.11

Addition/ Adjust-

ment during

the period

Sale/ Adjust-

ment during

the period

As on 31.03.12

As on 01.04.11

On Sale/ Adjust-

ment

During the

period

Upto 31.03.12

31.03.12 31.03.11

1. Land 266.79 - - 266.79 - - - - 266.79 266.79

2. Building - Freehold 3,005.48 - - 3,005.48 566.78 - 26.98 593.76 2,411.72 2,438.70

- Leasehold 102.75 - - 102.75 28.59 - 29.96 58.55 44.20 74.16

3. Furniture & Fixtures 748.54 2.61 3.22 747.93 392.44 3.12 30.15 419.47 328.46 356.10

4. Vehicles 36.23 - - 36.23 15.67 - 3.20 18.87 17.36 20.56

5. Office Equipments 415.57 38.13 21.53 432.17 195.55 10.33 17.46 202.68 229.49 220.02

6. Road, Bridges & Culverts

0.55 - - 0.55 0.26 - 0.20 0.46 0.09 0.29

7. Water Supply and Sewerage

3.79 3.76 - 7.55 1.21 - 0.09 1.30 6.25 2.58

8. Electrical Installation 605.56 25.09 21.42 609.23 322.76 17.23 29.35 334.88 274.35 282.80

9. Computer Hardware 1,652.58 123.12 54.70 1,721.00 1,255.27 51.99 122.64 1,325.92 395.08 397.31

10. Misc. Articles including Library

858.73 52.59 7.63 903.69 659.19 6.13 25.54 678.60 225.09 199.54

TOTAL 7,696.57 245.30 108.50 7,833.37 3,437.72 88.80 285.57 3,634.49 4,198.88 4,258.85

Figures for Previous Year 7,555.67 192.78 51.88 7,696.57 3,189.35 46.03 294.40 3,437.72 4,258.85 4,366.32



59

NOTE 11.2 - TANGIBLE FIXED ASSETS (SOCIAL AMENITIES)(` in lakhs)

TYPES OF ASSET


As on 01.04.11

Addition/ Adjust-

ment during the

period

Sale/ Ad-justment

during the period

As on 31.03.12

As on 01.04.11

On Sale/

Adjust-ment

Dur-ing the period

Upto 31.03.12

31.03.12 31.03.11

1. Land 1,247.06 - - 1,247.06 - - - - 1,247.06 1,247.06 2. Building 1,971.10 8.60 - 1,979.70 663.76 - 59.13 722.89 1,256.81 1,307.34 3. Plant & Equipments 4.44 0.94 - 5.38 2.16 - 0.57 2.73 2.65 2.28 4. Furniture & Fixtures 37.59 20.33 0.01 57.91 27.62 0.01 3.79 31.40 26.51 9.97 5. Vehicles 0.61 0.40 - 1.01 0.44 - 0.13 0.57 0.44 0.17 6. Office Equipments 6.81 0.74 0.04 7.51 3.54 0.05 (0.56) 2.93 4.58 3.27 7. Road, Bridges &

Culverts 38.12 - - 38.12 16.28 - 5.25 21.53 16.59 21.84

8. Water Supply and Sewerage

152.52 - - 152.52 66.23 - 0.77 67.00 85.52 86.29

9. Fences 82.21 - - 82.21 19.28 - 1.70 20.98 61.23 62.93 10. Electrical Installation 185.57 16.86 0.12 202.31 119.42 0.27 24.91 144.06 58.25 66.15 11. Computer Hardware 1.76 0.57 - 2.33 1.23 - 0.22 1.45 0.88 0.53 12. Misc. Articles includ-

ing Library 272.86 20.34 - 293.20 150.44 (0.01) 24.87 175.32 117.88 122.42

TOTAL 4,000.65 68.78 0.17 4,069.26 1,070.40 0.32 120.78 1,190.86 2,878.40 2,930.25 Figures for Previous Year 3,743.29 257.73 0.37 4,000.65 1,014.01 - 56.39 1,070.40 2,930.25 2,729.28

As per Accounting Policy (NOTE 32 Sl.No. 4.2) assets purchased during the year costing upto `1,000/- each are charged to revenue and included in NOTE 30 - “OTHER EXPENSES”

Current Year Previous Year Note : Allocation of Depreciation

Depreciation 317.44 309.24 Depreciation on appreciation due to revaluation 24.63 24.64

i) Total Depreciation for the period 342.07 333.88 ii) Depreciation relating to earlier years 64.28 16.91

406.35 350.79

NOTE 11.3 - TANGIBLE FIXED ASSETS (RETIRED FROM ACTIVE USE)(` in lakhs)

TYPES OF ASSET


As on 01.04.11

Addition/ Adjustment during the

period

Sale/ Adjustment during the

period

As on 31.03.12

As on 01.04.11

On Sale/ Adjustment

During the

period

Upto 31.03.12

31.03.12 31.03.11

1. Office Premises at World Trade Centre (WTC), Mumbai (lower of, net book value and net realisable value)

12.37 - - 12.37 - - - - 12.37 12.37

TOTAL 12.37 - - 12.37 - - - - 12.37 12.37

GRAND TOTAL (11.1, 11.2 & 11.3)

11,709.59 314.08 108.67 11,915.00 4,508.12 89.12 406.35 4,825.35 7,089.65 7,201.47

Figures for Previous Year 11,311.33 450.51 52.25 11,709.59 4,203.36 46.03 350.79 4,508.12 7,201.47 7,107.97



60

NOTE 11.4 - LAND AND BUILDINGSA) LAND

(i) Under Section 7 of Public Sector Iron & Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978, all the lands measuring 118.95 acres for residential colony and 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. Government of Jharkhand has been approached for deed of conveyance in favour of MECON Limited and the matter is in progress. Out of the said land, 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) Deed of conveyance has not been executed for 103.33 acres of land for township at Ranchi acquired from Govt of Bihar by the Company in 1978-79. Govt. of Jharkhand has been approached for deed of conveyance in favour of MECON Limited as the properties are now situated in the state of Jharkhand and the matter is in progress. Pending execution of deed of conveyance in respect of above, 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 could not be executed. The amount received / receivable for such transfer has been taken in the accounts.

(iii) 1.50 acres of land for township at Ranchi was acquired from Government of Bihar for which no deed of conveyance has been executed in favour of the Company. Government of Jharkhand has been approached for deed of conveyance in favour of MECON Limited as the properties are now situated in the state of Jharkhand and the matter is in progress.

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.

NOTE 12.1 - INTANGIBLE ASSETS (` in lakhs)

TYPES OF ASSET

C O S T AMORTISATION NET CARRYING AMOUNT

As on 01.04.11

Addition/ Adjust-

ment during the

period

Sale/ Ad-justment

during the period

As on 31.03.12

As on 01.04.11

On Sale/ Adjust-

ment

Dur-ing the period

Upto 31.03.12 31.03.12 31.03.11

1. Computer Software (General)

418.18 23.11 - 441.29 302.66 - 75.18 377.84 63.45 115.52

TOTAL 418.18 23.11 - 441.29 302.66 - 75.18 377.84 63.45 115.52

Figures for Previous Year

380.06 38.12 - 418.18 213.22 - 89.44 302.66 115.52 166.84

Current Year

Previous Year

Note : Allocation of Amortisation

i) Amortisation for the Period 63.58 74.28 ii) Amortisation relating to earlier years 11.60 15.16

75.18 89.44



61

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)

Particulars As on

31.03.12 31.03.11

i) Gross carrying amount (Opening) 418.18 380.06

ii) Gross carrying amount (Closing) 441.29 418.18

iii) Accumulated amortization (Opening) 302.66 213.22

iv) Amortization recognized during the period 75.18 89.44

v) Accumulated amortization (Closing) 377.84 302.66

NOTE 13 - CAPITAL WORK-IN-PROGRESS(` in lakhs)

Particulars Opening Balance

as on 01.04.2011

Additions/ Adjust-ments

during the Period

Total Capital-ised/ Ad-justments during the

period

Balance as on

31.03.2012 31.03.2011

1. Water Reserviour, Borewells, Separation of Domestic and Non-Domestic Loads, etc at Residential Township and Head Office at Ranchi

221.49 63.14 284.63 8.60 276.03 221.49

TOTAL 221.49 63.14 284.63 8.60 276.03 221.49 Construction/extension of consumer co-operative stores building at residential township, Ranchi has been capitalised and transferred under “Buildings” in NOTE 11.2 - “TANGIBLE FIXED ASSETS (SOCIAL AMENITIES)”



62

NOTE 14 - NON-CURRENT INVESTMENTS(` in Lakhs)


(a) Trade Investment - at Cost (Unquoted)Investment in Equity Instruments

i) Joint Venture

5000 Equity Shares of Naira 10 each fully paid up being 50% of paid up share capital of M/s Metallurgical & Engineering Consultants (Nigeria) Limited, a Company set up in Nigeria jointly by this Company with two Nigerian Government Companies and Nigerian Citizens

7.60 7.60

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 “Neelachal Ispat Nigam Limited”.

500.00 500.00

(b) Other Investment - at Cost (Unquoted)Investment in Equity Instruments

i) Others

106,383 Equity Shares of ` 10/- each fully paid-up of “Global Procurement Consultants Limited”.

11.92 11.92

(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



63

NOTE 15 - LONG-TERM LOANS AND ADVANCES(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011 (a) Capital Advances $ 1.11 6.30 (b) Security Deposits

(i) Government Authorities $ 5.42 5.43 (ii) Others Unsecured, considered good 226.70 40.08 Considered doubtful 184.34 194.41

411.04 234.49 Less : Provision for doubtful deposits 184.34 226.70 194.41 40.08

(c) Loans and advances to related parties - - (d) Other Loans and Advances

(i) Advance to Suppliers and Sub-Contractors Secured, considered good # 766.64 1,042.98 Considered doubtful 181.94 181.94

948.58 1,224.92 Less : Provision for doubtful advances 181.94 766.64 181.94 1,042.98 (ii) Advance to Employees Secured, considered good ## 0.15 0.26 Unsecured, considered good 0.80 0.95 - 0.26 (iii) Advance to Others $ 106.44 96.32 (iv) Prepaid Expenses $ 0.16 0.24 (v) Claims Recoverable Unsecured, considered good 44.69 81.58 Considered doubtful 7.10 7.48

51.79 89.06 Less : Provision for doubtful claims recoverable 7.10 44.69 7.48 81.58 (vi) Advances to Board of Trustees, MECON Employees Gratuity Fund $

452.27 -

(vii) Liquidated Damages Recovered by Clients Unsecured, considered good 1.61 - Considered doubtful 64.20 96.91

65.81 96.91 Less : Provision for doubtful liquidated damages recovered

64.20 1.61 96.91 -

TOTAL 1,605.99 1,273.19 $ Unsecured, considered good# Secured against bank guarantee / materials supplied / work done, as the case may be## Secured against buildings and vehicles

NOTE 16 - OTHER NON-CURRENT ASSETS(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011 (a) Long-Term Trade Receivables

Unsecured, considered good 3,056.53 3,698.92 Considered doubtful 3,282.53 565.86

6,339.06 4,264.78 Less : Provision for bad and doubtful trade receivables 3,282.53 3,056.53 565.86 3,698.92

(b) Others Interest accrued but not due 55.74 30.07

TOTAL 3,112.27 3,728.99



64

NOTE 17 - INVENTORIES (` in lakhs)


(a) Stores and Spares 126.72 92.54 (b) Printing and Stationery 48.53 44.54

(c) Computer Consumables 10.49 185.74 13.11 150.19 Valued at lower of cost (on First in First Out basis) and net realisable value

TOTAL 185.74 150.19

NOTE 18 - JOBS-IN-PROGRESS (` in lakhs)


Jobs-in-Progress for Consultancy Services 478.91 408.16 Valued as per Accounting Policy (NOTE 32, Sl.No.11)

TOTAL 478.91 408.16

NOTE 19 - TRADE RECEIVABLES(` in lakhs)


Trade Receivables outstanding for a period exceeding six months from the date they are due for payment

1,997.47 5,340.64

Others 11,065.67 13,063.14 12,428.32 17,768.96 a) Unsecured, considered good 13,063.14 17,768.96 b) Considered doubtful - -

13,063.14 17,768.96 Less : Provision for bad and doubtful trade receivables

- 13,063.14 - 17,768.96

TOTAL 13,063.14 17,768.96

NOTE 20 - CASH AND CASH EQUIVALENTS(` in lakhs)


(a) Balances with Banks 72,348.36 60,203.08 (in Current and Deposit Accounts)

(b) Cheques & Drafts on hand - - (c) Cash & stamps on hand 11.85 13.62

OÇ Balances with Banks include amounts earmarked for : i) Tax on House Perquisite 330.09 305.93 ii) Voluntary Retirement Scheme Expendtiture 225.56 338.33 iii) Corporate Social Responsibility Expenditure 339.75 200.92 O Balances with Banks include amounts held as margin

money & security under lien against borrowings 6,681.00 6,350.00

O Bank Deposits with more than 12 months maturity - - TOTAL 72,360.21 60,216.70



65

NOTE 21 - SHORT TERM LOANS AND ADVANCES(` in lakhs)

P a r t i c u l a r s AS ON 31.03.2012 AS ON 31.03.2011 (a) Loans and Advances to related parties - secured, considered

good ## - 0.13

(b) Other Loans and Advances(i) Advances to Contractors $ 42.67 22.00 (ii) Advance to Suppliers and Sub-Contractors Secured, considered good # 1,011.52 945.22 Unsecured, considered good 17.87 1,029.39 - 945.22 (iii) Advance to Employees Secured, considered good ## 0.73 0.33 Unsecured, considered good 213.22 213.95 483.29 483.62 (iv) Advance to Others & Canteen $ 22.66 59.18 (v) Prepaid Expenses $ 17.57 13.76 (vi) Deposit with Others $ 91.35 227.35(vii) Claims Recoverable $ 113.36 71.69(viii) Liquidated Damages Recovered by Clients Unsecured, considered good - 84.93 Considered Doubtful 140.81 -

140.81 84.93Less : Provision for doubtful liquidated damages recovered 140.81 - - 84.93

(ix) Payment against Income Taxes (Net) $ 913.74 1,304.11 (x) Payment against Sales Tax $ 807.77 758.18 (xi) VAT Credit Receivable (INPUT) $ 33.48 52.07 (xii) OUTPUT VAT Receivable $ 30.68 18.69 (xiii) VAT Receivable $ 202.37 - (xiv) Service Tax Receivable $ 1,862.17 362.45

TOTAL 5,381.16 4,403.38 $ Unsecured, considered good# Secured against bank guarantee / materials supplied / work done, as the case may be## Secured against buildings and vehicles

NOTE 22 - OTHER CURRENT ASSETS(` in lakhs)

AS ON 31.03.2012 AS ON 31.03.2011

Interest accrued but not due 2,172.27 2,579.68

Other Receivables 827.06 628.10

Amount accrued but not invoiced (Net) 9,474.88 5,316.24

TOTAL 12,474.21 8,524.02



66

NOTE 23.1 - REVENUE FROM OPERATIONS(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Revenue from Consultancy Services 45,792.03 42,323.38

(b) Revenue from Construction Contracts 18,591.40 21,814.58 (c) Other Operating Revenue

(i) Provision no longer required written back (Direct) 7,937.72 269.77 (ii) Others - 28.74

TOTAL 72,321.15 64,436.47

NOTE 23.2 - GROSS INCOME DERIVED FROM SERVICES RENDERED [Refer NOTE 23.1(a) and NOTE 23.1(b)]

(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Engineering, Technical Consultancy, Project Management Services, etc. - Domestic

45,309.92 41,704.87

(b) Engineering, Technical Consultancy, Project Management Services, etc. - Foreign

482.11 618.51

(c) Execution of Construction Contracts/EPC Contracts including Supply of Equipment & Components, etc.

18,591.40 21,814.58

TOTAL 64,383.43 64,137.96

NOTE 24 - OTHER INCOME(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Interest Income(i) Interest from Bank (Tax deducted at Source ` 546.72 lakhs) (Previous Year ` 351.11 lakhs)

5,413.13 3,617.80

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

4.59 0.67

(iii) Interest from Income Tax Department and Others - 191.75 (b) Dividend Income from Non-Current Investment 2.66 2.50 (c) Other Non-Operating Income

(i) Profit on Sale / Disposal of Fixed Assets 0.14 2.06 (ii) Income from Township 904.14 699.73 (iii) Provision no longer required written back 201.29 366.98 (iv) Revaluation Reserve written back 24.63 24.64 (iv) Miscellaneous Income 172.78 134.92

TOTAL 6,723.36 5,041.05



67

NOTE 25 - PURCHASE OF EQUIPMENTS & DIRECT EXPENSES(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Purchase of Equipments & Components for execution of jobs 8,200.61 6,018.58 (b) Expenses on Sub-Contractors & Others for execution of jobs 5,060.19 5,795.45

(c) Provision for Expenses & Contractual Obligations for execution of jobs

11,604.71 7,916.33

TOTAL 24,865.51 19,730.36

NOTE 26 - (ACCRETION) / DECRETION TO JOBS-IN-PROGRESS(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Opening Jobs-in-Progress (Consultancy) 408.16 919.08 (b) Closing Jobs-in-Progress (Consultancy) 478.91 408.16

TOTAL (70.75) 510.92

NOTE 27 - EMPLOYEE BENEFIT EXPENSES(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Salaries & Wages

- Salary and Allowances 16,263.81 14,783.97 - Leave Encashment 1,573.02 1,444.93 - Perks and Allowances 3,786.17 3,949.39 - Bonus 2.43 5.19 - Leave Travel Concession - - - Superannuation Benefits 1,807.14 5,898.42

Sub-Total 23,432.57 26,081.90

(b) Company’s Contribution to Provident and Other Fund 1,561.73 2,392.53

(c) Staff Welfare Expenses

- Education 2.91 10.43 - Medical 622.60 553.56 - Social & Cultural Activities 74.21 53.96 - Rent (Residential) 4.21 10.02 - Premium for Group Term Insurance 16.58 12.16 - Staff Welfare (Others) 332.34 530.26

Sub-Total 1,052.85 1,170.39

TOTAL (a)+(b)+(c) 26,047.15 29,644.82



68

NOTE 28 - FINANCE COSTS(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

(a) Interest Expenses

i) Interest on Loan from Banks 25.12 16.57 ii) Interest on Bank Loan for Voluntary Retirement Scheme 52.74 122.74

Less : Subsidy from Government of India 26.37 26.37 61.37 61.37 iii) Interest on Bond Loan for Voluntary Retirement Scheme 433.89 604.62

Less : Subsidy from Government of India 206.73 227.16 288.29 316.33 iv) Interest on Advance Income Tax 149.12 15.59

TOTAL (A) 427.77 409.86

(b) Other Borrowing Costs

i) Bank Charges 12.80 17.50 ii) Bank Guarantee Commission 23.23 43.44

iii) Guarantee Fee to Government of India for Voluntary Retirement Scheme Loan

85.00 120.00

Less : Waiver of Guarantee Fee by Government of India 85.00 - 120.00 -

TOTAL (B) 36.03 60.94

TOTAL (A) + (B) 463.80 470.80

NOTE 29 - DEPRECIATION AND AMORTISATION EXPENSES(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

a) Depreciation 342.07 333.88

b) Amortisation 63.58 74.28

TOTAL (A) + (B) 405.65 408.16



69

NOTE 30 - OTHER EXPENSES(` in lakhs)

P a r t i c u l a r s 2011-12 2010-11

1. Expenses on Foreign Experts 2.57 5.51 2. Travelling Expenses 1,188.42 1,200.94 3. Foreign Deputation 94.88 214.48 4. Maintenance & Repairs to Buildings 611.58 517.50 5. Repairs (Others) 65.18 31.99 6. Stores & Spares consumed 78.81 77.20 7. Printing & Stationery consumed 138.55 170.57 8. Expenses on Computer Consumables 48.18 55.75 9. Rent (Non-residential) 92.74 43.11

10. Rates & Taxes 40.79 21.35 11. Advertisement & Publicity 179.16 209.91 12. Payment to Auditors :

(a) As Statutory Auditor 2.50 2.50 (b) For Tax Audit Matters 0.40 0.40 (c) For other services 1.50 1.50 (d) For reimbursement of expenses 3.60 8.00 3.60 8.00

13. Insurance 4.47 6.93 14. Training Expenses :

(a) Inland 46.53 37.99 (b) Foreign - 46.53 0.10 38.09

15. Postage, Telephones & Telegraphs 138.44 171.25 16. Computer Services 98.48 173.88 17. Power and fuel 535.57 478.23 18. Legal & Professional Charges 22.62 30.79 19. Assets Charged to Revenue 0.52 2.20 20. Miscellaneous Expenses 490.52 409.08 21. Fees Bill Withdrawn 17.18 53.12 22. Expenses on VRS Loan 1.98 1.55 23. Expenses on Corporate Social Responsibility 281.05 247.87 24. Provision for Bad & Doubtful Debts 2,756.75 86.65 25. Bad Debts Written Off 7.12 9.71 26. Loss on Sale / Disposal of Fixed Assets 15.92 4.64 27. Expenses on Liquidated Damages 2.87 46.25 28. Provision for LD Recovered by Clients 108.68 88.99 29. Service Tax 47.34 55.30 30. STDS Certificate Receivable Written Off 1.60 2.66 31. ITDS Certificate Receivable Written Off 1.74 136.66 32. Provision for Doubtful Deposit with Others - 2.75 33. Provision for Doubtful Earnest Money Deposit - 0.76 34. Advances / Deposits written off 13.91 -

TOTAL 7,142.15 4,603.67



70

NOTE 31 - PRIOR PERIOD ITEMS(` in lakhs)

Sl.No.

P a r t i c u l a r s 2011-12 2010-11

DEBIT CREDIT DEBIT CREDIT

1. Salaries & Wages - 15.91 - -2. Depreciation 64.28 - 17.00 0.09 3. Amortisation 11.60 - 15.16 -4. Staff Welfare - - 0.27 -5. Income from Township - 3.58 - -6. Finance Charges - - 0.20 -7. Rent (Residential/Non-Residential) - 0.22 - -8. Repairs and Maintenance 1.20 0.67 0.36 4.02 9. Power and Fuel 1.38 0.13 - -

10. Medical Expenses - 16.34 - -11. Printing and Stationery - - 0.48 -12. Training Expenses 1.14 - - -13. Telephone Charges - - 0.14 -14. Payment to Sub-contractors - - 0.94 0.15 15. Miscellaneous Expenses - - - 1.00 16. Miscellaneous Income 0.16 1.33 - -17. Income from Services Rendered 14.45 - 24.46 1.85 18. Service Tax - 10.15 1.58 37.84 19. Travelling Expenses - - - 0.15 20. Computer Services 0.24 8.65 0.50 -

TOTAL 94.45 56.98 61.09 45.10

NET DEBIT / (CREDIT) 37.47 15.99



71

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, accounting standards notified under the Companies (Accounting Standards) Rules, 2006 as applicable and the relevant provisions of the Companies Act, 1956.

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 Revised Schedule VI to the Companies Act, 1956.

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 Fixed assets including lease-holds are stated at cost including expenses incidental to acquisition and

installation and includes amount added on revaluation of certain land and buildings less accumulated depreciation.

4.2 Assets 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 Assets retired from active use are shown separately under fixed assets at lower of net book value and net realisable value.

5. DEPRECIATION & AMORTISATION

A. Tangible Assets 5.1 Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner

prescribed in Schedule XIV of the Companies Act, 1956 (as amended), read with Section 205(2)(b) of the said Act, except for the following which are depreciated at the rates mentioned against them on the basis of management’s estimate of their useful life.

a) Internal Partition 6.33%

b) Air-Conditioning Machinery, Room Air-Conditioner & Water Coolers 7.07%

c) Assets of value in excess of ` 1,000/- and upto ` 5,000/- each 100%

NOTE 32 - SIGNIFICANT ACCOUNTING POLICY



72

d) On revalued assets depreciation is charged over useful life of the assets commencing from the year of revaluation by debiting Revaluation Reserve.

5.2 Leasehold assets are written off over the lease period.

B. Intangible Assets 5.3 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.

5.4 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 Revised Schedule VI. Non-current

investments are classified as trade investment and other investment as per Revised Schedule VI.

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 consumable are valued at lower

of cost, on First in First Out (FIFO) basis or Net Realisable basis. 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.

8. ENGINEERING RESEARCH & DEVELOPMENT 8.1 Expenditure incurred on Engineering Research and Development activities are charged to revenue in

the relevant years.

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 Letter 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.



73

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. 12.3 Employee benefits under defined benefits plans comprising PF, Gratuity, Leave Enchashment 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 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.

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.



74

NOTE 33 - CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

(` in lakhs)Particulars 2011-12 2010-11

33.1 Contingent Liabiltiesi) Claims against Company under liquidated damage clause by the

Clients.1.61 84.93

ii) Letters of Credit opened with Bankers for purchase of equipment & components and technical services.

849.10 913.22

iii) Guarantees given by Banks for and on behalf of the Company to different clients etc.

11,238.46 13,193.83

iv) Income tax in dispute / under appeal 1,478.10 1,446.63

v) Sales tax demands pending appeals with Appellate Authorities. 1,859.76 1,925.82

vi) Claims against Company by Contractors/Suppliers, etc. 1,196.22 1,308.12

vii) Claims against electricity supply by Jharkhand State Electricity Board (JSEB)

148.65 148.65

viii) The Regional Provident Fund Commissioner-II, Jharkhand, Ranchi ordered for payment of `385.27 Lakhs by way of interest and penalty to the BOT, arising out of delayed remittances by the company to the BOT, MECON Employees PF Trust. The company disputed the same and filed an appeal with EPF, Appellate Tribunal, New Delhi after depositing `96.32 Lakhs as interim adhoc advance.

385.27 385.27

33.2 CommitmentsEstimated amount of contracts/orders remaining to be executed/supplied on capital account and not provided for 25.94 100.09

NOTE 34 - PROPOSED DIVIDEND(` in lakhs)

Particulars 2011-12 2010-11

Proposed dividend on preference shares Total dividend (` in lakhs) ** Dividend per share (`)

Proposed dividend on equity shares Total dividend (` in lakhs) Dividend per share (`)

295.030.50

802.772.00

315.000.50

NILNIL

** Dividend @ 5% on `5,040 lakhs upto 31st March, 2012 and dividend @ 5% on `1,260.00 lakhs upto the date of redemption is considered for 2011-12.

NOTE 35 - UNUTILISED FUND OUT OF ISSUE OF SECURITIES(` in lakhs)


Unutilised balance out of Bond issue for Voluntary Retirement Scheme (VRS) is kept in bank account

225.56 338.33



75

NOTE 36 - ADDITIONAL INFORMATION AND OTHER DISCLOSURES(` in lakhs)


36.1 Earnings in Foreign Exchange (Refer Note 36.16)Fees for services rendered. 482.11 618.51

36.2 Expenditure in Foreign Currency(i) Engineering Fees(ii) Other matters

250.2434.35 284.59

111.71172.71 284.42

36.3 Value of Imports (Calculated on CIF basis)(i) Equipment, components & spares parts used in construction

contract(ii) Capital goods

NIL

NIL NIL

12.81

NIL 12.81

36.4 (i) Expenses on Advertisement & Publicity Advertisement Publicity(ii) Expenses on Public Relation Establishment

62.5613.24 75.80

64.83

55.747.80 63.54

60.60

36.5 Expenses on Engineering, Research & Development Wing / establishment, including capital assets 107.52 75.25

36.6 Particulars of remuneration of whole time Directors including Managing Director :(i) Salaries & Allowances(ii) Company’s Contribution to Provident Fund(iii) Employee BenefitsRemuneration excludes medical facilities provided at Company's hospital, monetary value of which is not ascertainable.

68.865.53

98.72 173.11

62.385.19

74.17 141.74

36.7 - Particulars of Provisions(` in lakhs)

PARTICULARS Provision for Bonus

Provision for Bad & Doubtful Debts

Provi-sion for Liquidated Damages recovered by Clients

Provision for Claims Recover-able

Provision for Doubt-ful Earnest Money Deposit

Provision for Doubt-ful Deposit with Oth-ers

Provi-sion for doubtful advances to suppli-ers/ sub-contractors

Opening Balance as on 01.04.2011

2.03 (4.74)

565.86 (504.45)

96.91 (7.92)

7.48 (8.04)

7.32 (6.71)

187.09 (184.49)

181.94(182.09)

Add: Provision made during the period

1.76 (2.03)

2,756.75 (86.65)

108.68 (88.99)

NIL (NIL)

NIL (0.76)

NIL (2.75)

NIL (NIL)

Less : Provision utilised during the period

2.03 (4.74)

20.99 (6.26)

0.30 (NIL)

0.32 (0.56)

7.32 (0.15)

2.75 (0.15)

NIL(0.15)

Less : Unused provision reversed during the period

NIL (NIL)

19.09 (18.98)

0.29(NIL)

0.06(NIL)

NIL (NIL)

NIL (NIL)

NIL (NIL)

Closing Balance as on 31.03.2012

1.76 (2.03)

3,282.53 (565.86)

205.00 (96.91)

7.10(7.48)

NIL (7.32)

184.34(187.09)

181.94(181.94)

Figures in bracket relates to previous year



76

36.9 - Disclosure Under Accounting Standard-15 (Revised) on “Employee Benefits”

36.8 - Disclosure Under Accounting Standard-7 on “Construction Contracts”(` in lakhs)


i) Contract Revenue recognized as revenue for the period 64,383.43 64,137.96

ii) Contract costs incurred and recognized profits (Less recognized losses) upto the reporting date

3,10,097.43 2,45,714.00

iii) Advances received 10,681.86 13,895.09

iv) Gross amount due from customers for contract work 36,015.15 18,306.19

v) Gross amount due to customers for contract work 7,138.06 21,707.17

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 for earned leave and 240 days for half pay leave. 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 or a fixed amount of `2,400/- p.a. payable under Outdoor Medical Treatment (ODMT) scheme

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.



77

B. Reconciliation of Present Value of Defined Benefit Obligation (DBO)(` in lakhs)

1 2 3 4 5 6 7 8

Sl. No.

Particulars Gratuity Leave En-cashment

Post Retirement

Medical Benefits

Post Retirement Settlement

Benefits

EFBS Retirement Gift

Long Ser-vice Award

***

LTC/LTA ***

P.V. of DBO (Opening) (Recognised)

6,695.40 10,706.13 410.63 179.60 122.25 35.26 10.44 134.28

P.V. of DBO (Opening) (Recognised) (Previous Year)

6,987.36 10,503.70 441.39 182.97 134.38 35.92 7.97 308.94

PV of DBO as on 01.04.2007 (Transitional Provision) (Opening)

- - - - - - 1.50 30.65

PV of DBO as on 01.04.2007 (Transitional Provision) (Opening) (Previous Year)

- - - - - - 3.01 61.30

1 Current Service Cost 364.64 884.87 - 8.94 - 1.75 1.91 -

Current Service Cost (Previous Year)

369.90 877.94 - 8.90 - 1.75 1.80 -

2 Interest Cost 517.56 812.92 32.42 13.92 8.58 2.73 0.96 10.10

Interest Cost (Previous Year) 536.07 794.36 34.72 14.04 9.62 2.76 0.87 18.28

3 Contributions made - - - - - - - -

Contributions made (Previous Year)

- - - - - - - -

4 Actuarial Loss/ (Gain) (293.13) (124.77) 18.00 (10.22) 1.33 (15.49) 0.37 (54.66)

Actuarial Loss/ (Gain) (Previous Year)

506.54 (227.37) (22.78) (10.41) 14.97 0.91 (0.26) (174.49)

5 Plan Amendments - - - - - - - -

Plan Amendments (Previous Year)

- - - - - - - 65.43

6 Curtailment loss / (gain) - - - - - - - -

Curtailment loss / (gain) (Previous Year)

- - - - - - - -

7 Premium Paid (13.07) - - - - - - -

Premium Paid (Previous Year) (13.92) - - - - - - -

8 Past Service Cost - - - - - - - -

Past Service Cost (Previous Year) - - - - - - - -

9 Benefit Paid (951.04) (1,680.16) (30.64) (18.26) (33.08) (1.94) (2.45) (35.71)

Benefit Paid (Previous Year) (1,690.55) (1,242.50) (42.71) (15.90) (36.72) (6.08) (1.45) (114.53)

P.V. of DBO (Closing) (Recognised)

6,320.36 10,598.99 430.41 173.98 99.08 22.31 12.73 84.66



78

P.V. of DBO (Closing) (Recognised) (Previous Year)

6,695.40 10,706.13 410.63 179.60 122.25 35.26 10.43 134.28

*** Transitional Provision:

P.V. of DBO -- Recognised - - - - - - 7.51 153.22

P.V. of DBO -- Recognised (Previous Year)

- - - - - - 6.01 122.57

P.V. of DBO -- Unrecognised (Closing)

- - - - - - - -

P.V. of DBO -- Unrecognised (Closing) (Previous Year)

- - - - - - 1.50 30.65

P.V. of DBO as on 01.04.2007 -Total

- - - - - - 7.51 153.22

Experience Gain/(Loss) adjustments on Plan Liabilities as on 31.03.2012

(129.89) 144.00 30.38 (5.85) 1.33 (2.79) 0.32 (53.56)


506.54 (227.37) (22.78) (10.41) 14.97 0.91 (0.26) (174.49)


955.89 (1,375.38) (9.44) (0.62) 10.17 (3.46) (0.87) (16.56)


(31.73) (427.61) (15.59) (0.28) (32.69) (0.41) (0.40) (19.77)


(73.26) (367.57) 13.78 (0.24) 11.22 (0.03) (3.22) (73.38)

Experience Gain/(Loss) adjustments on Plan Assets as on 31.03.2012

4.18


14.77 - - - - - - -


(43.04) - - - - - - -


0.54 - - - - - - -


39.19 - - - - - - -

1 2 3 4 5 6 7 8

Sl. No.

Particulars Gratuity Leave En-cashment

Post Retirement

Medical Benefits


Benefits


Long Ser-vice Award

***

LTC/LTA ***



79

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. During 2011-12 the investments of the fund is also made in flexi deposit account with Banks. The reconciliation of fair value of assets of the Gratuity Fund and defined benefit Gratuity obligations is as under:

(` in lakhs)

Sl. Particulars As on 31.03.2012

As on 31.03.2011

As on 31.03.2010

As on 31.03.2009

As on 31.03.2008

1 F.V of Plan Assets (Opening) 6,428.35 5,622.65 3,473.70 3,232.97 3,021.58

2 Expected return on Plan Assets (Net)

560.66 471.97 393.21 299.51 239.05

3 Benefit Payment (943.16) (1,686.04) (506.22) (115.16) (117.59)4 Contributions made 715.00 2,005.00 2,305.00 55.84 50.74 5 Actuarial (Loss)/ Gain 4.18 14.77 (43.04) 0.54 39.19 6 F.V. of Plan Assets (Closing) 6,765.03 6,428.35 5,622.65 3,473.70 3,232.97

7 P.V. of D.B.O. (Closing) 6,320.35 6,695.40 6,987.36 7,768.91 2,633.06

Net liability* / (assets) recognised in the Balance Sheet

(444.68) 267.05 1,364.71 4,295.21 (599.91)

* The Company expects to contribute the amount to the Gratuity Fund during the Year 2012-13 after considering liability and fund position.

D. Provident FundAnalysis of the Defined Benefit Obligation (` in lakhs)Particulars As on 31.03.2012 As on 31.03.2011

Present value of defined benefit obligations that are wholly unfunded 3,952.74 4,206.68 Present value of defined benefit obligations that are wholly funded 33,737.36 30,910.71 Defined Benefit Obligation 37,690.10 35,117.39

Particulars As on 31.03.2012 As on 31.03.2011

F.V. of Plan Assets 33,737.36 30,910.71 Net liability recognised in the Balance Sheet 3,952.74 4,206.68

The company has provided / written back liability based on actuarial valuation of Provident Fund as on 31.03.2012. In addition, Company’s Contribution paid/payable during the year to Provident Fund are recognised in the Statement of Profit and Loss. For exempt Provident Fund Trust the defined benefit obligation arises only if at any point of time in future, the scheme has insufficient assets to meet guaranteed interest rate declared by EPFO on employee corpus in Provident Fund.

The defined benefit obligations, other than Gratuity and Provident Fund, are unfunded.



80

E. Expenses recognised in Statement of Profit & Loss for the year ended 31st March, 2012(` in lakhs)

Sl. Particulars

1 2 3 4 5 6 7 8

Gratuity Leave Encashment

Post Retirement

Medical Benefits


Benefits


Long Service Award

***

LTC/LTA ***

1 Current Service Cost 364.64 884.87 - 8.94 - 1.75 1.91 -

Current Service Cost (Previous Year)

369.90 877.94 - 8.90 - 1.75 1.80 -

2 Interest Cost 517.56 812.92 32.42 13.92 8.58 2.73 0.96 10.10

Interest Cost (Previous Year) 536.07 794.36 34.72 14.04 9.62 2.76 0.87 18.28

3 Actuarial Loss/ (Gain) (297.31) (124.77) 18.00 (10.22) 1.33 (15.49) 0.37 (54.66)

Actuarial Loss/ (Gain) (Previous Year)

491.77 (227.37) (22.78) (10.41) 14.97 0.91 (0.26) (174.49)

4 Past Service Cost - - - - - - - -

Past Service Cost (Previous Year) - - - - - - - -

5 Plan Amendments - - - - - - - -

Plan Amendments (Previous Year) - - - - - - - 65.43

6 Curtailment loss / (gain) - - - - - - - -

Curtailment loss/ (gain) (Previous Year)

- - - - - - - -

7 Expected Return on Plan Assets (573.73) - - - - - - -

Expected Return on Plan Assets (Previous Year)

(485.89) - - - - - - -

Sub Total 11.16 1,573.02 50.42 12.64 9.91 (11.01) 3.24 (44.56)

Sub Total (Previous Year) 911.85 1,444.93 11.94 12.53 24.59 5.42 2.41 (90.78)

*** Transitional Provision

1/5th of P.V. of DBO as on 01.04.2007

- - - - - - 1.50 30.64

1/5th of P.V. of DBO as on 01.04.2007 (Previous Year)

- - - - - - 1.50 30.64

Total 11.16 1,573.02 50.42 12.64 9.91 (11.01) 4.74 (13.92)

Total (Previous Year)

911.85 1444.93 11.94 12.53 24.59 5.42 3.91 (60.14)

Actual return on plan assets 577.91 - - - - - - -

Actual return on plant assets (Previous Year)

500.66 - - - - - - -

F. Actuarial Assumptions

1 Discount Rate (per annum) --- 8.70% p.a.

2 Mortality Rate --- Indian Assured Lives Mortality (1994-96) Modified Ultimate

3 Withdrawal Rate (per annum) --- 0.10% to 0.50% depending on age group. 10% flat at all age groups for Contract Employees

4 Medical inflation --- 12% for first 5 years and thereafter 8%

5 Expected rate of return on Plan Assets

--- 9 - 9.5% p.a.

6 Salary Escalation --- 15% p.a. on Basic PayThe estimate of future salary increase considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors.

G. Defined Contribution Scheme (w.e.f. 01.01.2007)

Post Retirement Pension Benefits 12% of Basic Pay & Dearness Allowance to be contributed by the Company.

Post Retirement Medical Benefits 1.19% of Basic Pay & Dearness Allowance to be contributed by the Company.



81

H. Expenses recognised in Statement of Profit & Loss for the year(` in lakhs)

ParticularsPost Retirement Pension

BenefitsPost Retirement Medical Benefits

2011-12 2010-11 2011-12 2010-11

Expenses charged to Statement of Profit and Loss 1,598.23 1,528.26 158.49 151.55

36.10 - 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 A. K. Ghosh (upto 29.02.2012)

Shri K. K. Mehrotra

Shri J. Mathew

Shri M. N. Sharif (w.e.f. 12.12.2011)

Shri A. K. Tyagi (w.e.f. 01.03.2012)

Shri U. P. Singh

Shri S. Machendra Nathan

Shri B. Ramesh Kumar

Shri M. R. Pasrija

Shri G. Ojha

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. No.

Nature of transactions Key Management Personnel Joint Venture

2011-12 2010-11 2011-12 2010-11

a) Managerial Remuneration 74.39 67.57 - -

b) Employee Benefits 98.72 74.17 - -

c) Sitting Fees 1.90 - - -

d) Receipts against Foreign Deputation exp. etc.

- - - -



82

36.11 - 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 Venture Company

% of Company’s Ownership

Interest

Assets Liabilities Income Expenditure Contingent Liabilities

CapitalCommit-

ments

Metallurgical & Engineering Consultants (Nigeria) Limited

50(50)

162.63(196.02)

264.01(279.48)

12.67(23.39)

35.20(49.96)

NIL(NIL)

NIL(NIL)

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 31.12.2010. Reporting currency of Metallurgical & Engineering Consultants (Nigeria) Ltd. is Naira.

Assets and Liabilities are reported using the closing rate of exchange as on 31.12.2010 whereas Income and Expenditure are reported using the average exchange rate in force during the year 2010 as available.

36.12 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 categorised in different groups, it is not possible to list out quantitative details.

36.13 Payments against Supplies & Services from SSI Units are generally made in accordance with agreed credit terms and there is no overdue amount.

36.14 There is no reported Micro, Small and Medium Enterprise as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006”, to whom the company owes dues.

36.15 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 31.03.2012 as per Accounting Standard -28.

36.16 Owing to uncertainty, income from foreign jobs is recognized on receipt of fees from the client against work done/progress achieved.

36.17 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees’ Union/Association filed writ petitions with the Hon’ble High Court at Kolkata challenging the above Notification. In pursuance of Hon’ble Court’s orders, the amount of tax deducted at source on house perquisite w.e.f. 1st April 2003 upto 31st March 2005 has been kept separately as term deposits with banks amounting `330.09 lakhs (Previous Year `305.93 lakhs), pending final decision of the Hon’ble Court. Such deductions and deposits after 31st March 2005 have been made in accordance with amended law/judicial decisions. However, there is no impact on accounts of the company as the additional tax, if required, shall be recoverable from the employees.

36.18 During the year `281.05 lakhs (Previous year `247.87 lakhs) is allocated/provided towards Corporate Social Responsibility (CSR) Fund for CSR expenditure in line with the Guidelines on CSR issued by the Department of Public Enterprises, Government of India.

36.19 During the year, `355.19 lakhs (Previous year `468.00 lakhs) is provided as ascertained liability towards 4% notional increment on pay fixation following wage revision 2007. The matter is pending with Ministry.

36.20 The wage revision for non-executive employees is due w.e.f. 01.01.2012. `40.50 lakhs is provided as ascertained liability towards wage revision for non-executive employees.



83

NOTE 36.21 - Disclosure Under Accounting Standard-17 on “Segment Reporting”

BUSINESS SEGMENT (PRIMARY SEGMENT) REPORTING FOR 2011-12(` In Lakhs)

SEGMENTS METALS POWER INFRASTRUCTURE OIL & GAS TOTAL

Particulars

Segment Revenue

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

57,869.19 54,514.68 1,703.56 2,770.36 2,357.03 3,237.83 2,453.65 3,615.09 64,383.43 64,137.96

Segment Result [Profit/(Loss)]

14,039.36 10,789.92 (134.71) 734.60 (3,751.44) (294.50) (512.85) 340.64 9,640.36 11,570.66

Unallocated Corporate Expenses

3,738.94 1,802.32

Operating Profit/(Loss)

5,901.42 9,768.34

Finance Costs 463.80 470.80

Interest Income 5,417.72 3,810.22

Income Taxes 6,517.18 4,724.31

Non Operating Loss 15.92 4.64

Non Operating Income 1,104.35 863.85

Accretion / (Decretion) to Jobs-in-Progress

70.75 (510.92)

Provision Written Back 8,139.01 636.75

Net Profit/(Loss) 13,636.35 9,368.49

Capital Employed 37,945.00 31,164.26



84

36.22 - 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 into four “Strategic Business Units” (SBUs) in line with the recommendation of the Consultants w.e.f. 2004-05 as below:

Segment Definitions :

i) ”Metals” includes Iron & Steel, Rolling Mills, Non-Ferrous, Raw Materials & Mining, Refractories etc.

ii) “Power” includes Power plant- Thermal & Hydel, Transmission & Distribution, RLA & RMU studies etc.

iii) ”Oil & Gas” includes Oil & Gas pipelines, Petro-chemical & Refineries, POL Depots, Retail Outlets etc.

iv) ”Infrastructure” includes Civil & Structural Engineering, 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) Fixed assets used in the company’s business or liabilities contracted are common in nature for all and cannot be attributed to a specific segment. Therefore, segment-wise assets, liabilities and capital employed cannot be disclosed.

36.23 Due to changes in accounting policy during 2011-12, there is no impact on profit and turnover for the year. Due to classification of current & non-current as per Revised Schedule VI, current assets are decreased by `4,718.26 lakhs, non-current assets are increased by `4,718.26 lakhs, non-current liabilities are increased by `27,665.10 lakhs (net) and current liabilities are decreased by `27,665.10 lakhs (net).

36.24 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.

36.25 Previous year’s figures have been regrouped / recast wherever necessary in the Balance Sheet, Statement of Profit & Loss, Cash Flow Statement and Notes.

◊∑§ÊÚŸ Á‹Á◊≈U«U MECON LIMITED

2011 -2012 2011 39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT




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2011 -20122011 39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT39 Ê° ÊÌ·∑§ ¬˝ÁÃŒŸ39th ANNUAL REPORT




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