Comprehensive Summary
McNally Bharat Engineering Company Limited successfully implemented an NCLT-approved resolution plan that resulted in a dramatic financial turnaround, reporting a net profit of ₹3,45,219 lakhs for FY2025-26 compared to a loss of ₹1,71,609 lakhs in the previous year. This extraordinary performance was driven by exceptional income of ₹3,89,144 lakhs from the extinguishment of ₹6.90 lakh crore in liabilities under the resolution plan.
Resolution Plan Implementation
The Corporate Insolvency Resolution Process (CIRP) was initiated on 29th April 2022, with the resolution plan submitted by BTL EPC Limited approved by NCLT on 19th December 2023. The plan involved complete capital restructuring: 95% of existing equity was extinguished, with fresh issuance of 3.33 crore shares allocated to Mandal Vyapaar Private Limited (90% as BTL EPC's SPV), financial creditors (5%), and existing public shareholders (5%). The company received listing approvals from BSE and NSE, though trading permission remains awaited.
Financial Restructuring Impact
The resolution plan extinguished massive liabilities including ₹2,95,687 lakhs in bank borrowings, ₹3,69,662 lakhs in interest, and ₹18,409 lakhs in operational creditor dues. The capital reduction from ₹211.57 crores to ₹33.33 crores and preferential allotment transformed the ownership structure, with Mandal Vyapaar gaining controlling interest.
Corporate Governance Changes
A new board was constituted on 6th January 2025 with 10 director appointments and 7 resignations, effectively transferring control. The 63rd AGM held on 25th September 2026 approved financial statements, director reappointments, and auditor changes, including the continuation of Mr. Mehar Chand Thakur as Independent Director beyond age 75.
Audit and Compliance Issues
Auditors issued an adverse opinion on internal financial controls, citing material weaknesses in balance confirmations, fixed asset recording, and inadequate risk assessment processes. The company faced regulatory challenges including SOP fines from stock exchanges for governance non-compliance, partial waivers, and an EPFO demand of ₹960 lakhs with stay granted by Jharkhand High Court.
Operational and Financial Position
Total income declined to ₹7,467 lakhs from ₹10,583 lakhs YoY, but the resolution impact drove profitability. Key ratios improved significantly: interest coverage ratio turned positive at 16.56 times, current ratio improved to 1.19 from 0.09, and net profit margin reached 46.95%. The balance sheet shows total assets of ₹82,374 lakhs with deferred tax assets of ₹51,707 lakhs and cash balances of ₹584 lakhs.
Ongoing Challenges
The company continues to face MSME dues of ₹520 lakhs, protected bank guarantees of ₹15,022 lakhs, and pending settlement of ₹262 lakhs. Employee strength stood at 323 with significant gender imbalance (314 male, 9 female). The income tax search conducted during the year may lead to future assessments.
Documentation Corrections
The company issued a corrigendum to its FY26 annual report correcting director birthdate errors and page numbering issues, confirming these did not affect the financial statements. Revised documents were distributed electronically to shareholders.
The resolution plan implementation represents a complete financial and operational restructuring that has positioned McNally Bharat for renewed operations under new ownership, though significant governance and compliance challenges remain.