McNally Bharat Engineering Company Limited Financial Results Clarification
Summary of the Company’s Response
McNally Bharat Engineering Company Limited (MBECL) provided a point-by-point clarification to The National Stock Exchange of India Limited (NSE) regarding observations on its unaudited financial results for the quarter ended 30th June 2026, which were originally submitted to the exchange on 12th August 2026. The clarification was issued on 17th September 2026 in response to emails from the NSE dated 8th September 2026 and 17th September 2026.
Date and Nature of the Query
- Date of NSE Query: 8th September 2026 and 17th September 2026 (via NEAPS emails)
- Date of Company's Response: 17th September 2026
- Nature of Query: The NSE raised two specific observations:
1. The financial results were not signed by an authorized signatory and were only signed by a director.
2. A machine-readable or legible copy of the financial results was not submitted.
Company’s Clarification on Observations
| Sl. No. | Observation | Clarification |
| 1 | Financial results not signed by authorized signatory/ies - Signed by director | The Financial Results for the quarter ended 30th June 2026 were signed by Mr. Partha Sarathi Bhattacharyya (DIN: 00329479), Chairman, who was duly authorized by the Board of Directors via a resolution dated 12th August 2026. A certified copy of the board resolution (Annexure A) was enclosed as proof of authorization. |
| 2 | Machine Readable Form / Legible copy of Financial Results not submitted | The Machine Readable Format of the Financial Results was duly submitted on 12th August 2026. A copy was re-submitted along with the clarification letter as Annexure B. |
Reference to Regulatory Compliance
The company's submission and clarifications are made pursuant to Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The financial results were prepared in accordance with the format prescribed under Regulation 33.
Details of Financial Results and Key Issues
The financial results for Q1 FY27 (ended 30th June 2026) and the accompanying notes reveal several material items:
Financial Performance (Standalone):
- Revenue from Operations: ₹1,505.17 Lakhs
- Total Income: ₹1,520.88 Lakhs
- Total Expenses: ₹2,529.94 Lakhs
- Loss Before Tax and Exceptional Items: ₹(1,009.06) Lakhs
- Exceptional Item (Expense): ₹(1,518.00) Lakhs (See Note 6)
- Loss Before Tax: ₹(2,527.06) Lakhs
- Loss for the Period: ₹(2,527.06) Lakhs
- Total Comprehensive Loss: ₹(2,543.56) Lakhs
- Earnings Per Share (Basic & Diluted): ₹(7.58)
Key Clarifications and Ongoing Matters from Notes to Accounts:
- Note 5(b) - Share Buyback Obligation: The Hon'ble NCLT, in its order dated 10th June 2026 (IA (I.B.C.) No. 294/KB/2026), directed the Successful Resolution Applicant (SRA), M/s BTL EPC Ltd, to mandatorily buy back 5% of the equity shares allotted to Financial Creditors for an aggregate consideration of ₹3,000 Lakhs, payable forthwith with interest from the original due date of 17th February 2026. The company has initiated the process and dispatched offer letters to creditors.
- Note 6 - Exceptional Item (NCLT Order): An NCLT order dated 12th June 2026 (I.A. (IB) No. 342/KB/2023) held that adjustments of ₹1,518.00 Lakhs made in favor of certain Joint Ventures (McNally-Trolex JV, McNally-AML JV, McNally-Trolex-Kilburn JV) were preferential transactions. The JVs were directed to refund this amount within 60 days with 9% interest. Based on legal advice, the company recognized a provision of ₹1,518.00 Lakhs as an exceptional expense. Interest liability is not yet provided for.
- Note 4 - EPFO Demand: EPFO raised a demand for ₹564.81 Lakhs (damages u/s 14B) and ₹395.52 Lakhs (interest u/s 7Q). The company has paid ₹6,368.95 Lakhs from accumulated funds. Recovery is currently stayed by the Jharkhand High Court order dated 22nd January 2026; thus, no liability is recognized as it is contingent.
- Note 7 - SOP Fines: The company paid SOP fines to BSE (₹11.69 Lakhs) and NSE (₹16.37 Lakhs) after partial waivers. Trading permission applications filed with BSE (2nd July 2026) and NSE (3rd July 2026) are pending approval.
- Note 8 & 5(c) - Balances and Escrow Account: Trade receivables, payables, and other balances are subject to confirmation and reconciliation. An unpaid amount of ₹228.04 Lakhs for Resolution Plan liabilities is parked in an escrow account controlled by the erstwhile Resolution Professional and is not reflected in these financial results. A further ₹34.24 Lakhs is pending settlement.
- Auditor Change: The Board, based on the Audit Committee's recommendation, proposed appointing M/s. Singhi & Co. (FRN: 302049E) as Statutory Auditors for a 5-year term from the conclusion of the 63rd AGM (25th Sept 2026) until the 68th AGM, replacing M/s. V. Singhi & Associates.
Topic Tags: Regulatory Response, Financial Results Clarification, NCLT Order, Insolvency Resolution Process, Compliance, Share Buyback, Auditor Appointment