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Notes to Accounts of Power Mech Projects Ltd.

Mar 31, 2015

1. During the year, the company issued 1,080,000 equity shares of Rs 10/- each as fully paid-up bonus shares aggregating to Rs.10,800,000/- in the ratio of 10:1.2 ( i.e 1.2 shares for every 10 shares held, except to members holding 1,940,264 shares)

2. During the year, the company converted 1125 compulsorily convertible Debentures of Rs. 1 lakhs each into 562,500 equity shares of Rs.10/- each at a premium of Rs.190/- each.

Rights, Preferences and restrictions attached to Equity shares

3. The company has only one class of Equity shares having a face value of Rs.10/- each. Each holder of equity share is entitled to one vote per share held.

The company declares and pays dividends as proposed by the Board of directors and is subject to approval of the shareholders in the ensuing Annual general meeting. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company in proportion to their shareholding after distribution of payments to preferential creditors.

4. The company is not a subsidiary company to any of the company. The company had 2 subsidiary companies Hydra Magus Pvt. Limited and Power Mech Industry Pvt. Ltd. None of the shares of the company are held by its subsidiary companies. Further, the company is in the process of setting another subsidiary company in Saudi Arabia under the name of Mas Power Mech Arabia (MASPA) and incorporation is under progress. The company agreed to subscribe for 51% share in the said company.

5. Aggregate number of bonus shares issued during the period of 5 years immediately preceding the reporting date :- During the Financial Year 2014-15, the company had allotted 1,080,000 equity shares as fully paid up bonus shares by capitalising part of securities premium.

Note:

(i) Current maturities represents amounts to be settled within 12 months after the date of balance sheet. (ii) The segregation of above amounts are made based on the time schedule in execution of projects, estimated turnover, probability in completion of works, terms of release of amounts and estimates of the management.

Note:

a) The term loans from banks and companies are secured by way of hypothecation of assets funded under the said facility. Further, the loans are guaranteed by Managing Director and a Director in their personal capacities.

b) The above loans carries interest varies from 7.5 % to 12.75%

c) The above loans are repayable in monthly/quarterly installments.

d) The non-current portion of above term loans are repayable in following manner. Banks: 2016-17 Rs.156,330,354 & 2017-18 - Rs. 55,024,142 Companies: 2016-17 - Rs.19,319,505 & 2017-18 - Rs. 14,844,868

e) No defaults were made in repayment of above term loans.

Note:

a) Working capital loans from SBH, Standard Chartered bank, SBI, ICICI and Ratnakar bank are secured by way of first charge on entire current assets of the company on pari passu basis. Further these loans are secured by way of first charge on fixed assets both present and future, excluding those assets against which charge was given to equipment financiers. The said loans are collaterally secured by way of equitable mortgage of immovable properties belonging to the company, Managing director, director and a firm.

b) In case of loan from Ratnakar bank, the company is in the process of creating security against its assets as per the terms of sanction.

c) Bill Discounting facilities with Citi Bank is secured by way of first charge on pari-passu basis on inventories and book debts of the company.

d) Overdraft facility from banks is secured against fixed deposits with banks.

e) All the above loans are guaranteed by Managing Director and a director in their personal capacities.

Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006.

Based on and to the extent of information obtained during the year 2014-15 and available with the company, with regard to the status of their suppliers under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED ACT), on which the auditors have relied, the disclosure requirement with regard to the payment made/ due to Micro, Small and Medium Enterprises are given below.

* Represents dividend for the financial year 2011-12 and 2013-14.

6. A) Particulars disclosed pursuant to AS-18 "Related party transactions.

i) Key Managerial personnel

S. Kishore Babu, Chairman and Managing director

S. Lakshmi - Director W/o S. Kishore Babu

S. Rohit s/o S. Kishore Babu

ii) Relatives of Key Managerial personnel

S. Vignatha d/o S. Kishore Babu

S. Kishore Babu (HUF)

- Power Mech Infra Limited

- Bombay Avenue Developers Private Limited iii) Companies controlled by KMP/Relatives of KMP - True Rrav Marketing Private Limited

- Power Mech Foundation

- Lakshmi Agro Farms

- Power Mech Overseas Projects FZE, Sharjah

(Winded up in F.Y 2013-14) iv) Subsidiary companies

- Hydro Magus Private Limited

- Power Mech Industry Private Limited

7. In the opinion of the management, current assets, loans and advances have a value on realization in the ordinary course of business equal to the value at which they are stated. Balances in some of the parties account are subject to confirmation and reconciliation.

8. The company has claimed an amount of Rs. 53,776,924/- (As on 31.03.2014 Rs. 69,227,365/-) being the Works contract tax deducted by the customers and outstanding as on 31.03.15 in respect of works carried out in some of the states. The company's management is of opinion that there is no sales tax liability in respect of the said works carried out and hence claimed as refund due and grouped under loans and advances. Sales tax liability, if any has arisen, on completion of assessments will be charged to Profit and Loss account.

9. Segment reporting:

During the financial year 2014-15, the company operates only in one segment i.e in construction activities. This, in the context of Accounting standard-17 "Segment reporting" as specified in the Companies (Accounting Standards) Rules, 2006 is considered to constitute one single primary segment. The company carried out overseas operations and they do not qualify as reportable segment as operations does not exceeded the thresh hold limit of 10%


Mar 31, 2014

1. The company has only one class of Equity shares having a par value of Rs,10/- each. Each holder of equity share is entitled to one vote per share on poll and have one vote on show of hands.

The company declares and pays dividends as proposed by the Board of directors and is subject to approval of the shareholders in the ensuing Annual general meeting. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company in proportion to their shareholding after distribution of payments to preferential creditors.

2. As per the terms of the agreement, one of the debenture holders, India Business Excellence Fund exercised their option of conversion of 375 Debentures, Whereby 1,87,500 equity shares of - 10 each were allotted at a premium of - 190 each.

3. The company is not a subsidiary company to any of the company. The company had 2 subsidiary companies Hydro Magus Pvt. Limited and Power Mech Industry Pvt. Ltd. None of the shares of the company are held by its subsidiary companies. Power Mech Overseas Projects FZE, Sharjah which was a subsidiary company was closed on 9th December, 2013.

5. Aggregate number of bonus shares issued during the period of 5 years immediately preceding the reporting date:

During the Financial Year 2008-09, the company had allotted 30,00,000 equity shares as fully paid up bonus shares by capitalizing part of General Reserves.

Note:

a) The term loans from banks and companies are secured by way of hypothecation of assets funded under the said facility. Further, the loans are guaranteed by Managing Director and a Director in their personal capacities.

b) The above loans carries interest varies from 7.5 % to 12.75%

c) The above loans are repayable in monthly/quarterly installments.

d) The non-current portion of above term loans are repayable in following manner.

Banks: 2015-16-8,85,61,781/- 2016-17 --4,65,44,223/- and 2017-18 - 1,83,54,117/- Companies: 2015-16 -- 68,17,443/-.

e) No defaults were made in repayment of above term loans.

Note:

a) Working capital loans from SBH, Standard Chartered bank, SBI and ICICI bank are secured by way of first charge on entire current assets of the company on paripassu basis. Further these loans are secured by way of first charge on fixed assets both present and future, excluding those assets against which charge was given to equipment financiers.

The said loans are collaterally secured by way of equitable mortgage of immovable properties belonging to the company, Managing Director, Director and a firm.

b) Bill Discounting facilities with Citi Bank is secured by way of first charge on pari-passu basis on inventories and book debts of the company.

c) Overdraft facility from banks is secured against fixed deposits with banks.

d) All the above loans are guaranteed by Managing Director and a director in their personal capacities.

Note: The company has no information about the status of its creditors to identify their status under Micro, Small and Medium Enterprises Development Act,2006. Consequently, the disclosure requirements u/s 22 of the said Act has not been made.

* Represents dividend for the financial year 2010-11, 2011-12 and 2012-13.

Note:

1) All the above fixed deposits had original maturity period of 12 months and above. Further, of the above, fixed deposits of -49,20,59,329/- falls due for maturity within 12 months from the date of balance sheet.

2) None of the above fixed deposits had original maturity period of less than 3 months that meet the definition of cash and cash equivalents as defined under AS-3 'Cash flow statements'.

1. Particulars disclosed pursuant to AS-18 'Related party transactions'

A) i) Key Managerial personnel S. Kishore Babu, Chairman and Managing director

ii) Relatives of Key Managerial personnel S. Lakshmi - Director W/o S. Kishore Babu S. Rohit S/o S. Kishore Babu S. Vignatha D/o S. Kishore Babu S. Kishore Babu (HUF)

iii) Companies controlled by KMP/ Relatives of KMP Power Mech Infra Limited

iv) Subsidiary companies - Power Mech Overseas Projects FZE, Sharjah (Winding up during the year)

- Hydro Magus Private Limited, Gaziabad

- Power Mech Industry Private Limited, NOIDA

2. In the opinion of the management, current assets, loans and advances have a value on realization in the ordinary course of business equal to the value at which they are stated. Balances in some of the parties account are subject to confirmation and reconciliation.

3. The company has claimed an amount of- 6,92,27,365/- (Previous Year- 4,27,36,420/-) being the Works contract tax deducted by the customers and outstanding as on 31.03.14 in respect of works carried out in some of the states. The company's management is of opinion that there is no sales tax liability in respect of the said works carried out and hence claimed as refund due and grouped under loans and advances. Sales tax liability, if any has arisen, on completion of assessments will be charged to Profit and Loss account.

4. Segment reporting

During the financial year 2013-14, the company operates only in one segment i.e in construction activities. This, in the context of Accounting standard-17 'Segment reporting' as specified in the Companies (Accounting Standards) Rules, 2006 is considered to constitute one single primary segment. The company carried out overseas operations and they do not qualify as reportable segment as operations does not exceeded the thresh hold limit of 10% specified in paragraph no.27 of AS-17.

5. Previous year figures have been regrouped wherever necessary to confirm to current year classification.

 
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