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Notes to Accounts of Power Mech Projects Ltd.

Mar 31, 2023

The average credit period is 30 days which is due from the date of certification of RA Bill. No interest is charged on overdue receivables.

Of the trade receivables balance, ''209.63 Cr (as at March 31,2022: ''166.15 Cr) is due from one of the Company''s largest customer. Further, an amount of ''238.02 Cr (as at March 31,2022 : ''87.48 Cr) is due from customers who represent more than 5% of the total balance of trade receivables.

In determining the provision for trade receivables, the company has used practical expedients based on the financial conditions of the customer, historical experience of collections from customers, possible outcome of negotiations with customers etc,. The concentration of risk with respect to trade receivables is reasonably low as most of the receivables are from Government organisations, high profile and net worth companies though there may be normal delay in collection. The company has provided expected credit loss allowance based on provision matrix applied on the ageing of receivables which are due with estimated loss rates.

Rights, Preferences and restrictions attached to Equity shares

The Company has only one class of Equity shares having a face value of ''10/- each. Each holder of equity share is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to approval of share holders in the Annual General Meeting. In the event of liquidation of Company, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the share holders

The Company is not a subsidiary Company to any of the Company. The Company had 8 Indian subsidiary Companies Hydro Magus Private Limited, Power Mech Industri Private Limited, Power Mech BSCPL Consortium Private Limited, Aashm Avenues Private Limited, Power Mech SSA Structures Private Limited, Power Mech Environmental Protection Private Limited, Energy Advisory and Consulting Services Private Limited and KBP Mining Private Limited and 2 foreign subsidiary companies Power Mech Projects (BR )FZE and Power Mech Projects Limited LLC. None of the shares of the Company are held by its subsidiary Companies.

The Company had 11 Indian Joint venture''s M/S POWER MECH-M/S ACPL JV, PMPL-STS JV, PMPL-KHILARI Consortium JV, PMPL-SRC INFRA JV(Mizoram), PMPL-SRC INFRA JV(Hassan), PMPL-BRCC INFRA JV, PMPL-PIA JV, PMPL-KVRECPL Consortium JV, RITES-PMPL JV, SCPL-PMPL JV, POWER MECH-TAIKISHA JV and 2 foreign Joint venture Companies GTA Power Mech Nigeria Limited and GTA Power Mech DMCC. None of the shares of the Company are held by its joint venture Companies.

The Company also had 1 Foreign Associate company MAS Power Mech Arabia. None of the shares of the Company are held by its associate Company.

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

No Bonus shares were issued during the period of five immediately preceeding financial Years.

No shares were issued pursuant to a contract without payment being received in cash.

Nature of reserves:

a) Securities premium

Securities premium represents premium received on issue/conversion of shares. The reserve is utilised in accordance with the provisions of section 52 of Companies Act, 2013.

b) General reserve

The general reserve is created by way of transfer of part of the profits before declaring dividend pursuant to the provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

c) Retained Earnings:

Retained earnings are the profits that the company has earned till date less transfers to general reserves and dividends paid to share holders.

1) 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.

2) The above loans carries interest varies from 7.35 % to 12.50 %

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

4) Maturity pattern of above term loans ( Non Current ) is as follows.

Banks : 2024-25 - '' 10.51 ; 2025-26 - '' 4.39 ; 2026-27 - '' 0.33 & 2027-28 - '' 0.08 Companies : 2024-25 - '' 5.82 & 2025-26 -'' 0.93

5) Registration, Modification and Satisfaction of charges relating to the new loans taken during the year, had been filed with the Registrar of Companies, within the prescribed time or within the extended time requiring the payment of additional fees except for the term loans bearing sanction amount of '' 0.66 Cr and outstanding balance of '' 0.65 Cr as at 31.03.2023 for which no charge was registered and term loans bearing sanction amount of '' 0.27 Cr and outstanding balance of '' Nil as at 31.03.2023 for which no satisfaction of charge was filed.

6) No defaults were made in repayment of above term loans

EMPLOYEE BENEFITS

a. Defined contribution plans

The Company makes Provident Fund and Employees'' State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. The Company recognised '' 28.23 Cr (Year ended March 31,2022: '' 18.90 Cr) for provident fund contributions, and '' 3.66 Cr (Year ended March 31, 2022: '' 1.85 Cr) towards Employees'' State Insurance Scheme contributions in the Statement of Profit and Loss.

b. Defined benefit plans

The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.

These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Risk Management:

Investment risk - The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Interest rate risk - The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Longevity risk - The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk - The present value of the defined benefit plan is calculated with reference to the future salaries of participants under the plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.

a) Working capital loans from all the banks 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) Overdraft facility from banks is secured against fixed deposits with banks.

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

d) The above loans carries interest varies from 7.97% to 10.65%.

e) Registration, Modification and Satisfaction of charges relating to the loans sanctioned / renewed during the year under review, had been filed with the Registrar of Companies, within the prescribed time or within the extended time along with the payment of additional fees.

f) The company has availed working capital facilities against security of current assets. The revised quarterly returns and statements comprising stock statements, payables and receivables (including retention and security deposit amounts) filed by the company with the banks subsequent to the quarterly review of accounts are in agreement with the unaudited books of the company of the respective quarters and no material discrepancies have been noticed.

g) The company has not declared as willful defaulter by any of the bank or any other institution.

The categories used are as follows:

Level 1: Quoted prices for identified instruments in an active market.

Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data.

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at the fair value at the end of each reporting period.

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables, trade payables and short term borrowings at carrying value because their carrying amounts approximate the fair value because of their short term nature. Difference between carrying amounts and fair values of long term borrowings, other financial assets and financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.

Financial Risk Management Note: 34

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, trade and other receivables.

The Company''s business activities are exposed to a variety of financial risks namely credit risk, liquidity risk and foreign currency risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Board of Directors of the Company.

A. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. Credit risk encompasses both the direct risk of default and the risk of deterioration of credit worthiness. Credit risk is controlled by monitoring and interaction with the customers on a continuous basis.

Financial instruments that are subject to concentration of credit risk principally consists of trade receivables, retentions, deposits with customers and unbilled revenue.

Receivables from customers

Concentration of credit risk with respect to trade receivables are limited since major customers of the company are from public sector and accounts for more than 39% of its trade receivables. All trade receivables are reviewed and assessed for default on a monthly basis. On historical experience of collecting receivables credit risk is low.

Other financial assets

The Company maintains exposure in cash and cash equivalents, term deposits with banks held as margin money against guarantees and retention money and security deposits with customers which are to be released on fulfillment of conditions as specified in the work orders.

The Company''s maximum exposure of credit risk as at March 31,2023, March 31, 2022 is the carrying value of each class of financial assets.

B. Foreign currency risk management

Foreign currency risk is the risk that the Fair value or Future cashflows of an exposure will fluctuate due to changes in foreign currency rates. Exposures can arise on account of various assets and liabilities which are denominated in currencies other than Indian rupee. The Company has not entered in to any forward exchange contract to hedge against currency risk.

The company does not have any risk of currency fluctuation since it''s entire liability in foreign currency is covered by its receivables.

The unhedged exposures are naturally hedged by future foreign currency earnings linked to foreign currency.

The uncovered amount if any, is subject to foreign currency fluctuations.

C. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has availed credit limits with banks. The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31,2023 and March 31, 2022. Cash flow from operating activities provides the funds to service the financial liabilities on a day to day basis.

The Company regularly maintains the rolling forecasts to ensure that it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits.

The company is repaying its borrowings as per the schedule of repayment and no amount was pending for remittance beyond its due date.

In case of borrowings from banks, the maturity pattern has been given under Note no. 15.

D. Capital Management

Equity share capital and other equity are considered for the purpose of Company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on Management''s judgment of its strategic day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary, adjust its capital structure.

The following table summarises the capital of the company.

Particulars

As at

31st March, 2023

As at

31st March, 2022

Equity

1,226.44

993.60

Short Term Borrowings

404.57

424.69

Long Term Borrowings (including Current maturities of Long term debt)

69.42

82.45

Cash and Cash Equivalents (including other bank balances)

(225.45)

(204.99)

Net Debt

248.54

302.15

Total Capital (Equity Net Debt)

1,474.98

1,295.75

Gearing Ratio (Net Debt / Equity)

20.27%

30.41%

Note

Particulars

31.03.2023

31.03.2022

35

Contingent Liabilities and Commitments

A.

Contingent Liabilities

a) Claims against the company not acknowledged as debts

VAT

1.80

1.80

Goods & Service Tax (GST)

8.28

-

b) Other contingent liabilities

-

-

B.

Commitments

Estimated amount of contracts remaining to be executed on

capital account and not provided for

4.24

2.17

Note

Particulars

31.03.2023

31.03.2022

36

Guarantees given by the company''s bankers and outstanding. The said guarantees were covered by way of pledge of Fixed Deposit receipts with the bankers.

1,221.45

1,017.44

37

CIF value of Imports made by the company during the year

a) Consumables & Spare parts

0.06

0.29

b) Capital goods

4.61

2.71

38

Earnings in foreign currency

Abu Dhabi

119.52

84.39

Bangladesh

203.75

266.54

Nigeria

14.43

14.50

Sharjah

10.45

1.03

b) Dividend from foreign subsidiaries

Power Mech projects (BR) FZE

-

15.58

39

Expenditure in foreign currency

a) Expenditure on contracts executed outside India (Including Consumables and Spares)

Abu Dhabi

105.87

79.16

Bangladesh

176.77

181.07

Kuwait

0.49

0.17

Shuqaiq

4.34

0.58

Libya

0.02

-

Sharjah

7.56

1.04

b) Foreign travel

0.05

0.01

42. Balances with all the customers and suppliers accounts are subject to confirmation and reconciliation.43. Segment reporting:

Business Segment : The company prodominently operates only in construction and maintenance activities. This in the context of IND AS -108” "Operating Segments" "is considered to constitute only one business segment."

Geographical Segment: The Company has operations within India and outside India and as per ind as 108 - "operating segment”, the Segment information has been presented under the notes to consolidated financial statements.

C) Reconciling the amount of revenue recognized in the statement of profit and loss with the contracted price :

There is no difference in the contract price negotiated and the revenue recognized in the statement of profit and loss for the current year. There is no significant revenue recongnized in the current year from performance obligations satisfied in the previous periods.

D) Performance obiligation :

The transaction price allocated to the remaining performance obligations is ''13,578 Cr which will be recognized as revenue over the respective project durations. Generally the project duration of contracts with customers will be 1-3 years.

48. Dividend:

The board of Directors at its meeting held on 26.05.2023 have recommended a final dividend of ''2.00/- each per share of face value of ''10/- each for the financial year ended 31st March, 2023. The above is subject to approval at the ensuing Annual General Meeting of the Company and hence not recognised as a liability.

50. Other disclosures: Additional regulatory and other information as required by the Schedule III to the Companies Act 2013

(a) Relationship with Struck off Companies

The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.

(b) Compliance with number of layers of companies

The Company do not have any parent company and accordingly, compliance with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable for the year under consideration.

(c) Scheme of arrangements

There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the year.

(d) Advance or loan or investment to intermediaries and receipt of funds from intermediaries

The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The company has also not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(e) Undisclosed Income

The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.

(f) Details of Crypto Currency or Virtual Currency

The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence, disclosures relating to it are not applicable.

51. The Income-Tax Department had carried out a search operation at the Company''s various business premises, under Section 132 of the Income-tax Act, 1961 in the month of July, 2022. The Company has extended full cooperation to the Income-tax officials during the search and provided all the information sought by them. As on the date of Balance sheet, the Company has not received any formal communication or notices for filing returns of income from the Income-tax department. Management is of the view that this will not have any impact on the Company''s financial position as at March 31,2023 and the performance for the year ended on that date and hence no provision for any liability has been recognized in the financial results.

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


Mar 31, 2021

(i) The mode of valuation of inventories has been stated in Note 3(h) in Accounting Policies.

(ii) The cost of inventories recognised as an expense for the year ended 31st March, 2021 was ''.249.71 Cr (for the year ended 31st March, 2020: ''. 297.42 Cr)

(iii) AH the above inventories are offered as security in respect of working capital loans availed by the company from all the banks.

(iv) There are no inventories expected to be liquidated after more than twelve months.

a) The average credit period is 30 days which is due from the date of certification of RA Bill. No interest is charged on overdue receivables.

b) Of the trade receivables balance, ''. 95.06 Cr (as at 31st March, 2020 : ''. 137.09 Cr ) is due from one of the Company''s largest customer. Further, an amount of ''.25.73 Cr (as at 31st March, 2020 : ''. Nil ) is due from customers who represent more than 5% of the total balance of trade receivables.

c) In determining the provision for trade receivables, the company has used practical expedients based on the financial conditions of the customer, historical experience of collections from customers, possible outcome of negotiations with customers etc., The concentration of risk with respect to trade receivables is reasonably low as most of the receivables are from the Government organisations, high profile and net worth companies though there may be normal delay in collection. The expected credit loss allowance is based on the estimates by the management about their recoverability.

c) Rights, Preferences and restrictions attached to Equity shares

The Company has only one class of Equity shares having a face value of '' 10/- each. Each holder of equity share is entitled to one vote per share held. In the event of liquidation of Company, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the share holders

e) The Company is not a subsidiary Company to any of the Company. The Company had 6 Indian subsidiary companies Hydro Magus Private Limited, Power Mech Industri Private Limited, Power Mech BSCPL Consortium Private Limited, Aashm Avenues Private Limited, Power Mech SSA Structures Private Limited and Power Mech Environmental Protection Private Limited and 2 foreign subsidiary companies Power Mech Projects (BR )FZE and Power Mech Projects Limited LLC. None of the shares of the Company are held by its subsidiary companies.

The Company had 5 Indian Joint venture companies M/S POWER MECH-M/S ACPL JV, PMPL-STS JV, PMPL-KHILARI Consortium JV, PMPL-SRC INFRA JV(Mizoram), PMPL-SRC INFRA JV(Hassan), PMPL-BRCC INFRA JV and 2 foreign Joint venture companies GTA Power Mech Nigeria Limited and GTA Power Mech DMCC. None of the shares of the company are held by its joint venture companies. The company also had 1 Foreign Associate company MAS Power Mech Arabia. None of the shares of the company are held by its associate company.

f) Aggregate number of bonus shares issued during the period of 5 years immediately preceding the reporting date: No Bonus shares were issued during the period of five immediately preceeding FYs.

g) No shares were issued pursuant to a contract without payment being received in cash.

a) Securities premium

Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of section 52 of Companies Act, 2013.

b) General reserve

The general reserve is created by way of tranfer of part of the profits before declaring dividend pursuant to the provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

c) Retained Earnings:

Retained earnings are the profits that the company has earned till date less transfers to general reserves and dividends paid to share holders.

1) 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.

2) The above loans carries interest varies from 1.49 % to 12.50 %.

3) The above loans are repayable in monthly/quarterly instalments.

4) Maturity pattern of above term loans ( Non Current ) is as follows.

Banks : 2022-23 - ''.10.30 Cr & 2023-24 - ''.3.00 Cr Companies : 2022-23 - ''. 1.68 Cr & 2023-24 - ''.0.86 Cr

5) No defaults were made in repayment of above term loans

a. Defined contribution plans

The Company makes Provident Fund and Employees'' State Insurance Scheme contributions which are defined contribution plans, for qualifying employees.

The Company recognised ''.12.68 Cr (Year ended 31st March, 2020: ''. 11.18 Cr) for provident fund contributions, and ''.1.12 Cr (Year ended 31st March, 2020: ''.1.02 Cr) towards Employees'' State Insurance Scheme contributions in the Statement of Profit and Loss.

b. Defined benefit plans

The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.

These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Risk Management:

Investment risk - The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Interest rate risk - The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Longevity risk - The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk - The present value of the defined benefit plan is calculated with reference to the future salaries of participants under the plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.

(vii) Sensitivity analysis :

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and employee turnover. The sensitivity analysis below have been determined based on the reasonably possible changes of the assumptions occuring at the end of the reporting period and may not be representative of the acutal change. It is based on a change in key assumption while holding all other assumptions constant. The result of sensitivity analysis is given below.

a) Working capital loans from State Bank of India, Standard Chartered bank, Axis bank, IDFC First bank, Ratnakar ban Punjab National bank, Bank of India, IndusInd bank, Union Bank of India, Bank of Baroda, UCO bank, Central bank of Ind are secured by way of first charge on entire current assets of the company on pari passu basis. Further these loans a secured by way of first charge on fixed assets both present and future, excluding those assets against which charge w; given to equipment financiers.

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

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

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

d) The above loans carries interest varies from 7.30% to 10.30%.

The fair value of financial instruments as referred to above note have been classified into three categories depending on the inputs used in the valuation technique.The hierarchy gives the highest priority to quoted prices in active markets for identified assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]

The categories used are as follows:

Level 1: Quoted prices for identified instruments in an active market.

Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data.

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at the fair value at the end of each reporting period.

The following table gives information about how the fair value of these financial assets and financial liabilities are determined (in particular, the valuation technique and other inputs used).

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables, trade payables and short term borrowings at carrying value because their carrying amounts approximate the fair value because of their short term nature. Difference between carrying amounts and fair values of long term borrowings, other financial assets and financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.

NOTE 3^ FINANCIAL RISK MANAGEMENT

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, trade and other receivables.

The Company''s business activities are exposed to a variety of financial risks namely credit risk, liquidity risk and foreign currency risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Board of Directors of the Company.

A. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. Credit risk encompasses both the direct risk of default and the risk of deterioration of credit worthiness. Credit risk is controlled by monitoring and interaction with the customers on a continous basis.

Financial instruments that are subject to concentration of credit risk principally consists of trade receivables, retentions, deposits with customers and unbilled revenue.

Receivables from customers

Concentration of credit risk with respect to trade receivables are limited since major customers of the company are from public sector and accounts for more than 48% of its trade receivables. All trade receivables are reviewed and assessed for default on a monthly basis. On historical experience of collecting receivables credit risk is low.

Other financial assets

The Company maintains exposure in cash and cash equivalents, term deposits with banks held as margin money against guarantees and retention money and security deposits with customers which are to be released on fulfillment of conditions as specified in the work orders.

The Company''s maximum exposure of credit risk as at 31st March, 2021, 31st March, 2020 is the carrying value of each class of financial assets.

B. Foreign currency risk management

Foreign currency risk is the risk that the Fair value or Future cashflows of an exposure will fluctuate due to changes in foreign currency rates. Exposures can arise on account of various assets and liabilities which are denominated in currencies other than Indian rupee. The Company has not entered in to any forward exchange contract to hedge against currency risk.

The company does not have any risk of currency fluctuation since it''s entire liability in foregin currency is covered by its receivables.

The unhedged exposures are naturally hedged by future foreign currency earnings linked to foreign currency.

The uncovered amount if any, is subject to foreign currency fluctuations.

C. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has availed credit limits with banks. The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2021 and 31st March, 2020. Cash flow from operating activities provides the funds to service the financial liabilities on a day to day basis.

The Company regularly maintains the rolling forecasts to ensure that it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits.

The company is repaying its borrowings as per the schedule of repayment and no amount was pending for remittance beyond its due date.

All the amounts due to trade payables falls due within one year and the company is able to meet its obligations within the due dates.

In case of borrowings from banks, the maturity pattern has been given under Note no. 15.

D. Capital Management

Equity share capital and other equity are considered for the purpose of Company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on Management''s judgment of its strategic day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary, adjust its capital structure.

Balances with some of the customers and suppliers accounts are subject to confirmation and reconciliation.

The company has claimed an amount of ''.1.90 Cr (As on 31st March, 2020 ''. 1.11 Cr) being the Works contract tax deducted by the customers under local sales tax laws and outstanding as on 31st March, 2021 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 other current assets . Sales tax liability, if any has arisen, on completion of assessments will be charged to Profit and Loss account.

NOTE 4^ SEGMENT REPORTING

Business Segment : The company prodominently operates only in construction and maintenance activities. This in the context of IND AS - 108 "Operating Segments " is considered to constitute only one business segment.

Geographical Segment: The Company has operations within India and outside India and as per ind as 108 - "operating segment", the Segment information has been presented under the notes to consolidated financial statements.

NOTE 46 LEASES

The Company has adopted Ind AS 116 ''Leases'' effective April 1, 2019 and applied the Standard to its leases. Ind AS 116 replaces Ind AS 17 - Leases and related interpretation and guidance. The Company has applied Ind AS 116 using the modified retrospective approach, Right-of-use assets at April 1, 2019 for leases previously classified as operating leases were recognised and measured at an amount equal to the lease liability (adjusted for any prepayments/accruals). As a result, the comparative information has not been restated. The Company has discounted lease payments using the incremental borrowing rate as at April 1, 2019 for measuring lease liability. In respect of leases, previously classified as finance leases, the right-of-use asset was measured at the carrying amounts of the related finance lease asset and re-classified.

On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-of-use asset, and finance cost for interest accrued on lease liability.

Accordingly, on transition to Ind AS 116, the Company recognised right-of-use assets amounting to ''.9.72 Cr (including previously classified as finance lease) and a lease liability of ''.9.39 Cr.

The Ministry of Home Affairs vide order no. 40-3/2020-DM-I(A) dated March 24, 2020 announced a nationwide lockdown as a measure to contain the spread of COVID 19 which was declared a global pandemic by the World Health Organisation. Owing to the lockdown, the operations of the Company were impacted due to shutting down of all plants and offices. The Company has resumed operations in a phased manner as per directives issued by the Government and is closely monitoring the impact of the pandemic on all aspects of its business. The Company is taking appropriate measures to ensure the safety and well-being of all its employees and ensuring full compliance with the directives issued by the Government in this regard.

The lockdown so imposed by the Govt of india impacted significantly the companies operations during part of the year. However the company recovered during the last 2 quarters of FY from the econmic effects caused by shutdown because of Covid-19 and works at major sites are progressing well.

Though the company recovered from economic effects, the company continue to monitor possible effects which may further result from second wave of Covid-19 pandemic on carrying value of property plant & equipment, receivables (including retention money & security deposits), Advances to vendors & other assets.

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


Mar 31, 2018

Note No.31 STANDARDS ISSUED BUT NOT EFFECTIVE

On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendments to existing Ind AS. These amendments shall be applicable to the company from April 01, 2018.

a) Issue of Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 will supersede the current revenue recognition standard Ind AS-18 Revenue, Ind AS-11 Construction Contracts and the related interpretations. Ind AS-115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.

b) Amendment to Existing Ind AS

The MCA has also carried out amendments in some of the existing standards but application of said standards are not expected to have any significant impact on the Company''s Financial Statements.

Note:

i) The mode of valuation of inventories has been stated in Note 2(h) in Accounting Policies.

ii) The cost of inventories recognised as an expense for the year ended 31st March, 2018 was Rs. 167,40,80,007 /- (for the year ended 31st March, 2017: Rs. 114,56,06,140/-)

iii) All the above inventories are offered as security in respect of working capital loans availed by the company from all the banks.

iv) There are no inventories expected to be recovered after more than twelve months.

a) The average credit period is 30 days which is due from the date of certification of RA Bill. No interest is charged on overdue receivables.

b) Of the trade receivables balance, Rs. 100.96 crores (as at March 31, 2017: Rs. 89.11 crores) is due from one of the Company''s largest customer. Further, an amount of Rs.34.81 Crores (as at March 31, 2017: Rs. 22.22Crores) is due from customers who represent more than 5% of the total balance of trade receivables.

c) In determining the provision for trade receivables, the company has used practical expedients based on the financial conditions of the customer, historical experience of collections from customers, possible outcome of negotiations with customers etc., The concentration of risk with respect to trade receivables is reasonably low as most of the receivables are from Government organisations, high profile and net worth companies though there may be normal delay in collection. Considering the above factors and outcome of negotiations, the management is of view that no provision for expected credit loss is required to be made.

Rights, Preferences and restrictions attached to Equity shares

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 dividend proposed by the Board of Directors is subject to approval of share holders in the Annual General Meeting. In the event of liquidation of Company, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the share holders

The Company is not a subsidiary Company to any of the Company. The Company had 3 Indian subsidiary companies Hydro Magus Private Limited, Power Mech Industri Private Limited and Power Mech BSCPL Consortium Private Limited and 2 foreign subsidiary companies MAS Power Mech Arabia and Power Mech Projects Limited LLC. None of the shares of the Company are held by its subsidiary companies.

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.

No shares were issued pursuant to a contract without payment being received in cash.

Nature of reserves:

a) Securities premium:

Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of Companies Act, 2013.

b) General reserve:

The general reserve is created by way of tranfer of part of the profits before declaring dividend pursuant to the provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

c) Retained Earnings:

Retained earnings are the profits that the company has earned till date less transfers to general reserves and dividends paid to shareholders.

1) 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.

2) The above loans carries interest varies from 1.51% to 12.26%

3) The above loans are repayable in monthly / quarterly instalments.

4) Maturity pattern of above term loans (Non-Current) is as follows.

Banks : 2019-20 - Rs. 7,30,35,143 & 2020-21 - Rs. 4,14,64,408 & 2021-2022 - Rs.2,31,318

Companies : 2019-20 - Rs. 8,29,74,848 & 2020-21 - Rs. 3,15,54,887

5) No defaults were made in repayment of above term loans

EMPLOYEE BENEFITS

a. Defined contribution plans

The Company makes Provident Fund and Employees'' State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. The Company recognised Rs. 8.20 crores (Year ended March 31, 2017: Rs. 7.47 crores) for provident fund contributions, and Rs. 0.95 crores (Year ended March 31, 2017: Rs. 0.34 crores) towards Employees'' State Insurance Scheme contributions in the Statement of Profit and Loss.

b. Defined benefit plans

The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.

Note:

(i) The company received government grants in the nature of export incentives and the same is utilised against import of Capital goods and capitalised to Property, Plant and Equipment.

The deferred government grant will be recognised in statement of profit and loss over the period in proportion to the depreciation expense on the assets to which such grant is utilized is recognised.

(ii) The segregation of mobilisation advances received from customers has been made based on the estimated work to be completed in next year and as per the terms of agreement entered with customers, turnover, terms of release of amount and estimates of the management.

Note:

a) Working capital loans from SBI, Standard Chartered bank, ICICI, Axis, IDFC 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) Overdraft facility from banks is secured against fixed deposits with banks.

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

This note provides information about how the Company determines fair values of various financial assets and financial liabilities. Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at the fair value at the end of each reporting period.

The following table gives information about how the fair value of these financial assets and financial liabilities are determined (in particular, the valuation technique and other inputs used).

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables, trade payables and short term borrowings at carrying value because their carrying amounts approximate the fair value because of their short term nature. Difference between carrying amounts and fair values of bank borrowings, other financial assets and financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.

Note No.2: FINANCIAL RISK MANAGEMENT

The Company financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company financial assets comprise mainly of investments, cash and cash equivalents, trade and other receivables.

The Company''s business activities are exposed to a variety of financial risks namely credit risk, liquidity risk and foreign currency risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Board of Directors of the Company.

A. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. Credit risk encompasses of both the direct risk of default and the risk of deterioration of credit worthiness. Credit risk is controlled by monitoring and interaction with the customers on a continuous basis.

Financial instruments that are subject to concentrations of credit risk principally consists of trade receivables, retentions, deposits with customers and unbilled revenue.

Receivables from customers

Concentration of credit risk with respect to trade receivables are limited since major customers of the company are from public sector and accounts more than 35% of its trade receivables. All trade receivables are reviewed and assessed for default on a monthly basis. On historical experience of collecting receivables credit risk is low.

The company does not have any risk of currency fluctuation since it''s entire liability in foregin currency is covered by its receivables

The unhedged exposures are naturally hedged by future foreign currency earnings linked to foreign currency.

The uncovered amount if any, is subject to foreign currency fluctuations.

C. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has availed credit limits with banks. The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2018 and March 31, 2017. Cash flow from operating activities provides the funds to service the financial liabilities on a day to day basis.

The Company regularly maintains the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits.

The company is repaying its borrowings as per the schedule of repayment and no amount was pending for remittance beyond its due date.

All the amounts due to trade payables falls due within one year and the company is able to meet its obligations within the due dates.

In case of borrowings from banks, the maturity pattern has been given under Note no. 15.

D. Capital Management

Equity share capital and other equity are considered for the purpose of Company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on Management''s judgment of its strategic day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or is necessary, adjust its capital structure.

Note No.3: PARTICULARS DISCLOSED PURSUANT TO IND AS-24 -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. Kishore Babu (HUF)

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

Bombay Avenue Developers Private Limited True Rrav Marketing Private Limited Power Mech Foundation Lakshmi Agro Farms

iv) Subsidiary companies Hydro Magus Private Limited

Power Mech Industri Private Limited

Power Mech Projects Limited LLC

MAS Power Mech Arabia

Power Mech BSCPL Consortium Private Limited

v) Joint Venture Power Mech - CPNED Services (HonKong) Holding Co. Limited *

GTA Power Mech Nigeria Limited

* The company has withdrawn it''s investment in joint venture company during the financial year 2017-18

42 Balances with customers and some of the suppliers accounts are subject to confirmation and reconciliation.

43 The company has claimed an amount of Rs.6,35,30,371/- (As on 31.03.2017 Rs. 7,07,57,990/-) being the Works contract tax deducted by the customers under local sales tax laws and outstanding as on 31.03.18 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 other current assets. Sales tax liability, if any has arisen, on completion of assessments will be charged to Profit and Loss account.

4 SEGMENT REPORTING:

Business Segment: The company predominantly operates only in construction and maintenance activities. This in the context of IND AS - 108 -Operating Segments- is considered to constitute only one business segment.

Geographical Segment: The Company has operations within India and outside India and as per ind as 108 - -operating segment-, the Segment information has been presented under the notes to consolidated financial statements.

5 DIVIDEND:

The board of Directors at its meeting held on 25.05.2018 have recommended a dividend of Rs. 1/- each per share of face value of Rs. 10/- each for the financial year ended 31st March, 2018. The above is subject to approval at the ensuing Annual General Meeting of the Company and hence not recognised as a liability.

6 Disclosure as per Regulation 53(f) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015:

(i) Loans and advances in the nature of advances given to Subsidiary/Joint Venture Companies:

(ii) Details of investments made and guarantees given under Section 186 of the Companies Act, 2013 are disclosed in Note 6 and Note 35 respectively.

(iii) All the above loans and guarantees were given for carrying on their business activities.

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


Mar 31, 2017

Note No : 1

1. CORPORATE INFORMATION

Power Mech Projects Limited is incorporated in the year 1999 and is an engineering and construction company providing integrated service in erection, testing and commissioning (ETC) of boilers, turbines and generators and balance of plant (BOP), civil works and operation and maintenance (O&M). The company is undertaking projects of all types, sizes and in all environments in India and abroad which include ultra mega power projects, super critical thermal power projects, sub critical power projects, heat recovery steam generator, waste heat recovery steam generator, circulating fluidized bed combustion steam generator, gas turbine generator, hydro electric plants, maintenance, renovation, modernization and annual maintenance of running plants and complete civil works in India and abroad. Power Mech is now engaged in several power projects ranging from 135MW to 800MW, besides many projects in lower segment also. Thus, Power Mech is proud to be a vital part of India’s Power generation capacity augmentation.

Note No : 2

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

a) Statement of compliance

In accordance with the notification issued by the Ministry of Corporate affairs, the company has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 w.e.f 1st April, 2016. Previous periods financial statements have been restated to Ind AS. In accordance with Ind AS 101 “First time adoption of Indian Accounting Standards”, the company has presented a reconciliation from the presentation of financial statements under Accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”) to Ind AS of Shareholders’ equity as at 1st April, 2015 and 31st March, 2016 and Statement of Profit & Loss for the year ended 31st March, 2016. These financial statements have been prepared in accordance with Ind AS as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

b) Basis of measurement

These financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under historical cost convention on accrual basis of accounting except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (‘the Act’) (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Accounting policies have been consistently applied except a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

c) Use of estimates and Judgements

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require adjustment to the carrying amount of assets or liabilities affected in future periods. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The following are the critical judgements and estimates that have been made in the process of applying the company’s accounting policies that have the most significant effect on the amounts recognized in the financial statements.

i) Depreciation / amortisation and useful lives of property plant and equipment / intangible assets:

Property, plant and equipment / intangible assets are depreciated/amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company’s historical experience with similar assets and take into account anticipated technological changes. The depreciation/amortisation for future periods is revised if there are significant changes from previous estimates.

ii) Recoverability of trade receivable:

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, past history of receivables, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

iii) Fair value measurement of financial instruments:

Some of the Company’s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or liability, the Company uses market-observable data to the extent available. Where Level 1 inputs are not available, the fair value is measured using valuation techniques, including the discounted cash flow model, which involves various judgments and assumptions. The Company also engages third party qualified valuers to perform the valuation in certain cases. The appropriateness of valuation techniques and inputs to the valuation model are reviewed by the Management.

iv) Provisions:

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

v) Impairment of non-financial assets:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Units (CGU’s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.

vi) Impairment of financial assets:

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

vii) Income Taxes:

The Company’s tax jurisdiction is India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/ recovered for uncertain tax positions.

viii) Defined benefit obligations:

The Company uses actuarial assumptions viz., discount rate, mortality rates, salary escalation rate etc., to determine such employee benefit obligations.

ix) Other estimates:

The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by analysing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.

3.1 New standards and interpretations not yet adopted Standards issued but not effective:

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ The amendment relating to Ind AS 7 is applicable to the Company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The effect on the financial statements is being evaluated by the Company.

Note No. 4 : FIRST TIME ADOPTION OF IND AS

The company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effected from 1st April, 2016 with a transition date of 1st April, 2015. These financial statements for the year ended 31st March, 2017 are the first financial statements. For all periods upto and including the year ended 31st March, 2016, the company prepared its financial statements in accordance with the accounting standards notified under section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

The adoption of Ind AS has been carried out in accordance with Ind AS 101, First time adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the company has prepared financial statements which comply with Ind AS for the year ended 31st March, 2017 together with the comparative information as at and for the year ended 31st March, 2016 and the opening Ind AS balance sheet as at 1st April, 2015, the date of transition to Ind AS.

In preparing these Ind AS financial statements, the company has availed certain exemptions and exceptions in accordance with Ind AS 101. The resulting difference between the carrying values of the assets and the liabilities in the financial statements as at the transition date under Ind AS and previous GAAP have been recognized directly in equity.

A. Exceptions from retrospective application

(i) Estimates exception: Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS except where estimates were required by Ind AS and not required by Previous GAAP.

(ii) Classification and measurement of financial assets: The Company has determined the classification of financial assets in terms of whether they meet the amortised cost criteria or the fair value through other comprehensive income criteria based on the facts and circumstances that existed as of the transition date.

(iii) Deemed cost for property, plant and equipment and intangible assets: The Company has elected to continue with carrying value of all its property plant and equipment, and intangible assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

(iv) Investments in subsidiaries, joint ventures and associates: The Company has elected to measure investment in subsidiaries and joint ventures at cost.

B. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

i) Adjustments made by the company in restating the financial statements prepared under previous GAAP, including the balance sheet as at 1st April, 2015 and the financial statements as at and for the year ended 31st March, 2016.

ii) Reconciliation of Equity as at 1st April, 2015 and 31st March, 2016

iii) Reconciliation of Statement of Profit & Loss for the year ended 31st March, 2016

Notes to Reconciliation between previous GAAP and Ind AS

1. Fair Valuation of Investments

Under Previous GAAP, non-current investments are valued at cost less diminution in value other than temporary and under Ind AS they are carried at fair value through OCI.

In case of Investment in subsidiaries and joint ventures, the company has elected to measure the investment at its previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

2. Dividend and Tax on Dividend

Under previous GAAP, dividend payable is recorded as a liability in the period to which it relates and under Ind AS dividend is recognised as a liability in the period in which the obligation to pay is established.

3. Fair Value measurement of Deposits

Under previous GAAP, rental deposits made with tenants are carried at their cost. Under Ind AS, they are measured at their fair value at amortised cost applying the effective rate of interest. The difference between actual amount of deposit and its fair value is shown under prepaid rent and amortised to rental expense over the period of deposit. The interest amount on fair value of deposit is shown as interest income over the period of deposit.

4. Remeasurement of net defined benefit plans

Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of re-measurement of net defined benefit liability which is recognised in other comprehensive income in respective years. However, such a change does not have any effect on total comprehensive income or total equity.

5. Cost of Property, plant and equipment

The company has elected to measure all its property, plant and equipment and intangible assets at the previous GAAP carrying amount as its deemed cost at the date of transition to Ind AS.

During the year ended 31.03.2016, the Company has made an Initial Public Offer (IPO) of 4,269,000 equity shares of Rs.10/- each at a premium of Rs. 630/- per share. The issue comprises of fresh issue of 2,128,000 equity shares and offer for sale of 2,141,000 equity shares by selling share holders

The fresh equity shares were allotted by the Company on 21st August, 2015 and were listed on BSE and NSE.

Rights, Preferences and restrictions attached to Equity shares

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 dividend proposed by the Board of Directors is subject to approval of share holders in the Annual General Meeting, except in the case of interim dividend. In the event of liquidation of Company, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the share holders.

The Company is not a subsidiary Company to any of the Company. The Company had 2 Indian subsidiary companies Hydro Magus Pvt. Limited and Power Mech Industri Pvt. Ltd. and 2 foreign subsidiary companies MAS Power Mech Arabia and Power Mech Projects Limited LLC. None of the shares of the Company are held by its subsidiary companies.

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.

No shares were issued pursuant to a contract without payment being received in cash.

Nature of reserves:

a) Securities premium

Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of Companies Act, 2013.

b) General reserve

The general reserve is created by way of transfer of part of the profits before declaring dividend pursuant to the provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

c) Retained Earnings

Retained earnings are the profits that the company has earned till date less transfers to general reserves and dividends paid to share holders.

1) 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.

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

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

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

Banks: 2018-19 - Rs. 2,86,21,397 & 2019-20 - Rs. 1,59,42,466 Companies: 2018-19 - Rs. 29,19,569

5) No defaults were made in repayment of above term loans

EMPLOYEE BENEFITS

a. Defined contribution plans

The Company makes Provident Fund and Employees’ State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. The Company recognised Rs. 7.47 crores (Year ended March 31, 2016: Rs. 4.48 crores) for provident fund contributions, and Rs. 0.34 crores (Year ended March 31, 2016: Rs. 0.36 crores) towards Employees’ State Insurance Scheme contributions in the Statement of Profit and Loss.

b. Defined benefit plans

The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days’ salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.

(i) Balance Sheet

The assets, liabilities and surplus / (deficit) position of the defined benefit plans at the Balance Sheet date were:

(ii) Movements in Present Value of Obligation and Fair Value of Plan Assets

(iii) Statement of Profit and Loss

The charge to the Statement of Profit and Loss comprises:

(iv) Assets

The major categories of plan assets as a % of the total plan assets

Note: In the absence of detailed information regarding the plan assets, which is funded with LIC, the composition of each category of plan assets and experience adjustments on plan assets and liabilities has not been disclosed.

(v) Assumptions

With the objective of presenting the plan assets and plan obligations of the defined benefits plans at their fair value on the Balance Sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

Note: In the absence of detailed information from LIC, the preparation of sensitivity analysis and its impact due to possible change of the respective acturial assumptions occurring at the end of the reporting period and also information on maturity analysis of the benefit payments has not been disclosed.

Note No. 5 : DEFERRED TAX

The following is the analysis of deferred tax assets/(liabilities) presented in the Balance Sheet

Note: The company received government grants in the nature of export incentives. During the year, the company received incentives under SFIS Schemes and same is utilised against import of capital goods and capitalised to Property, plant and equipment.

The deferred government grant will be recognised in statement of profit and loss over the period in proportion in which depreciation expense on the assets is recognised.

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

c) 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 2016-17 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.

Note No. 6 : FAIR VALUE HIERARCHY

The fair value of financial instruments as referred to above note have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identified assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]

The categories used are as follows:

Level 1: Quoted prices for identified instruments in an active market.

Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data.

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company’s financial assets are measured at the fair value at the end of each reporting period.

The following table gives information about how the fair value of these financial assets and financial liabilities are determined (in particular, the valuation technique and other inputs used).

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables, trade payables and Short Term Borrowings at carrying value because their carrying amounts approximate the fair value because of their short term nature. Difference between carrying amounts and fair values of bank borrowings, other financial assets and financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.

Note No. 7 : FINANCIAL RISK MANAGEMENT

The Company’s business activities are exposed to a variety of financial risks namely credit risk, liquidity risk and foreign currency risk. The Company’s senior management has the overall responsibility for establishing and governing the Company’s risk management framework. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also planned before the Board of Directors of the Company.

A. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. Credit risk encompasses of both the direct risk of default and the risk of deterioration of credit worthiness. Credit risk is controlled by monitoring and interaction with the customers on a continuous basis.

Financial instruments that are subject to concentrations of credit risk principally consists of trade receivables, retentions and deposits with customers, unbilled revenue.

Receivables from customers

Concentration of credit risk with respect to trade receivables are limited since major customers of the company are from public sector and accounts more than 30% of its trade receivables. All trade receivables are reviewed and assessed for default on a monthly basis. On historical experience of collecting receivables is that credit risk is low.

The following table gives details in respect of dues from trade receivables including retentions and deposits.

Other financial assets

The Company maintains exposure in cash and cash equivalents, term deposits with banks held as margin money against guarantees and retention money and security deposits with customers which are to be released on fulfillment of conditions as specified in the work orders.

The Company’s maximum exposure of credit risk as at March 31, 2017, March 31, 2016 and April 1, 2015 is the carrying value of each class of financial assets.

B. Foreign currency risk management

a) The company, in addition to its Indian operations, operates outside India through its project centres.

b) The Income and expenditure of the foreign projects are denominated in currencies other than Indian Currency. Accordingly the company enjoys natural hedge in respect of its assets and liabilities of foreign projects. The company’s unhedged foreign currency exposure in respect of these project centres is limited to the net investment(Assets-liabilities) in such operations, the particulars of which are given below.

The unhedged exposures are naturally hedged by future foreign currency earnings and earnings linked to foreign currency. The uncovered amount is subject to foreign currency fluctuations.

C. Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has availed credit limits with banks. The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2017 and March 31, 2016. Cash flow from operating activities provides the funds to service the financial liabilities on a day to day basis.

The Company regularly maintains the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits.

The company is repaying its borrowings as per the schedule of repayment and no amount was pending for remittance beyond its due date.

All the amounts due to trade payables falls due within one year and the company is able to meet its obligations within the due dates.

In case of borrowings from banks, the maturity pattern has been given under Note no. 15.

Capital Management

Equity share capital and other equity are considered for the purpose of Company’s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on Management’s judgment of its strategic day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or is necessary, adjust its capital structure.

8 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.

9 The company has claimed an amount of Rs. 7,07,57,990 (As on 31.03.2016 Rs. 5,76,35,514/-) being the Works contract tax deducted by the customers and outstanding as on 31.03.17 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.

10 Segment reporting

Business Segment : The company predominantly operates only in construction and maintenance activities. This in the context of IND AS -108 “Operating Segments" is considered to constitute only one business segment.

Geographical Segment: The Company has operations within India and outside India and the Segment information is presented in consolidated financial statements.

11 Dividend

The board of Directors at its meeting held on 30.05.2017 have recommended a dividend of Rs. 1/- each per share of face value of Rs. 10/- each for the financial year ended 31st March, 2017. The above is subject to approval at the ensuing Annual General Meeting of the Company and hence not recognised as a liability.

12 Disclosure as per Regulation 53(f) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015:

(i) Loans and advances in the nature of advances given to Subsidiary/Joint Venture Companies:

(ii) Details of investments made and guarantees given under Section 186 of the Companies Act, 2013 are disclosed in Note 6 and Note 35 respectively.

(iii) All the above loans and guarantees were given for carrying on their business activities.

(iv) * Yet to be incorporated as on said date.

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


Mar 31, 2016

1. During the year, the Company has made an Initial Public Offer (IPO) of 4,269,000 equity shares of Rs.10/- each at a premium of Rs. 630/- per share. The issue comprises of fresh issue of 2,128,000 equity shares and offer for sale of 2,141,000 equity shares by selling share holders.

The fresh equity shares were allotted by the Company on 21st August, 2015 and were listed on BSE and NSE.

2. Rights, Preferences and restrictions attached to Equity shares

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 dividend proposed by the Board of Directors is subject to approval of share holders in the Annual General Meeting, except in the case of interim dividend. The Board of Directors by way of circular resolution passed on 18th March, 2016 declared an interim dividend of 10% (Re. 1 per equity share of Rs. 10 each). In the event of liquidation of Company, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the share holders.

4. The Company is not a subsidiary Company to any of the Company. The Company had 2 Indian subsidiary companies Hydro Magus Pvt. Limited and Power Mech Industri 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.

6. 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 capitalizing part of securities premium.

7. No shares were issued pursuant to a contract without payment being received in cash.

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: 2017-18 - Rs. 73,238,061 & 2018-19 - Rs. 5,274,682

Companies: 2017-18 - Rs. 32,057,970 & 2018-19 - Rs. 2,919,569

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

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, Profitability in completion of works, terms of release of amounts and estimates of the management.

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) 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.

8. I n 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.

9. The Company has claimed an amount of Rs. 57,635,514 (As on 31.03.2015 Rs. 53,776,924/-) being the Works contract tax deducted by the customers and outstanding as on 31.03.16 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.

10. Segment reporting

Business Segment :The Company predominantly operates only in construction and maintenance activities. This in the context of Accounting standard-17 ‘Segment Reporting'' is considered to constitute only one business segment.

Geographical Segment: The Company has operations within India and outside India and the Segment information is presented in consolidated financial statements as mentioned in para 4 of AS -17.

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


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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