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Directors Report of Power Mech Projects Ltd.

Mar 31, 2023

The Board of Directors hereby presents the report of the business and operation of your Company along with the audited financial statements (both standalone and consolidated) for the financial year ended 31st March, 2023.

FINANCIAL RESULTS

The financial performance for the current year in comparison to the previous year is as under:

(in Rs. Cr)

Sl

Standalone

Consolidated

No.

Particulars

Current Year (2022-23)

Previous Year (2021-22)

Current Year (2022-23)

Previous Year (2021-22)

1.

Revenue from Operations

3532

2631

3601

2711

2.

Other income

13

26

17

17

3.

Total Income

3545

2657

3618

2728

4.

Expenditure

3135

2360

3197

2425

5.

Profit before interest, depreciation and tax

410

297

421

303

6.

Depreciation

41

34

43

37

7.

Interest and Finance Charges

87

76

90

79

8.

Share of Profit from JV and Associates

-

-

(8)

(2)

9.

Profit before tax

282

187

280

185

10.

Provision for taxes (including DTL)

73

46

73

46

11.

Profit after tax

209

141

207

139

12.

Profit attributable to equity holders of the parent before OCI

209

141

207

139

13.

Other Comprehensive Income

1

1

1

(1)

14.

Total Comprehensive Income

210

142

208

138

15.

Profit attributable to equity holders of parent after OCI

210

142

209

138

16.

Dividend for the year

2.21

-

2.21

-

17.

Reserves (excluding Revaluation reserves)

1212

979

1260

1029

18.

EPS ('') on face value of ''10/- each

141.36

95.82

141.25

94.48

19.

Book Value ('') on face value of ''10/- each share

823

675

855

709

OPERATING RESULTS AND BUSINESS

Your Company has achieved operational turnover of '' 3532 Cr and Profit of '' 209 Cr during the FY 2022-23 as against previous year operational turnover of '' 2631 Cr and Profit of '' 141 Cr respectively.

Further, your Company has achieved consolidated operational turnover of '' 3601 Cr and profit of ''207 Cr for the FY 2022-23 as against previous year operational turnover of ''2711 Cr and Profit of '' 207 Cr respectively.

DIVIDEND

Your Directors are pleased to recommend a final dividend of ''2.00/- per equity share of face value of ''10/- each for the year ended 31st March, 2023. The Final Dividend is subject to the approval of members at the ensuing annual general meeting of the Company to be held on 28th September, 2023.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATES

As on 31st March, 2023 your Company has 10 (Ten) subsidiaries, i.e Hydro Magus Private Limited, Power Mech

Industri Private Limited, Power Mech BSCPL Consortium Private Limited. Power Mech SSA Structures Private

Limited, Aashm Avenues Private Limited, KBP Mining Private Limited, Energy Advisory and Consulting Services

Private Limited, Power Mech Projects LLC (Oman) Power Mech Projects BR FZE (Nigeria) and Power Mech

Environmental Protection Private Limited.

Further there are two Joint Venture Companies i.e GTA Power Mech Nigeria Limited (Nigeria) & GTA Power Mech DMCC (Dubai).

Further, the Company has one associate, MAS Power Mech Arabia.

SUBSIDIARIES

• Hydro Magus Private Limited: Hydro Magus Private Limited is a subsidiary of Power Mech established with a vision to make positive contribution in surging Hydro Power sector in India and neighboring countries. The Company has executed successfully some of the critical hydro projects and is fully geared and aggressively planning for undertaking comprehensive projects.

• Power Mech Industri Private Limited: A wholly-owned subsidiary of Power Mech. It undertakes major job works through its state-of-the-art workshop in Noida. The machines of the workshop are working to full steam, undertaking critical jobs, meeting customers'' satisfaction and proceeding with further expansion in line with the need in the industry.

• Power Mech BSCPL Consortium Private Limited: A Subsidiary Company of Power Mech which was mainly incorporated to undertake the infrastructure development works required for development of medical device Manufacturing Park for Andhra Pradesh Medtech Zone Limited at Vishakhapatnam.

• Power Mech SSA Structures Private Limited: A wholly-owned subsidiary of Power Mech, was established to undertake the project (Package-I) of providing necessary infrastructure viz. furniture and additional class rooms including library rooms & electrical facilities in all Government Schools, KGBVs & Bhavitha buildings under the scheme of Sarva Siksha Abhiyan.

• Aashm Avenues Private Limited: A wholly-owned subsidiary of Power Mech, was established to undertake the project (Package-III) of providing necessary infrastructure viz. furniture and additional class rooms including library rooms & electrical facilities in all Government Schools, KGBVs & Bhavitha buildings under the scheme of Sarva Siksha Abhiyan.

• KBP Mining Private Limited: A Subsidiary Company of Power Mech, incorporated in exploring, design & engineering, developing, operating and working on mines.

• Energy Advisory and Consulting Services Private Limited: A Wholly owned subsidiary of Power Mech, incorporated for providing consulting services to various energy advisory generation Companies, Power Plants, Power Transmitters.

• Power Mech Environmental Protection Private Limited: A Wholly-owned subsidiary of Power Mech, was incorporated to carry on the business providing engineering, technical and consultancy services to power plants and other industrial plants

• Power Mech Projects LLC: A subsidiary company of Power Mech incorporated in Oman to tap the local market of Oman and neighboring countries.

• Power Mech Projects BR FZE: A wholly owned enterprise of Power Mech, incorporated in the Free Zone of Nigeria. JOINT VENTURES

• GTA Power Mech Nigeria Limited: A joint venture of Power Mech is designed to undertake packages in power, infra and process industry sectors including ETC of civil, mechanical and electrical and also O&M of plants. With solid and stable technical backup from the parent Companies, GTA Power Mech is in a position to undertake projects of any magnitude and type in different terrains and weather. The Company has capability to undertake packages in spectrum of activities in projects and plants supported by expert team in respective fields and strategic and technical collaborations from parent companies. The project is being executed by GTA Power Mech FZE, the wholly owned subsidiary of GTA Power Mech Nigeria Limited.

• GTA Power Mech DMCC: A Joint Venture of Power Mech with 50% shareholding, incorporated in Dubai, UAE.

ASSOCIATES

• Mas Power Mech Arabia: An associate Company of Power Mech, established in Saudi Arabia to cater the needs in the Saudi Arabia and surrounding regions for providing services in ETC, Civil and O&M. The Company is equipped to provide services in all the verticals keeping high standards in quality, safety and timeline. The Company draws technical guidance and support from the parent company and it will be an extended arm of Power Mech in providing its skills and expertise in this part of the world.

TRANSFER TO RESERVES

The Board do not propose to transfer any profits to the reserves for the fiscal 2023.

CONSOLIDATED FINANCIAL STATEMENTS

During the year, the Board of Directors reviewed the affairs of the Subsidiaries / JV''s. In accordance with Sub Section (3) of Section 129 of the Companies Act, 2013, your Company has prepared the consolidated financial statements of the Company, which forms part of this annual report.

As per the provisions of Section 136 of the Companies Act, 2013 the Company has placed separate audited financial statements of its Subsidiaries / JV''s on its website www.powermechprojects.com. The annual accounts of the Subsidiary Companies / JV''s and the related detailed information shall be made available to members seeking such information at any point of time.

The Statement containing the salient features of the Subsidiaries & JV''s as per sub-sections (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 and under Rule 8 of Companies (Accounts) Rules, 2014 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure-2 to this report.

RELATED PARTY TRANSACTIONS

During the year, no transaction with related parties was in conflict with the interests of the Company. All transactions entered into by the Company with related parties during the financial year were in the ordinary course of business and on an arm''s length pricing basis.

All Related Party Transactions are placed on a quarterly basis before the Audit Committee and before the Board for the noting and approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are of a foreseeable and repetitive nature.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company www.powermechprojects.com.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 is annexed herewith as Annexure-3 to this report.

STATUTORY AUDITORS

The Shareholders in their meeting held on 25th September, 2019, approved the appointment of M/s. K.S. Rao & Co., Chartered Accountants as the Statutory Auditors of the Company to hold office till the conclusion of 25th Annual General Meeting.

AUDITORS'' REPORT

There are no qualifications, reservations or adverse remarks made by M/s. K.S. Rao & Co., Chartered Accountants, Statutory Auditors, in their report for the financial year ended 31st March, 2023.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

INTERNAL AUDITORS

The board, based on the recommendation of the Audit Committee, had appointed an in house team as Internal Auditors of the Company for the fiscal 2024.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has reappointed M/s. P.S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for fiscal 2023.

The Secretarial Audit Report for the FY 2022-23 issued by M/s. P.S. Rao & Associates, Practicing Company Secretaries in the Form MR-3 is annexed herewith as Annexure-4 to this report.

Directors Response on the observations made by the Secretarial Auditors in the report.

S.

No.

Details of Observation

Observation / Corrective Measure Action

Response / Reply

1

In terms of Reg. 21 of SEBI (Listing Obligations and Disclosure Requirements) 2015 -the gap between two risk management committee meetings, shall not exceed 180 days.

Typographical mistake occurred while filing the Corporate Governance Report for the quarters ended Jun''22 & Sep''22 and wherein the details of meeting of Risk Management Committee (RMC) were not mentioned. Upon the receipt of query from National Stock Exchange of India Limited (NSE), the Company informed NSE that the details were missed inadvertently and would re-submit the same upon providing access window for resubmission. NSE is yet to respond on the reply.

Noted for Compliance

2

IEPF-1

Unclaimed dividend for the year 2015-16 of ''34,379/-has been transferred to the account of IEPF in terms of section 124(5) of the Act. Due to technical error in the system, the same has not been reflected in the account. Therefore, the respective return (IEPF-1) in terms of Rule 5(1) Investor Education and Protection Fund Authority (Accounting, Audit Transfer and Refund) Rules, 2016 could not be submitted as the same can be filed only on the reflection of transferred amount.

Transfer was initiated and the money got debited from the account. Due to technical glitches, the money did not get credited in the dedicated account of IEPF. Ticket has been raised with MCA and the issue is in the process.

3

IEPF-2

IEPF-2 forms are yet to be filed by the Company in terms of rule 5(8) and 7(2B) of Investor Education and Protection Fund Authority (Accounting, Audit Transfer and Refund) Rules, 2016

Filing has be done

DIRECTORS'' & KMP

Reappointments

Pursuant to the provisions of section 152 of the Companies Act, 2013 and in terms of Article 134 of the Articles of Association of the Company Mrs. Lakshmi Sajja, Director, retires by rotation and being eligible, offers herself for reappointment at the ensuing Annual General Meeting. The Board recommends her reappointment.

Cessations

MrT. Sankaraligam and Mr. GDV Prasada Rao, Non-Executive Independent Directors on the board of the Company vacated their offices w.e.f. 21.05.2023 and 26.07.2023 respectively on account of completion of their tenures of two consecutive terms as Independent Directors.

Appointments after closure of financial year

Mr. Jayarama Prasad Chalasani was appointed as an additional Director under independent category w.e.f. 26.07.2023 for a first term of five consecutive years. The relevant resolution is proposed for approval of shareholders in the Notice of the AGM.

DECLARATION BY INDEPENDENT DIRECTORS

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with

the criteria of independence as prescribed under sub-section (7) of Section 149 of the Act and under Regulation 25 of the SEBI (LODR) Regulations, 2015.

In the opinion of the Board, all the Independent Directors of the Company possess integrity, expertise and the proficiency justifying their office and fulfill the conditions of Independent Director provided under SEBI (LODR) Regulations, 2015 and are independent of the management.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

The details of the familiarization program for the Independent Directors are provided in the Corporate Governance Report and also placed on the website of the Company www.powermechprojects.com

BOARD MEETINGS

The Board of Directors of the Company duly met 5 (five) times during the financial year. The intervening gap between any two consecutive Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013.

The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. COMMITTEES OF BOARD OF DIRECTORS

We have in place all the Committees of the Board which are required to be constituted under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed note on the Board and its Committees is provided under the Corporate Governance Report section in this Board''s Report.

The Composition of various Committees of the Board as on the date of this report is hereunder:

1 Name of the Committees

Composition of the Committees

Audit Committee

1.

Mr. Jayarama Prasad Chalasani (Chairman);

2.

Mr. M. Rajiv Kumar;

3.

Ms. Lasya Yerramneni

Nomination and Remuneration Committee

1.

Mr. Vivek Paranjpe (Chairman);

2.

Mr. Jayarama Prasad Chalasani;

3.

Ms. Lasya Yerramneni

Corporate Social Responsibility Committee

1.

Mr. S. Kishore Babu (Chairman);

2.

Mrs. S. Lakshmi;

3.

Ms. Lasya Yerramneni

Stakeholders Relationship Committee

1.

Mr. M. Rajiv Kumar (Chairman);

2.

Mrs. S. Lakshmi;

3.

Ms. Lasya Yerramneni

Risk Management Committee

1.

Mr. Jayarama Prasad Chalasani (Chairman);

2.

Mr. M. Rajiv Kumar

3.

Mr. S. Kishore Babu

Investment Committee

1.

Mr. Jayarama Prasad Chalasani (Chairman);

2.

Mr. M. Rajiv Kumar;

3.

Ms. Lasya Yerramneni

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

CHANGE IN NATURE OF BUSINESS:

There is no change in the nature of business during the period under review.

MATERIAL CHANGES AND COMMITMENTS:

There are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

i. in the preparation of the annual accounts for the financial year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2022-23 and of the statement of profit and loss of the Company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts for the year 2022-23 have been prepared on a going concern basis.

v. that the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

vi. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in then reporting to the Chairman & Managing Director.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 (9) & (10) of Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formalized the process and institutionalized ''Whistle Blower Policy'' within the Company, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage / misappropriation of assets to the Company.

The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee.

The details of the whistle blower Policy are posted on the website of the Company www.powermechprojects.com. DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy as stipulated under Regulation 43A of the Listing Regulations is applicable to your Company for the FY 2022-23 and is placed on the website of the Company at https://www.powermechprojects.com/investor-relations

RISK MANAGEMENT

The Company has constituted a Risk Management Committee and formulated a policy on risk management in accordance with the Companies Act, 2013 and Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s report. The risk Management Policy of the Company is posted on the website of the Company and the web link is www.powermechprojects.com/investor-relations

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2023 shall be made available on the Company''s website www.powermechprojects.com/investor-relations

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34 (2) (e) of the of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Management Discussion & Analysis forms part of the Annual Report and is herewith annexed as Annexure-5 to this report.

CHANGES IN SHARE CAPITAL:

During the year under review, there was a preferential allotment of 1,95,593 Equity Shares to Power Mech Infra Limited, an entity belonging to the Promoter Group and by virtue of this allotment, the Share capital of the Company got changed. The revised paid up share capital of the Company is ''14,90,63,570/- divided into 1,49,06,357 equity shares of ''10/- each

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the information required pursuant to Section 197 (12) of the Act read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company has been appended as Annexure-6 to this Report.

BOARD EVALUATION

The parameters and the process for evaluation of the performance of the Board and its Committees have been explained in the corporate governance report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-7 to this report.

CORPORATE GOVERNANCE

The Board of Directors of your Company believes that strong corporate governance is an important instrument of investor''s protection as it ensures complete transparency in Company''s matters.

As required under Regulation 34(3) of the Listing Regulations, a detailed report on Corporate Governance is included in the Annual Report as Annexure-8. The Auditors have certified the Company''s compliance with the requirements of Corporate Governance in terms of Regulation 34(3) of the Listing Regulations and the same is annexed to the Report on Corporate Governance.

Business Responsibility and Sustainability Report (BRSR)

Business Responsibility and Sustainability Report for the year under review, as required to be reported under Regulation 34 (2) (f) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is shown in separate section forming part of the annual report.

CORPORATE SOCIAL RESPONSIBILITY

The Board in compliance with the provisions of Section 135(1) of the Companies Act, 2013 and rules made there under has constituted a Corporate Social Responsibility (CSR) Committee.

The Company works primarily through its trust, Power Mech Foundation, the CSR arm of the Company.

A detailed report on the CSR activities taken up by your Company is annexed as Annexure-9 to this report. Further the details of the policy are also posted on the website of the company www.powermechprojects.com

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year:

• No. of complaints received: Nil

• No. of complaints disposed off: Nil

POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

The policy of the Company on Director''s appointment and remuneration, including the criteria for determining qualifications, expertise, skills, positive attributes, independence of a director and other matters as required under sub section 3 of section 178 of the Companies Act, 2013 is available on our website at www.powermechprojects.com

ACKNOWLEDGMENTS

We thank our customers, vendors, investors, bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was possible by their hard work, solidarity, cooperation and support.

We thank the Governments of various Countries where we have our operations and more particularly Government of India and various regulators viz a viz RBI, SEBI, Ministry of Corporate Affairs, Income Tax Department, and all the state government and other government agencies for their support, and looking forward to their continued support in future.

For and on behalf of the Board of Directors of

Sd/-

S. Kishore Babu

Place: Hyderabad Chairman & Managing Director

Date: 25.08.2023 DIN: 00971313


Mar 31, 2018

DIRECTORS’ REPORT

Dear Shareholders,

The Directors have immense pleasure in presenting the Nineteenth Annual Report of your Company along with the audited financial statements (both standalone and consolidated) for the financial year ended 31st March, 2018.

FINANCIAL RESULTS

The financial performance for the current year in comparison to the previous year is as under: (Rs in Mn)

Sl.

No.

Standalone

Consolidated

Particulars

Current Year (2017-18)

Previous Year (2016-2017)

Current Year (2017-18)

Previous Year (2016-2017)

1

Revenue from operations

13,101

12,911

15,479

13,382

2

Other income

74

77

67

77

3

Total income

13,175

12,988

15,546

13,459

4

Expenditure

12,163

12,005

14,243

12,461

5

Profit before interest, depreciation and tax

1,710

1,694

2,090

1,737

6

Depreciation

364

396

428

409

7

Interest and finance charges

334

315

359

329

8

Profit before tax

1,012

983

1,300

1,003

9

Provision for taxes (including DTL)

353

346

392

356

10

Profit after tax

659

637

908

647

11

Other Comprehensive income

-

4

-

4

12

Total Comprehensive income for the year

659

641

908

651

13

Dividend for the year (including corporate dividend tax)

17.73

17.70

17.73

17.70

14

Reserves(excluding revaluation reserves)

6,665

6,025

6,838

6,065

15

EPS (Rs) on face value Rs.10/- each share

44.79

43.29

54.01

43.96

16

Book value (Rs.) on face value of Rs.10/- each share

463

419

474

422

OPERATING RESULTS AND BUSINESS

Your Company has achieved operational turnover of Rs. 13,101 Mn and profit after tax of Rs. 659 Mn during FY 17-18 as against previous year operational turnover of Rs. 12,911 Mn and profit after tax of Rs. 641 Mn respectively.

Further your Company has achieved consolidated operational turnover of Rs. 15,479 Mn and profit after tax of Rs. 908 Mn during FY 17-18 as against previous year consolidated operational turnover of Rs. 13,382 Mn and profit after tax of Rs. 651 Mn respectively.

DIVIDEND

Your Directors are pleased to recommend a final dividend at Re 1/- per equity share of face value of Rs. 10/- each for the year ended 31st March, 2018. The Final Dividend is subject to the approval of Members at the ensuing annual general meeting. The total dividend for the financial year will absorb Rs. 17.73 Mn, including Dividend Distribution Tax of Rs. 3.02/- Mn.

SUBSIDIARIES & JOINT VENTURES

As on 31st March, 2018 your Company has five subsidiaries, i.e Hydro Magus Private Limited (HMPL), Power Mech Industri Private Limited (PMIPL), Mas Power Mech Arabia (Saudi Arabia), Power Mech Projects LLC (Oman) and Power Mech BSCPL Consortium Private Limited.

Further there is one Joint Venture Company i.e. GTA Power Mech Nigeria Limited (Nigeria).

During the financial year, the Company has divested its entire shareholding from Power Mech - CPNED Services (Hongkong) Holding Co Ltd, JV Company.

Subsequent to the end of the financial year, the Company has incorporated a JV Company in Dubai i.e. GTA Powermatic DMCC. SUBSIDIARIES

» Hydro Magus Private Limited: Hydro Magus Private Limited is a subsidiary of Power Mech established with a vision to make positive contribution in surging Hydro Power sector in India and neighbouring countries. The Company''s operation profile envisages supply and construction of hydro power plants on EPC basis, renovation and modernization after sales services, AMC and O&M of existing hydro power plants. The strength of the Company is derived by its commitment in upholding quality and safety in execution at all stages.

- Power Mech Industri Private Limited: A wholly-owned subsidiary of Power Mech, has been established to meet the needs of power plants both thermal as well as Hydro for manufacturing, re-engineering and repairing of components.

With the intention to improve our engineering, machining and repair facilities for general engineering components and non-critical equipment used in power projects including spare parts, a large heavy engineering facility at Noida for non-critical equipment and spare parts have been set up under this Company. The state-of-the-art workshop in Noida is equipped with sophisticated and heavy duty machines with facilities to repair and re- blade turbine rotors of capacity up to 600 MW. Strategically located, the workshop would provide vital service indigenously and therefore bringing down the down time of equipment in a power plant. It is aimed to provide efficient engineering services at affordable price, reasonable time line and high level of quality.

- Power Mech BSCPL Consortium Private Limited: A Subsidiary Company of Power Mech is mainly incorporated to execute the contract relating to the infrastructure development works required for development of medical device manufacturing park for Andhra Pradesh Medtech Zone Limited at Vishakhapatnam.

- Mas Power Mech Arabia: It is a subsidiary of Power Mech, established in Saudi Arabia to cater the needs in the Saudi Arabia and surrounding regions for providing services in ETC, Civil and O&M. The Company is equipped to provide services in all the verticals keeping high standards in quality, safety and timeline.

The Company draws technical guidance and support from the parent company and it will be an extended arm of Power Mech in providing its skills and expertise in this part of the world.

- Power Mech Projects LLC: A subsidiary company of Power Mech incorporated in Oman to tap the local market of Oman and neighbouring countries.

JOINT VENTURES

- GTA Power Mech Nigeria Limited: A joint venture of Power Mech is designed to undertake packages in power, infra and process industry sectors including ETC of civil, mechanical and electrical and also O&M of plants. With solid and stable technical backup from the parent companies, GTA Power Mech is in a position to undertake projects of any magnitude and type in different terrains and weather. The Company has its registered office in Lagos, Nigeria and has established a networking with potential customers. The Company has capability to undertake packages in spectrum of activities in projects and plants supported by expert team in respective fields and strategic and technical collaborations from parent companies.

TRANSFER TO RESERVES

The Board do not propose to transfer any profits to the reserves for the fiscal 2018.

CONSOLIDATED FINANCIAL STATEMENTS

During the year, the Board of Directors reviewed the affairs of the Subsidiaries/JVs. In accordance with Sub Section (3) of Section 129 of the Companies Act, 2013, we have prepared the consolidated financial statements of the company, which forms part of this annual report.

As per the provisions of Section 136 of the Companies Act, 2013 the Company has placed separate audited financial statements of its Subsidiaries on its website www.powermechprojects.in. The annual accounts of the Subsidiary Companies and the related detailed information shall be made available to members seeking such information at any point of time.

The Statement containing the salient features of the Subsidiaries & JVs as per sub -sections (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 and under Rule 8 of Companies (Accounts) Rules, 2014 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure-2 to this report.

AUDITORS’ REPORT

There are no qualifications, reservations or adverse remarks made by M/s. Brahmayya & Co, Chartered Accountants, Statutory Auditors, in their report for the financial year ended March 31, 2018.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Pursuant to Companies (Amendment) Act, 2017, the provision pertaining to ratification of appointment of Statutory Auditor has been omitted with effect from 7th May, 2018. Hence, the agenda for ratification of appointment of Statutory Auditor has not been proposed in the notice of ensuing AGM.

INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee, re-appointed M/s. Ramesh & Co., Chartered Accountants, Hyderabad, as an Internal Auditors of your Company.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has reappointed M/s. P.S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report in the Form MR-3 is annexed herewith as Annexure-3 to this report.

The Secretarial Audit Report for the FY 17-18 does not contain any qualification, reservation, adverse remark.

DIRECTORS

Pursuant to the provisions of section 152 of the Companies Act, 2013 and in terms of Article 134 of the Articles of Association of the Company Mr. M. Rajiv Kumar, Director retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting. The Board recommends his reappointment.

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (7) of Section 149 of the Act and under Regulation 25 of the SEBI (LODR) Regulations, 2015.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

During the year under review Mr. M. Rajendran has resigned from the Board as Wholetime Director with effect from 13th August, 2017.

During the year under review, Mr. N. Bhupesh Chowdary was appointed as an Additional Director under the category of Wholetime Director by the Board of Directors w.e.f. 13th August, 2017, and subsequently his appointment was ratified by the members of the Company at the previous annual general meeting.

However subsequent to the end of the financial year, Mr. N. Bhupesh Chowdary has resigned as Wholetime Director and CEO due to personal reasons with effect from 01st July, 2018.

BOARD MEETINGS

The Board of Directors of the Company duly met 5 (five times). The intervening gap between any two consecutive Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013.

The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

COMMITTEES OF BOARD OF DIRECTORS

We have in place all the Committees of the Board which are required to be constituted under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed note on the Board and its committees is provided under the Corporate Governance Report section in this Annual Report.

The Composition of various Committees of the Board is hereunder:

Name of the Committee

Composition of the Committee

Audit Committee

Mr. Sutanu Behuria, Chairman Mr. G.D.V. Prasada Rao, Member Mr. T. Sankaralingam, Member

Nomination and Remuneration Committee

Mr. T. Sankaralingam, Chairman Mrs. S. Lakshmi, Member Mr. G.D.V. Prasada Rao, Member

Corporate Social Responsibility Committee

Mr. S. Kishore Babu, Chairman Mrs. S. Lakshmi, Member Mr. G.D.V. Prasada Rao, Member

Stakeholders Relationship Committee

Mr. M Rajiv Kumar, Chairman Mrs. S. Lakshmi, Member Mr. G.D.V. Prasada Rao, Member

Investment Committee

Mr. S Kishore Babu, Chairman Mr. G.D.V. Prasada Rao, Member Mr. M. Rajiv Kumar, Member

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business during the period under review.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the company occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Board of your Company has laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies,the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2017-18 and of the statement of profit and loss of the Company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts for the year 2017-18 have been prepared on a going concern basis.

v. that the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

vi. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in then reporting to the Chairman &Managing Director.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 (9) & (10) of Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formalized the process and institutionalized ‘Whistle Blower Policy'' within the Company, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage/misappropriation of assets to the Company.

The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee.

The details of the whistle blower Policy are posted on the website of the Company http://www.powermechprojects.in.

RISK MANAGEMENT

The Company has risk management mechanism in place which mitigates the risk at appropriate situations and there are no elements of risk, which in the opinion of Board of Directors may threaten the existence of the Company. A detailed description of the risks & threats has been disclosed in the Management Discussion Analysis Report forming part of the Annual Report.

RELATED PARTY TRANSACTIONS

During the year, no transaction with related parties was in conflict with the interests of the Company. All transactions entered into by the Company with related parties during the financial year were in the ordinary course of business and on an arm''s length pricing basis.

Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. All Related Party Transactions are placed on a quarterly basis before the Audit Committee and Board of Directors for their review.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company http://www. powermechprojects.in/images/Policy-on-Related-Party-Transactions.pdf.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 is annexed herewith as Annexure-4 to this report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the details forming part of the extract of the Annual Return in Form MGT- 9 is annexed herewith as Annexure-5 to this report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34(2) (e) of the of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Management Discussion & Analysis forms part of the Annual Report and is herewith annexed as Annexure-6 to this report.

CHANGES IN SHARE CAPITAL

During the year under review, there was no change in the share capital of the Company. The paid up share capital of the Company is Rs. 14,71,07,640/- divided into 1,47,10,764 equity shares of Rs. 10/- each.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the information required pursuant to Section 197 (12) of the Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company has been appended as Annexure-7 to this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-8 to this report.

CORPORATE SOCIAL RESPONSIBILITY

The Company works primarily through its trust, Power Mech Foundation, the CSR arm of the Company.

The Foundation is tirelessly and steadfastly engages itself in meeting the social causes in the neighbourhood irrespective of cast and creed. The beneficiaries are abandoned infants, forsaken street children, neglected orphans, physically and mentally challenged children, students in remote villages and deserving people seeking medical assistance.

At every given opportunity the Foundation conducts periodical Blood donation camps, Health camps and other social awareness camps at regular periodicity.

The Foundation is adopting schools in the neighbourhood villages and takes care of the academic needs of the poor students. The services of the villagers and neighbourhood people are also involved during such events to give thrust and achieve success.

A detailed report on the CSR activities taken up by your Company is annexed as Annexure-9 to this report. Further the details of the policy are also posted on the website of the company www.powermechprojects.in

CORPORATE GOVERNANCE

The Board of Directors and the Management of your Company recognise the importance of good corporate governance in ensuring greater transparency, protecting the interests of its shareholders, as well as strengthening investors'' confidence in its management and financial reporting and are, accordingly, committed to maintaining a high standard of corporate governance.

In line with the commitment of the Company to maintaining high standards of corporate governance, the Company will continually review its corporate governance processes to strive to fully comply with the all the statutory laws and regulations as are applicable to the Company in letter and spirit.

As required under Regulation 34(3) of the Listing Regulations, a detailed report on Corporate Governance is included in the Annual Report as Annexure-10. The Secretarial Auditors have certified the Company''s compliance with the requirements of Corporate Governance in terms of Regulation 34(3) of the Listing Regulations and the same is annexed to the Report on Corporate Governance.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its

future operations.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year:

- No.of complaint received : Nil

- No.of complaints is posed off: Nil

ACKNOWLEDGMENTS

We thank our customers, vendors, investors, bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was possible by their hard work, solidarity, cooperation and support.

We thank the Governments of various Countries where we have our operations and more particularly Government of India and various regulators viz a viz RBI, SEBI, Registrar of Companies, Income Tax Department, and all the state government and other government agencies for their support, and look forward to their continued support in future.

For and on behalf of the Board of Directors of

Sd/-

S Kishore Babu

Place: Hyderabad Chairman & Managing Director

Date:11.08.2018 DIN: 00971313


Mar 31, 2017

Dear Shareholders,

The Directors have immense pleasure in presenting the 18th Annual Report of your Company along with the Audited Financial Statements (both Standalone and Consolidated) for the Financial Year ended 31st March, 2017.

FINANCIAL RESULTS

The financial performance for the current year in comparison to the previous year is as under:

(Rs in Mn)

S

Consolidated

Standalone

No.

Particulars

Current Year (2016-17)

Previous Year (2015-2016)

Current Year (2016-17)

Previous Year (2015-16)

1.

Revenue from Operations

13,382

13,782

12,911

13,621

2.

Other income

77

55

77

56

3.

Total Income

13,459

13,837

12,988

13,677

4.

Expenditure

12,461

12,682

12,005

12,538

5.

Profit before interest, depreciation and tax

1,741

1,877

1,693

1,853

6.

Depreciation

409

390

396

389

7.

Interest and Finance Charges

329

329

314

325

8.

Profit before tax

1,003

1,158

983

1,139

9.

Provision for taxes (including DTL)

357

406

346

400

10.

Profit after tax

651

757

641

743

11.

Dividend for the year (including corporate dividend tax)

17

17

17

17

12.

Reserves (Excluding Revaluation reserves)

6,065

5,404

6,025

5,384

13.

EPS (Rs) on face value of Rs. 10/- each share

43.96

54.08

43.29

53.23

14.

Book value (Rs.) on face value of Rs. 10/- each share

422

377

419

376

OPERATING RESULTS AND BUSINESS

Your Company has achieved operational turnover of Rs. 12,911 Mn and profit after tax of Rs. 641 Mn during FY 16-17 as against previous year operational turnover of Rs. 13,621 Mn and profit after tax of Rs. 743 Mn respectively.

Further your Company has achieved consolidated operational turnover of Rs. 13,382 Mn and profit after tax of Rs. 651 Mn during FY 16-17 as against previous year consolidated operational turnover of Rs. 13,782 Mn and profit after tax of Rs. 757 Mn respectively.

DIVIDEND

Your Directors are pleased to recommend a Final Dividend of Re 1/- per equity share of face value of Rs. 10/- each for the year ended 31st March, 2017. The Final Dividend is subject to the approval of members at the ensuing annual general meeting. The total dividend for the financial year will absorb Rs. 1,77,05,529/-, including Dividend Distribution Tax of Rs. 29,94,765/-.

SUBSIDIARIES & JOINT VENTURES

As on 31st March, 2017 your Company has four subsidiaries, i.e Hydro Magus Private Limited (HMPL), Power Mech Industri Private Limited (PMIPL), MAS Power Mech Arabia (Saudi Arabia) and Power Mech Projects Limited LLC. Further there are two Joint Venture Companies i.e GTA Power Mech Nigeria Limited (Nigeria) and Power Mech-CPNED Servcies (Hong Kong) Holding Co. Ltd (Hong Kong).

SUBSIDIARIES

- Hydro Magus Private Limited: Hydro Magus Private Limited is a subsidiary of Power Mech established with a vision to make positive contribution in surging Hydro Power sector in India and neighboring countries. The Company’s operation profile envisages supply and construction of hydro power plants on EPC basis, renovation and modernization after sales services, AMC and O&M of existing hydro power plants. The strength of the Company is derived by its commitment in upholding quality and safety in execution at all stages.

- Power Mech Industri Private Limited: A wholly-owned subsidiary of Power Mech, has been established to meet the needs of power plants both thermal as well as Hydro for manufacturing, re-engineering and repairing of components.

With the intention to improve our engineering, machining and repair facilities for general engineering components and non-critical equipment used in power projects including spare parts, a large heavy engineering facility at Noida for non-critical equipment and spare parts have been set up under this Company. The state-of-the-art workshop in Noida is equipped with sophisticated and heavy duty machines with facilities to repair and re-blade turbine rotors of capacity up to 600 MW. Strategically located, the workshop would provide vital service indigenously and therefore bringing down the down time of equipment in a power plant. It is aimed to provide efficient engineering services at affordable price, reasonable time line and high level of quality.

- MAS Power Mech Arabia: It is a subsidiary of Power Mech, established in Saudi Arabia to cater the needs in the Saudi Arabia and surrounding regions for providing services in ETC, Civil and O&M. The Company is equipped to provide services in all the verticals keeping high standards in quality, safety and timeline.

The Company draws technical guidance and support from the parent company and it will be an extended arm of Power Mech in providing its skills and expertise in this part of the world.

- Power Mech Projects Limited LLC: A subsidiary company of Power Mech incorporated in Oman to tap the local market of Oman and neighboring countries.

JOINT VENTURES

- GTA Power Mech Nigeria Limited: A joint venture of Power Mech is designed to undertake packages in power, infra and process industry sectors including ETC of civil, mechanical and electrical and also O&M of plants. With solid and stable technical backup from the parent companies, GTA Power Mech Nigeria Limited is in a position to undertake projects of any magnitude and type in different terrains and weather. The Company has its registered office in Lagos, Nigeria and has established a networking with potential customers. The Company has capability to undertake packages in spectrum of activities in projects and plants supported by expert team in respective fields and strategic and technical collaborations from parent companies.

- Power Mech-CPNED services (Hong Kong) Holding Co. Limited: In order to provide comprehensive O&M solutions, your company has entered into joint venture agreement with Chengdu Pengrun New Energy Development Company Limited (‘CPNED’), a company registered under PRC laws for distribution of equipment and spare parts, including boilers, turbines and generators, for O&M projects in India. Your Company holds 50% stake in M/s. Power Mech-CPNED Services (Hong Kong) Holding Co. Limited.

TRANSFER TO RESERVES

The Board do not propose to transfer any profits to the reserves for the fiscal 2017.

CONSOLIDATED FINANCIAL STATEMENTS

During the year, the Board of Directors reviewed the affairs of the Subsidiaries/JV’s. In accordance with Sub Section (3) of Section 129 of the Companies Act, 2013, we have prepared the consolidated financial statements of the company, which forms part of this annual report.

As per the provisions of Section 136 of the Companies Act, 2013 the Company has placed separate audited financial statements of its Subsidiaries & JV’s on its website www.powermechprojects.com. The annual accounts of the Subsidiary Companies, JV’s and the related detailed information shall be made available to members seeking such information at any point of time.

The Statement containing the salient features of the subsidiaries & JV’s as per sub-sections (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 and under Rule 8 of Companies (Accounts) Rules, 2014 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure-2 to this report.

STATUTORY AUDITORS

M/s. Brahmayya & Co, Chartered Accountants (ICAI Firm Registration No: 000513S), Vijayawada were appointed as the statutory auditors of the company for a period of 5 years by the members of the Company in the 15th Annual General Meeting to hold the office till the conclusion of 20th Annual General Meeting subject to ratification of the appointment by members of the company at every AGM. As such their appointment as Auditors for FY 17-18 is proposed for ratification by the shareholders in the ensuing annual general meeting.

The company has received letter from the Auditors under Section 139(1) of the Companies Act, 2013 and the Rules framed there under, to that effect, that their appointment, if made, would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such re-appointment within the meaning of the section of the said Act.

The Auditor’s Report for the FY 16-17 does not contain any qualification, reservation, adverse remark or disclaimer.

INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee, re-appointed M/s. Ramesh & Co., Chartered Accountants, Hyderabad, as an Internal Auditors of your Company.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and based on the recommendation of Audit Committee, the Company has re-appointed M/s. P.S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the FY 17-18. The Secretarial Audit Report for the FY 16-17 is annexed herewith as Annexure-3 to this report.

The Secretarial Audit Report for the FY 16-17 does not contain any qualification, reservation, adverse remark or disclaimer.

DIRECTORS

Pursuant to the provisions of section 152 of the Companies Act, 2013 and in terms of Article 134 of the Articles of Association of the Company Smt. S. Lakshmi, Director retires by rotation and being eligible, offers herself for reappointment at the ensuing Annual General Meeting. The Board recommends her reappointment.

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under sub-section (7) of Section 149 of the Act and under Regulation 25 of the SEBI (LODR) Regulations, 2015.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR:

During the year under review, Mr. Vivek Paranjpe was appointed as an Additional Director under the category of Independent Director by the Board of Directors at their meeting held on 31st August, 2016, and subsequently his appointment was ratified by the members of the Company at the previous annual general meeting.

Further the members of the Company at the previous annual general meeting held on 30th September, 2016, also ratified the appointment of Mr. M. Rajiv Kumar as Non-Executive Director, Mr. Sutanu Behuria as an Independent Director and Mr. S. Kishore Babu as Managing Director of the Company.

Further, Mr. Amitabha Guha, Independent Director, resigned from the office of the Board w.e.f. 04th June, 2016.

Subsequent to the end of the financial year, Shri. M. Rajendran, Wholetime Director resigned from the Board w.e.f 13th August 2017. Your Board of Directors places on record its deep appreciation for his significant contribution and for his valuable advices to the Board on the operations of the Company and other related matters from time to time during his tenure.

Further Shri N. Bhupesh Chowdary was appointed as an Additional Director under the category of Wholetime Director subject to the approval of the members of the Company w.e.f. 13th August, 2017 by the Board of Directors at their meeting held on 12th August, 2017. His term of appointment is upto the date of ensuing annual general meeting and your Board of Directors recommends his appointment and the relevant resolutions for his appointment is provided in the notice of the AGM for the approval of the members.

Subsequent to the end of the FY 2016-17, Mr. Mohit Gurjar, Company Secretary has resigned w.e.f. 30th May, 2017 and Mr. Rohit Tibrewal was appointed as a Company Secretary of the Company w.e.f. 01st June, 2017.

Number of Meetings of the Board during the year:

The Board of Directors of the Company duly met 4 (four times). The intervening gap between any two consecutive Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013.

The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

COMMITTEES OF BOARD OF DIRECTORS

We have in place all the Committees of the Board which are required to be constituted under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed note on the Board and its committees is provided under the Corporate Governance Report section in this Annual Report.

The Composition of various Committees of the Board is hereunder:

Name of the Committee

Composition of the Committee

Audit Committee

Mr. Sutanu Behuria (Chairman) Mr. G.D.V. Prasada Rao and Mr. T. Sankaralingam

Nomination and Remuneration Committee

Mr. T. Sankaralingam (Chairman) Mrs. S. Lakshmi and Mr. G.D.V. Prasada Rao

Corporate Social Responsibility Committee

Mr. S. Kishore Babu (Chairman)

Mrs. S. Lakshmi

Mr. G.D.V. Prasada Rao

Stakeholders Relationship Committee

Mr. M Rajiv Kumar (Chairman)

Mrs. S. Lakshmi

Mr. G.D.V. Prasada Rao

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business during the period under review.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the company occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has laid down certain guidelines, processes and structure, which enables implementation of appropriate internal financial controls across the organization. Such internal financial controls encompass policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.

Evaluation of the internal financial controls are subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedures may deteriorate.

The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control, stated in the Guidance Note on Audit of Internal Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2016-17 and of the statement of profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2016-17 have been prepared on a going concern basis.

v. That the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in then reporting to the Managing Director.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 (9) & (10) of Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formalized the process and institutionalized ‘Whistle Blower Policy’ within the Company, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage/misappropriation of assets to the Company.

The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee.

The details of the whistle blower Policy are posted on the website of the Company http://www.powermechprojects.com.

RISK MANAGEMENT

The Company has risk management mechanism in place which mitigates the risk at appropriate situations and there are no elements of risk, which in the opinion of Board of Directors may threaten the existence of the Company. A detailed description of the risks & threats has been disclosed in the Management Discussion & Analysis Report forming part of the Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There are no materially significant related party transactions entered by the Company with the Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company http://www.powermechprojects.com/images/Policy-on-Related-Party-Transactions.pdf.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 and Disclosure under Schedule V of SEBI LODR) Regulations, 2015 is herewith annexed as Annexure-4 to this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure-5 to this report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34(2) (e) of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, a report on Management Discussion & Analysis forms part of the Annual Report and is herewith annexed as Annexure-6 to this report.

CHANGES IN SHARE CAPITAL

During the year under review, there was no change in the share capital of the Company. The paid up share capital of the Company stands at Rs. 14,71,07,640/- divided into 1,47,10,764 equity shares of Rs. 10/- each. .

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the information required pursuant to Section 197 (12) of the Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company has been appended as Annexure-7 to this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-8 to this report.

CORPORATE GOVERNANCE

Your Company firmly understands and believes the importance of Corporate Governance. We always aim for the growth by adhering to the National and International Corporate Governance Standards. Our philosophy on corporate governance ensures fiscal accountability, ethical corporate behavior and fairness to all stakeholders comprising regulators, employees, customers, vendors, investors and the society at large.

As required under Regulation 34(3) of the Listing Regulations, a detailed report on Corporate Governance is included in the Annual Report as Annexure-9. The Auditors have certified the Company’s compliance with the requirements of Corporate Governance in terms of Regulation 34(3) of the Listing Regulations and the same is annexed to the Report on Corporate Governance.

HUMAN RESOURCES

Your Company considers its Human Resource as the key to achieve its objectives. Keeping this in view, your Company takes all the care to attract, train and retain well qualified and deserving employees. The employees are sufficiently empowered and enabled to work in an environment that inspires them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind fulfilling the Company’s vision. Your Company appreciates the contribution of its dedicated employees.

CORPORATE SOCIAL RESPONSIBILITY

Power Mech has been into CSR activities from a longer period of time and even before it was made mandatory by the Companies Act, 2013. The Company works primarily through its trust, Power Mech Foundation, towards supporting projects in social welfare, eradication of hunger and malnutrition, promoting education for the poor’s, health management and medical aids for the children’s and old aged people, orphanage and old age homes etc.

A detailed report on the CSR activities taken up by your Company is annexed as Annexure-10 to this report. Further the details of the policy are also posted on the website of the company www.powermechprojects.com.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year:

- No. of complaints received: Nil

- No. of complaints disposed off: Nil

ACKNOWLEDGMENTS

We thank our customers, vendors, investors, bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was possible by their hard work, solidarity, cooperation and support.

We thank the Governments of various Countries where we have our operations and more particularly Government of India and various regulators viz a viz RBI, SEBI, Registrar of Companies, Income Tax Department, and all the State Government’s and other Government agencies for their support, and look forward to their continued support in future.

By order of the Board of Directors

Sd/-

S Kishore Babu

Chairman & Managing Director

DIN: 00971313

Place: Hyderabad

Date : 12.08.2017


Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting their 16th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2015.

1. Financial Performance of the Company

Your Company's Standalone financial performance, for the year ended 31st March 2015 is summarized below:

(Rupees in Lakhs)

PARTICULARS 2014-15 2013-14

Gross Revenue 136,152 119,878

Total Expenditure 119,106 103,655

Profit before Interest, Depreciation and Taxation 17,046 16,223

Less : Interest 2,858 2,258

Depreciation 3,664 3,274

Profit/(Loss) before Taxation 10,524 10,690

Less : Provision for Income Tax 3,765 3,756

Deferred Tax Liability / ( Asset) - 312 103

Profit/(Loss) after Tax 7,070 6,831

Add : Balance brought forward from previous year 19,879 13,577

Profit available for appropriation 26,949 20,408

Appropriation

Transfer to General Reserve 0 350

Proposed Dividend on Equity 126 164

Provision for Tax on distributed profits (On Equity shares) 26 15

Balance of Profit carried forward to next year 26,798 19,879

2. The State of Affairs of the Company

In the financial year 2014-15 your Company continued its growth momentum on key parameters. During the year, your company recorded healthy order intake which helped your Company to close the year with a strong order book of Rs.340,627 lakhs as on 31st March, 2015. The standalone revenue stood at Rs.136,152 lakhs, an increase of 14%, compared to previous year's revenue of Rs.119,878 lakhs.

The PAT stood at Rs.7,070 lakhs as against Rs. 6,831 lakhs in the previous year. The EPS was at Rs.56.94 for the year ended 31st March, 2015.

During the year under review there is no change in the nature of business of the company.

3. Management Discussion & Analysis

The Management's discussion and analysis is set out in this Annual Report.

4. Dividend

The Directors are pleased to recommend 10% dividend (i.e Rs.1/- for Equity share of Rs.10/- each) for the approval of the members for the FY 2014-15.

5. Transfer to Reserves

The board has not proposed to transfer any profits to the reserves for this fiscal 2015.

6. Changes in Share Capital

(i) Bonus Issue

The Company on June 26, 2014 had allotted bonus shares in the ratio of 10:1.2 and consequently the paid-up capital has increased by Rs.1,08,00,000 divided in 10,80,000 equity shares of Rs.10/- each.

(ii) Conversion of CCDS

The Company during the year had issued and allotted 562,500 equity shares of Rs.10/- each at a premium of Rs.190/- per share on July 16, 2014 to India Business Excellence Fund I pursuant to the exercise of conversion option vide their notice for conversion of 1125 Compulsorily Convertible Debentures of face value of Rs.100,000/-.

The capital structure of the company after taking into the above allotments stands as follows:

Equity Shares of Particulars Amount(Rs) Rs.10/- each

Authorized Capital 26,000,000 260,000,000

Issued/subscribed/ called-up & paid-up (As on 01.04.2014) 10,940,264 109,402,640

ADD: Bonus Issue in the ratio of 10:1.2 on 26.06.2014 10,80,000 10,800,000

ADD: Conversion of 1125 CCD's on 16.07.2014 5,62,500 5,625,000

Issued/subscribed/ called-up & paid-up post conversion of 125,827,64 125,827,640

CCDS (As on 31.03.2015)

7. Material Changes and Commitments Affecting Financial Position Between the End of the Financial Year and Date of Report

Public Issue of the Company

Your Company during the FY 2014-15 filed its Draft Red Herring Prospectus (DRHP) with Securities and Exchange Board of India (SEBI) for public issue of 4,269,000 equity shares of face value Rs.10 each, comprising of a fresh issue of 2,128,000 equity shares and an offer for sale of 2,141,000 equity shares. The Company has received final comments from SEBI on DRHP and shall plan for Issue opening at an opportune time.

8. Particulars of Loans, Guarantees or Investments

There are no transactions of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013.

9. Deposits

The Company has neither accepted nor renewed any deposits from public as defined under the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.

10. Particulars of Contracts or Arrangements Made with Related Parties

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure I to this report.

11. Explanation / Comments on Every Qualification / Reservation / Adverse Remarks / Disclaimer Made by Statutory Auditors / Secretarial Auditor There are no qualifications/reservations/adverse remarks made by statutory auditors

Reply to the observations in the Secretarial Audit Report:

- The Company has sent a reply dated 31st March, 2015 stating that Form INV 5 for the FY 2012-13 was filed on 27th March, 2015 and that the relevant investor wise details of unclaimed amounts have been uploaded on the Investor Education and Protection Fund Portal on the same day, further stating that the delay was due to oversight and was not intentional.

- The Company has responded as appropriate to each such notices related to the labour employed and related matters stated therein and made necessary compliances wherever applicable. In respect of certain matters the company has been levied penalty and the same is paid by the company.

12. Meetings of the Board

During the year under review the board of directors has met five times on May 13, 2014, June 26, 2014, July 16, 2014, September 11, 2014 and January 9, 2015 and the gap between two meetings did not exceed 120 days.

13. Appointment and Resignation of Directors & Key Managerial Personnel

The following are the changes in the directorships during the financial year 14-15

S. no Name of the Director Date of Event Appointment / Resignation

1 G. Srinivasulu June 26, 2014 Resignation

2 A.R.N. Rao June 26, 2014 Resignation

3 M. Jagan Mohan June 26, 2014 Resignation

4 Amitabha Guha June 26, 2014 Appointed as an additional Director

5 T. Sankaralingam June 26, 2014 Appointed as an additional Director

6 Amitabha Guha September 30, 2014 Confirmed as Director

7 T. Sankaralingam September 30, 2014 Confirmed as Director

8 G.D.V Prasada Rao September 30, 2014 Appointed as independent Director under the Companies Act, 2013 9 M.L. Sah September 30, 2014 Appointed as independent Director under the Companies Act, 2013

During the year Mr. T. Sankaralingam & Mr. Amitabha Guha were appointed as Additional Directors of the company w.e.f June 26, 2014. Members approved the appointments of Mr. Amitabha Guha, Mr. T. Sankaralingam, Mr. G.D.V. Prasada Rao and Mr M.L. Sah as Independent Directors in their Annual General Meeting for a period of five years and they are not liable to retire by rotation.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013.

Remuneration Policy for Directors, Key Managerial Personnel and other employees is attached to this report as Annexure II

The following are the changes in the KMPs during the financial year 2014-2015

S. NO. Name Designation Date of change Reason for change

1 J. Satish Vice president (finance and accounts) October 20, 2014 Appointment

13A. COMMITTEES OF DIRECTORS

Currently, the Board has six committees: the audit committee, nomination and remuneration committee, corporate social responsibility committee, stakeholders relationship committee, IPO committee and Risk Management Committee. The composition of the committees and compliances, as per the applicable provisions of the Act and Rules, are as follows:

Name of the Committee Composition of the Committee

Audit Committee* G.D.V. Prasada Rao (Chairman); Rakesh Sony; and Amitabha Guha.

Nomination and Remuneration Committee T. Sankaralingam (Chairman);Rakesh Sony; and M.L. Sah.

Corporate Social Responsibility Committee S. Kishore Babu (Chairman); S. Lakshmi; and G.D.V. Prasada Rao.

Stakeholders Relationship Committee G.D.V. Prasada Rao (Chairman); S. Lakshmi; and M.L. Sah.

IPO Committee M. Rajendran (Chairman); Rakesh Sony; and G.D.V. Prasada Rao.

Risk Management Committee M. Rajendran (Chairman); M.L. Sah; T. Sankaralingam and G.D.V. Prasada Rao.

* All recommendations made by the audit committee during the year were accepted by the Board.

14. Alteration to Memorandum and articles of Association of the Company

Your Company has altered the Main Objects of the Memorandum of Association pursuant to the resolution passed by the members through postal ballot on September 30, 2014.

Your Company has altered the Articles of Association pursuant to a special resolution passed by the members on October 16, 2014 in order to align the Articles of Association with the Companies Act, 2013 and Listing Agreement.

15. Extract of Annual Return

Extract of Annual Return of the Company pursuant to Section 134(3)(a) of the Companies Act, 2013 in Form MGT 9 is annexed herewith as Annexure III to this Report.

16. Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance and is voluntarily complying various provisions of clause 49 of the listing agreement.

17. Significant and Material Orders

There are no significant material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

18. Sexual Harassment

There were no cases reported during the year under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

19. The Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure IV to this Report.

20. Risk Management Policy

During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. There are no material risks which threaten the very existence of the company.

21. Vigil Mechanism

A Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at http:// www.powermech projects.in/investors.html

22. Corporate Social Responsibility

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link: http://www. powermechprojects.in/investors.html The Annual Report on CSR activities is annexed herewith marked as Annexure V

23. Subsidiaries, Associates & Joint Ventures

As on 31st March, 2015, company has two subsidiaries, i.e Hydro Magus Private Limited(HMPL) and Power Mech Industri Private Limited(PMIPL).

- Hydro Magus Private Limited (HMPL): Your Company holds 75% equity in HMPL. HMPL is providing O&M and AMC services to hydro power plants. HMPL has some inherent advantages being a subsidiary of Power Mech Projects Limited (PMPL) in getting projects as well as in completion with the support of PMPL.

- Power Mech Industry Private Limited (PMIPL): PMIPL which is 100% subsidiary of PMPL is yet to start its commercial operations. The proposed factory for manufacture, fabricate, re-fabricate, overhauling of spares, machinery parts relating to various power generation plants is coming up at the companies facility at Noida. PMIPL is expected to start its commercial operations in this financial year FY 2015-16.

- Power Mech CPNED Services (Hongkong) Holding Co., Limited: In order to provide comprehensive O&M solutions, your company has entered into a joint venture agreement dated December 1, 2014, with Chengdu Pengrun New Energy Development Company Limited ('CPNED'), a company registered under PRC laws for manufacturing and distribution of equipment and spare parts, including boilers, turbines and generators, for O&M projects in India.

Your company has received approval from Reserve Bank of India (RBI) to remit funds for acquisition of 5000 Ordinary Shares (50% stake) in M/s Power Mech - CPNED Services (Hongkong) Holding Co., Limited. Your Company is in the process of making the remittance and acquiring the stake in the Company

- MAS Power Mech Arabia: In order to have a strong presence in Saudi Arabia, the company entered into a MOU with local partners in Kingdom of Saudi Arabia (KSA) for the purpose of incorporating a 51% subsidiary in the name & style 'Mas Power Mech Arabia'. Your company has made an application to RBI seeking approval for remitting funds towards initial subscription of shares.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013 financial statements of the subsidiaries were consolidated. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed Form AOC-1 is appended as Annexure VI to the Board's report. The statement also provides the details of performance, financial positions of each of the subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.powermechprojects.in.

There are no companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the financial year 2014-2015.

24. Internal Financial Control

The Board has adopted policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial disclosures.

25. Auditors

Statutory Auditors

M/s. Brahmayya & Co, Chartered Accountants who were appointed as Statutory Auditors of the Company for a period of 5 years at the 15th AGM and whose appointment is subject to the ratification of members at every AGM, has confirmed their eligibility in terms of provisions of Section 141 of the Companies Act, 2013. Pursuant to the recommendation of the Audit Committee, your board recommends to ratify the appointment of M/s. Brahmayya & Co, Chartered Accountants as statutory auditors of the company for the financial year 2015-2016.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules there under, M/s. P.S. Rao & Associates, Practicing Company Secretaries was appointed to conduct the Secretarial Audit of the Company for the FY 2014-15. The Secretarial Audit Report for FY 2014-15 forms part of the Annual report as Annexure VII to the Board's report.

Internal Auditors

Your board based on the recommendation of the Audit Committee have re-appointed M/s. Ramesh & Co., Chartered Accountants, Hyderabad, as Internal Auditors of the Company.

26. Particulars of Employees

Pursuant to the Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement of particulars of employees is annexed as Annexure VIII

27. Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgement

Your Directors acknowledge the tremendous services rendered by the employees of the company at all the levels toward its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

The Board also acknowledges with thanks the contribution of contractors and consultants in the implementation of various projects of the company and also wishes to place on record their appreciation for the valuable and constructive suggestions received from the auditors.

For and on behalf of the Board of Directors

S. Kishore Babu

Chairman & Managing Director

DIN: 00971313

Place : Hyderabad

Date : July 7, 2015


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 15th Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2014.

Financial Performance

Your company has achieved a total income of - 119,877 Lakhs during the financial year 2013-14 as against previous year's total income of -93757 Lakhs, accounting for a top line growth of 27.86% and the growth of key parameters like EBIDTA and PAT at 30.85% and 36.31% respectively.

Financial Results

The financial performance of the company during the year ended 31st March, 2014 as compared with the previous financial year ended 31st March, 2013 are summarized below:

(Rupees in Lakhs)

PARTICULARS 2013-2014 2012-2013

Gross Revenue 119877.56 93757.78

Total Expenditure 103654.70 81360.44

Profit before Interest, Depreciation and Taxation 16222.86 12397.34

Less: Interest 2258.27 1512.09

Depreciation 3274.10 3347

Profit / (Loss) before Taxation 10690.49 7538.24

Less: Provision for Income Tax 3756.35 2497.77

Deferred Tax Liability/ (Asset) 103.04 29.12

Profit / (Loss) after Tax 6831.10 5011.35

Add: Balance brought forward from previous year 13576.66 8891.11

Profit available for appropriation 20407.76 13902.46

Appropriation

Transfer to General Reserve 350.00 200.00

Proposed Dividend on Equity 164.10 107.52

Provision for Tax on distributed profits (On Equity shares) 14.87 18.27

Balance of Profit carried forward to next year 19878.79 13576.66

Dividend

The Directors are pleased to recommend for the approval of the members, a dividend at the rate of 15% being - 1.5/- per equity share on paid up value of - 10/- per equity share for the FY 2013-14

Transfer To Reserves

The Company proposes to transfer -350.00 lakhs to the General Reserve out of the amount available for appropriations and an amount of - 19878.79 lakhs is proposed to be retained in the Profit and Loss account.

Operational Performance

India is the fourth largest economy in the world and has a total installed capacity (excluding renewable energy) of 212 GW in fiscal 2014 an increase of 70GW from fiscal 2010, representing a CAGR of around 10%. This is in addition of around 43,300 MW of captive power capacity that is also connected to the grid, as on March 2013. An estimated -6.6 trillion of investments are projected to be made in power sector over the next 5 years (2013-14 to 2017-18).

Power Mech has executed an aggregate tonnage of approximately 3,50,000 metric tons in the fiscal year 2014 and were engaged in Erection Works contracts in fiscal year 2012 through fiscal 2014 for boilers aggregating 8,290 MW & turbines 15,790 MW. At present the company is providing AMC services to 19 power plants with an aggregate unit capacity of 24,465 MW. The civil division is executing projects in India & Yemen and maintaining a sustainable growth.

The overall performance of the company is the outcome of collective and dedicated service rendered by staff, management, associates, customers & financial institutions.

Changes In Share Capital

The company during the year had issued and allotted 187,500(One Lakh Eighty Seven Thousand Five Hundred) Equity Shares of -10/-(Rupees Ten) each at a premium of -190/-(Rupees One Hundred and Ninety) per share on 26th November, 2013 to IL&FS Trust Company Limited acting in its capacity as trustees of Business Excellence Trust - India Business Excellence Fund pursuant to the exercise of conversion option vide their notice dated 25.11.2013 for conversion of 375 Compulsorily Convertible Debentures ('CCD') of face value of Rs.100,000 (Rupees One Lac only).

Further in view of exceptional growth in the last decade and completion of 15 years, the board in their meeting held on 13th May, 2014, proposed to reward the share holders for their long standing relation with the company by issuing bonus shares in the ratio of 10:1.2 (i.e. 1.2 Shares for every 10 Shares held) by capitalizing the Reserves of the Company.

Accordingly the board in their meeting held on 26th June, 2014 issued and allotted 10,80,000 Bonus Shares by capitalizing the reserves of the company.

The capital structure of the company after taking into allotments stand as follows:

Authorized Capital Rs,-260,000,000

Issued / subscribed / called-up & Paid-up Rs,120,202,640

Directors

Smt. S. Lakshmi, Director, retires at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Sri G.D.V. Prasad Rao & Sri Mukul Lai Sah, Independent Directors of the Company, are proposed to be appointed as Independent Directors not liable to retire by rotation for a term of 5 years as provided under section 149 of the Act.

Sri Thiagarajan Sankaralingam & Sri Amitabha Guha were appointed as Additional Directors (Independent Directors) of the company with effect from 26.06.2014 and as such their term ceases at the ensuing AGM. The Company received a notice in writing from the members respectively under section 160 of the Companies Act, 2013 proposing their candidature for the directorship of the company for a period of 5 years with effect from 26.06.2014.

The relevant resolutions proposing the above appointments for the approval of the shareholders forms part of the notice of the AGM.

Sri G. Srinivasulu, Sri M. Jagan Mohan & Sri A.R.N Rao, have resigned from the board with effect from 26.06.2014. The Board conveys its deep sense of appreciation for the services rendered by them during their tenure as directors of the company.

Alteration to the Articles of Association of the Company

The Articles of Association of the Company were altered twice during the year on 5th July, 2013 and 22nd January, 2014 in order to bring them in line with the amendments to subscription and shareholders agreement dated 19th November, 2009.

Subsidiaries

Hydro Magus Private Limited: Your Company holds 51 % equity in Hydro Magus Private Limited. During the year under review the Company commenced its operations and achieved a gross turnover of - 6.17 Crores and profit after tax- 21.27 lakhs. The Company has some inherent advantages being a subsidiary of Power Mech Projects Limited (PMPL) in getting projects as well as in completion with the support of PMPL.

Power Mech Industry Private Limited: Your Company acquired complete control of this company by acquiring 100% shares pursuant to the takeover agreement dated 17.10.2013. The Company is in the process of commencing its commercial operations.

Power Mech Projects Limited FZE: The subsidiary was closed during the year under review. Till the date of its operations, the Company generated revenue of 5,095,158 AED and paid a dividend of - 163.02 Lakhs.

Information pursuant to section 212 of the Companies Act, 1956, relating to the subsidiary company, is annexed to this report. A copy of the subsidiary's accounts together with the Directors Report and Auditors Report are also attached to the Company's Balance Sheet.

Fixed Deposits

The Company has neither accepted nor renewed any deposits falling with in the purview of section 58A of the companies Act, 1956 read with the companies (Acceptance of deposits) Rules, 1975 from the public during the year under review.

Audit Committee

The Company constituted a Qualified and Independent Audit Committee comprising of two Non-Executive Independent Directors and one Non-Executive non-independent director in accordance with the provisions of the Companies Act.

S. no Name Designation

1 GDV Prasada Rao Chairman

2 Rakesh Sony Member

3# Amitabha Guha Member

# Appointed as member w.e.f 26.06.2014

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of two Independent Non-Executive Directors and one Non-Executive non-independent director. Pursuant to change in the composition of the board the Nomination and Remuneration committee was reconstituted w.e.f 26.06.2014. The composition of the Remuneration Committee is as follows:

S. no Name Designation

1# T Sankaralingam Chairman

2 Rakesh Sony Member

3 GDV Prasada Rao Member

# Appointed as Chairman of the committee w.e.f 26.06.2014

The Nomination and Remuneration Committee reviews the remuneration package payable to Executive Director(s) and Executives in the top level Management of the Company and gives its recommendation to the Board and acts in terms of reference of the Board from time to time.

Stakeholders Relationship Committee

The Board of Directors constituted w.e.f 26.06.2014, Stakeholders Relationship Committee to look into Shareholders grievances:

S. no Name Designation

1 GDV Prasada Rao Chairman

2 Sajja Lakshmi Member

3 Mukul Lai Sah Member

Corporate Social Responsibility Committee

The Board of Directors had at its meeting held on 26.06.2014 constituted the CSR Committee in accordance with the provisions of Section 135 of the Act.

The composition of the CSR Committee is given hereunder:

S. no Name Designation 1 Sajja Kishore Babu Chairman

2 GDV Prasada Rao Member

3 Sajja Lakshmi Member

Auditors

M/s. Brahmayya & Co, Chartered Accountants the Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting & being eligible, offer themselves for re-appointment for a term of five years in accordance with Section 139 of the Companies Act, 2013. The Board recommends their re-appointment.

Directors' Responsibility Statement

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Director's Responsibility Statement, it is hereby confirmed that,

1) In the preparation of annual accounts for the Financial Year ended 31st March 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014 and of the profit of the Company for the year ended on that date;

3) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4) The Directors have prepared the annual accounts of the company on a 'going concern' basis.

Particulars of Employees

The particulars to be mentioned as per section 217(2A) of the Companies Act, 1956 read with Companies Act (Particulars of Employees) Rules, 1975 is annexed as Annexure 1 to this report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure 2 and forms part of this report.

Corporate Social Responsibility

Power Mech Foundation was initiated as part of corporate Social Responsibility to Power Mech Projects Ltd, by the founder of the company Mr. S. Kishore Babu. The foundation is committed to inclusive and sustainable socio-economic development with greater thrust on:

- Education

- Community Development

- Health Management & Medical Aids

- Social Welfare

- Orphanages & Old-Age Homes

- Environment Protection

- Disaster/ Calamity Management

- Empowerment & Livelihoods

Acknowledgement

Your Directors acknowledge the tremendous services rendered by the employees of the company at all the levels toward its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

The Board also acknowledges with thanks the contribution of contractors and consultants in the implementation of various projects of the company and also wishes to place on record their appreciation for the valuable and constructive suggestions received from the auditors.

For and on behalf of the Board of Directors

Sd/-

S. Kishore Babu

Chairman & Managing Director

Date : 26.06.2014

Camp : Hyderabad

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