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.
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.
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.
⢠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.
⢠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.
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.
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.
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.
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.
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.
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 |
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
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.
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.
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
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
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.
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
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.
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.
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
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
DIRECTORSâ 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.
AUDITORSâ 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.
DIRECTORSâ 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 âWhistle 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 Companyâs 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 (âCPNEDâ), 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/JVâs. 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 & JVâs on its website www.powermechprojects.com. The annual accounts of the Subsidiary Companies, JVâs 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 & JVâs 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 Auditorâs 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.
DIRECTORSâ 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 âWhistle Blower Policyâ 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 Companyâs 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 Companyâs 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 poorâs, health management and medical aids for the childrenâs 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 Governmentâs 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