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Power Mech Projects Ltd.

BSE: 539302 | NSE: POWERMECH |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE211R01019 | SECTOR: Infrastructure - General

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Annual Report

For Year :
2021 2018 2017 2016 2015 2014

Director’s Report

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, 2021.

FINANCIAL RESULTS

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

('' in Cr)

Sl.

Particulars

Standalone

Consolidated

No.

Current

Previous

Current

Previous

Year

Year

Year

Year

FY 20-21

FY 19-20

FY 20-21

FY 19-20

1

Revenue from Operations

1754

2045

1884

2165

2

Other income

20

9

16

9

3

Total Income

1774

2054

1900

2174

4

Expenditure

1709

1798

1842

1894

5

Profit before interest, depreciation and tax

65

256

58

280

6

Depreciation

33

36

36

39

7

Interest and Finance Charges

78

72

79

74

8

Share of Profit from JV and Associates

-

-

(3)

1

9

Profit before tax

(46)

148

(60)

168

10

Provision for taxes (including DTL)

(11)

37

(11)

37

11

Profit after tax

(35)

111

(49)

131

12

Profit attributable to equity holders of the parent before OCI

(35)

111

(46)

131

13

Other Comprehensive Income

2

1

1

3

14

Total Comprehensive Income

(33)

112

(48)

134

15

Profits attributable to equity holders of parent after OCI

(33)

112

(45)

134

16

Dividend for the year

-

1.47

-

1.47

17

Reserves (Excluding Revaluation Reserve)

837

871

890

936

18

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

(23.53)

75.23

(31.02)

89.23

19

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

579

603

615

647

OPERATING RESULTS AND BUSINESS

Your Company has achieved operational turnover of '' 1,754 Cr and Loss of '' 35 Cr during the FY 20-21 as against previous year operational turnover of ''2,045 Cr and profit after Tax of ''111 Cr respectively.

Further, your Company has achieved Colsolidated operational turnover of '' 1,884 and loss of ''46 Cr for the FY 20-21 as against previous year operational turnover of ''2,165 Cr and profit after tax of ''131 Cr respectively.

DIVIDEND

Your Directors did not recommend any dividend for the FY 20-21.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATES

As on 31st March, 2021 your Company had 8 (Eight) 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, 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).

SUBSIDIARIES

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

• Power Mech Industri Private Limited: A wholly-owned subsidiary of Power Mech. It undertakes major job works through its state-of-the-art workshop in Noida. The machines of the workshop are working to full steam, undertaking critical jobs, meeting

customers'' satisfaction and proceeding with further expansion in line with the need in the industry

Power Mech BSCPL Consortium Private Limited:

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

Power Mech SSA Structures Private Limited:

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

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

• 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

• 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

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

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

ASSOCIATES

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

TRANSFER TO RESERVES

The Board do not propose to transfer any amount to the reserves for the fiscal 2021.

CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

RELATED PARTY TRANSACTIONS

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

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

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

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

STATUTORY AUDITORS

The Shareholders in their meeting held on 25.09.2019, approved the appointment of M/s.K.S.Rao & Co., Chartered Accountants as the Statutory Auditors of the Company to hold office till the conclusion of 25th Annual General Meeting.

AUDITORS'' REPORT

There are no qualifications, reservations or adverse remarks made by M/s.K.S.Rao & Co., Chartered Accountants, Statutory Auditors, in their report for the financial year ended 31st March, 2021.

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

INTERNAL AUDITORS

M/s. Ramesh & Co., Chartered Accountants, resigned as the Internal Auditors of the Company with effect from 13th November, 2020.

The Board of Directors based on the recommendation of the Audit Committee, at the meeting held on 13th November, 2020, appointed M/s. JSS Pro & Co., Chartered Accountants, as the internal auditors for the remaining part of the fiscal 2021.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has reappointed M/s. P.S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for fiscal 2021.

The Secretarial Audit Report for the FY 20-21 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 QUALIFICATIONS MADE BY THE SECRETARIAL AUDITORS IN THEIR REPORT

Qualification

Reply

The Company could not appoint Independent Women Director as required under the provisions of Regulation 17(1) of SEBI(LODR) Regulations, 2015 with effect from 1st April 2020 to till 27th June, 2020

The Company was in the process of shortlisting and finalizing the right candidate for the post of Women Director under Independent Category. However, due to the unprecedented pandemic, Covid-19 and other restrictions associated with it, the process couldn''t be completed within time and hence got delayed.

The Company applied for waiver of fine to both NSE and BSE. BSE has waived off the fine and since NSE did not accept the waiver request, the fine was paid.

One of the Person Acting in Concert (PAC) of Promoter Group has failed to submit disclosure under regulation 7(2) of SEBI(Prohibition of Insider trading) Regulations, 2015

Dealing in the scrip was inadvertently done by the PAC.Upon intimation, the respective PAC had deposited the gain to the Investors Education and Protection Fund of SEBI.

DIRECTORS'' & KMP Reappointments

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

Based on the recommendation of the Nomination and Remuneration Committee, Mr.S.Kishore Babu, Managing Director was re-appointed by the Board of Directors of

the Company at the Board meeting held on 12th February, 2021 for a period of 5 years w.e.f 01st April, 2021, subject to the approval of the shareholders in the annual general meeting.

Mr.Vivek Paranjpe, Independent Director was re-appointed by the Board at its meeting held on 07th August, 2021 for a period of 5 years, subject to the approval of the members in the annual general meeting and Ms. Lasya Yerramneni, Independent Director was also re-appointed by the Board at the meeting held on 17th June, 2021 for a period of five years, subject to the approval of the members in the annual general meeting.

Accordingly, resolutions seeking approval of the shareholders for their re-appointment forms part of the notice of the 22nd 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 familiarisation program for the Independent Directors are provided in the Corporate Governance Report and also placed on the website of the Company www.powermechprojects.com

BOARD MEETINGS

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

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

COMMITTEES OF BOARD OF DIRECTORS

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

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

Name of the Committees

Composition of the Committees

Audit Committee

1. Mr. G.D.V. Prasada Rao (Chairman)

2. Mr. T Sankaralingam;

3. Mr. Rajiv Kumar

Nomination and

Remuneration

Committee

1. Mr. Vivek Paranjpe (Chairman);

2. Mr. T. Sankaralingam;

3. Mr. G.D.V. Prasada Rao

Name of the Committees

Composition of the Committees

Corporate Social

Responsibility

Committee

1. Mr. S. Kishore Babu (Chairman);

2. Mrs. S. Lakshmi;

3. Mr. G.D.V. Prasada Rao.

Stakeholders

Relationship

Committee

1. Mr. M Rajiv Kumar (Chairman);

2. Mrs. S. Lakshmi;

3. Mr. G.D.V. PrasadaRao.

Risk Management Committee

1. Mr. GDV Prasada Rao (Chairman)

2. Mr. M.Rajiv Kumar

3. Mr. S.Kishore Babu

Investment

Committee

1. Mr. T Sankaralingam (Chairman);

2. Mr. G.D.V. Prasada Rao;

3. Mr. M. Rajiv Kumar

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

FIXED DEPOSITS

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

CHANGE IN NATURE OF BUSINESS:

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

MATERIAL CHANGES AND COMMITMENTS:

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

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

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

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge

and belief and according to the information and explanation obtained by them,

i. in the preparation of the annual accounts for the financial year ended 31st March, 2021, 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 20-21 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 20-21 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 effective.

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 formalised the process and institutionalised ''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 Company has framed a dividend distribution policy and the same is annexed herewith as annexure 5 This policy is also hosted on the Company ''s website, www. powermechprojects.com and the link for the same is https:// www.powermechprojects.com/investor-relations

RISK MANAGEMENT

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

www.powermechprojects.com/investor-relations

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2021 is 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-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 '' 14,71,07,640/- divided into 1,47,10,764 equity shares of '' 10/- each.

PARTICULARS OF EMPLOYEES

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

BOARD EVALUATION

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CORPORATE GOVERNANCE

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

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

BUSINESS RESPONSIBILITY REPORT (BRR)

Business Responsibility reporting 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.

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-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

POLICY ON DIRECTOR''S APPOINTMENT ANDREMUNERATION

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

ACKNOWLEDGMENTS

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

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

For and on behalf of the Board of Directors of

Sd/-

S Kishore Babu

Place: Hyderabad Chairman & Managing Director

Date: 07th August, 2021 DIN: 00971313

Director’s Report