m) Provisions, Contingent Liabilities and Contingent
assets
Provisions are recognized only when there is a present
obligation as a result of past events and when a reliable
estimate of the amount of obligation can be made. Where
the effect of time value of money is material, the amount
of provisions is the present value of the expenditure
required to settle the obligation. These estimates are
reviewed at each reporting date and adjusted to reflect
the current best estimates.
Contingent liability is disclosed for (i) Possible obligation
which will be confirmed only by future events not
wholly within the control of the Company or (ii) Present
obligations arising from past events where it is not
probable that an outflow of resources will be required to
settle the obligation or a reliable estimate of the amount
of the obligation cannot be made. The company does
not recognize contingent liabilities but the same are
disclosed in the Notes.
Contingent assets are not recognized in the financial
statements since this may result in the recognition of
income that may never be realized.
n) Dividends
Provision for dividends payable (including income tax
thereon) is accounted in the books of account in the
year when they are approved by the share holders at the
Annual General Meeting.
o) Earnings per share
Earnings per share is calculated by dividing the net
profit or loss for the year after tax attributable to equity
shareholders by the weighted average number of equity
shares outstanding during the period. For the purpose
of calculating diluted earnings per share, the net profit
or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding
during the period are adjusted for the effects of all dilutive
potential equity shares. Further, if the number of equity
shares increases as a result of bonus issue, the above
calculations are adjusted retrospectively for the previous
year figures also.
p) Leases
The Company's leased assets primarily consist of
buildings. The Company assesses whether a contract
contains a lease, at inception of a contract. A contract is,
or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified
asset, the Company assesses whether: (i) the contract
involves the use of an identified asset (ii) the Company
has substantially all of the economic benefits from use
of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.
At the date of commencement of the lease, the
Company recognizes a right-of-use (ROU) asset and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term of
12 months or less (short-term leases) and low value
leases. For these short-term and low-value leases, the
Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the
lease. The ROU assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses. ROU assets are depreciated from the
commencement date on a straight-line basis over the
shorter of the lease term and useful life of the underlying
asset. The lease liability is initially measured at amortised
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates. Lease liability
and ROU assets have been separately presented in the
Balance Sheet and lease payments have been classified
as financing cash flows.
q) Cash flow statement
Cash flows are reported using the indirect method,
whereby the profit before tax is adjusted for the effects
of transactions of non-cash nature and items of income
or expenses associated with investing and financing
activities. The cash flows are segregated into Operating,
investing and financing activities.
r) Financial instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.
Initial recognition:
The company recognizes financial assets and liabilities
when it becomes a party to the contractual provisions
of the instruments. All financial assets and liabilities are
recognized at fair value on initial recognition. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and liabilities (other than the
financial assets and liabilities at fair value through profit
and loss) are added to or deducted from the fair value
of financial assets and liabilities, as appropriate, on
initial recognition. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and liabilities at fair value through profit or loss are
recognized immediately in profit or loss.
However, trade receivables that do not contain a
significant financing component are measured at
transaction price.
Subsequent measurement:
i) Financial assets carried at amortised cost:
A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to collect
contractual cash flows, and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
(ii) Financial assets at fair value through other
comprehensive income.
A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Further, in cases where the Company has made an
irrevocable election based on its business model,
for its investments which are classified as equity
instruments, the subsequent changes in fair value
are recognized in other comprehensive income.
(iii) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the
above categories is subsequently fair valued through
profit or loss.
De-recognition of financial asset
The company de-recognises financial assets when
the contractual right to the cash flows from the asset
expires or when it transfers the financial asset and
substantially all the risks and rewards of ownership
of the asset to another party.
Impairment of financial assets:
The company applies expected credit loss (ECL)
model for measurement and recognition of loss
assets in case of trade receivables and other financial
assets. For trade receivables, the company applies
simplified approach which requires expected lifetime
losses to be recognized from initial recognition of
receivables. The company uses historical default rates
applied on the ageing of receivables to determine
loss allowance on portfolio of trade receivables. At
every reporting date, these historical default rates
are reviewed and changes in the forward looking
estimates are analyzed. In case of other assets, the
company determines if there has been a significant
increase in credit risk of the financial asset since
initial recognition. If the credit risk has not increased
significantly, an amount equal to 12-month ECL
is measured and recognized as a loss allowance.
However, if the credit risk has increased significantly,
an amount equal to lifetime ECL is measured and
recognized as a loss allowance. Subsequently, if the
credit quality of the financial asset improves such that
there is no longer a significant increase in credit risk
since initial recognition, the company reversed the
impairment loss recognized earlier.
(iv) Financial liabilities
Financial liabilities are subsequently carried at
amortised cost using the effective interest method.
The effective method is a method of calculating
the amortisation cost of a financial liability and
of allocating interest expense over the relevant
period. The effective interest is the rate that exactly
discounts estimated future cash payments through
the expected life of the financial liability to the net
carrying amount on initial recognition.
De-recognition of financial liability
The company de-recognises financial liabilities
when the company's obligations are discharged,
cancelled or expired. The difference between the
initial carrying amount of the financial liabilities
and their redemption value is recognized in the
statement of profit and loss over the contractual
terms using the effective interest method
Notes:
1) Term loans taken by the company for purchase of Fixed assets are secured by way of hypothecation on respective assets for
which loans were availed.
2) Working Capital Loans from banks are secured by way of first charge on Property, Plant and Equipment of the company both
present and future, excluding those assets against which charge was given to equipment financiers.
3) None of the property plant & equipment for acquired / transfered by way of business combinations
4) The carrying values of any of the assets does not include any changes made on account of revaluation as on date
of balance sheet.
5) The title deeds of immovable properties were held in the name of the company.
6) No proceedings have been initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 and rules made thereunder.
f) The Company is not a subsidiary Company to any of the Company. The Company had 14 Indian subsidiary Companies Hydro
Magus Private Limited , Power Mech Industri Private Limited, Power Mech BSCPL Consortium Private Limited , Aashm Avenues
Private Limited, Power Mech SSA Structures Private Limited, Power Mech Environmental Protection Private Limited, Energy
Advisory and Consulting Services Private Limited, KBP Mining Private Limited,Kalyaneswari Tasra Mining Private Limited,PMTS
Private Limited,Vindyavasini Mining Works LLP, Vanshika Mining Works LLRKailash River Bed Minerals LLP, Velocity Mining
Works LLP and 3 foreign subsidiary companies Power Mech Projects (BR )FZE, Power Mech Projects Limited LLC and Power
Mech Arabia Contracting Company . None of the shares of the Company are held by its subsidiary Companies.
The Company had 14 Indian Joint venture's M/S POWER MECH-M/S ACPL JV, PMPL-STS JV, PMPL-KHILARI Consortium
JV, PMPL-SRC INFRA JV(Mizoram), PMPL-SRC INFRA JV(Hassan), PMPL-BRCC INFRA JV, PMPL-PIA JV, PMPL-KVRECPL
Consortium JV, RITES-PMPL JV, SCPL-PMPL JV, POWER MECH-TAIKISHA JV,PMPL-RSVCPL JV,PMPL-UPPER BURHNER
JV,POWER MECH - KMV JV and 2 foreign Joint venture Companies GTA Power Mech Nigeria Limited and GTA Power Mech
DMCC. None of the shares of the Company are held by its joint venture Companies.
The Company also had 2 Foreign Associate companies MAS Power Mech Arabia and Power Mech LLC Qatar. None of the
shares of the Company are held by its associate Companies.
g) Aggregate number of bonus shares issued during the period of 5 years immediately preceding the reporting date:
During the year, the company has allotted Nos.1,58,08,146 Equity shares of H 10 /- each as fully paid-up bonus shares to
the existing shareholders in the ratio of 1:1, by capitalising H 15.81 cr. /- out of securities Premium, in accordance with the
provisions of Sec 63 of the companies Act, 2013.
h) No shares were issued pursuant to a contract without payment being received in cash.
b. Defined benefit plans
The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for
a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of
an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five
continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.
These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk
and salary risk.
Risk Management:
Investment risk - The probability or likelihood of occurrence of losses relative to the expected return on any
particular investment.
Interest rate risk - The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an
increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.
Longevity risk - The present value of defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants
will increase the plan's liability.
Salary risk - The present value of the defined benefit plan is calculated with reference to the future salaries of participants
under the plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.
b) Overdraft facility from banks is secured against fixed deposits with banks.
c) All the above loans are guaranteed by Managing Director and a director in their personal capacities.
d) The above loans carries interest varies from 8.35 % to 10.10 %.
e) Registration, Modification and Satisfaction of charges relating to the loans sancationed/renewed during the year under
review, had been filed with the Registrar of Companies, within the prescribed time or within the extended time alongwith the
payment of additional fees.
f) The company has availed working capital facilities against security of current assets. The revised quarterly returns and
statements comprising stock statements, payables and receivables (including retention and security deposit amounts) filed
by the company with the banks subsequent to the quarterly review of accounts are in agreement with the unaudited books
of the company of the respective quarters and no material discrepancies have been noticed.
Note: 33 Fair value hierarchy
The fair value of financial instruments as referred to above note have been classified into three categories depending on the inputs
used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identified assets or
liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]
The categories used are as follows:
Level 1: Quoted prices for identified instruments in an active market.
Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and
Level 3: Inputs which are not based on observable market data.
This note provides information about how the Company determines fair values of various financial assets and financial liabilities.
Fair value of the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis.
The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables,
trade payables and short term borrowings at carrying value because their carrying amounts approximate the fair value because of
their short term nature. Difference between carrying amounts and fair values of long term borrowings, other financial assets and
financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.
Note: 34 Financial Risk Management
The Company's financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company's financial
assets comprise mainly of investments, cash and cash equivalents, trade and other receivables.
The Company's business activities are exposed to a variety of financial risks namely credit risk, liquidity risk and foreign currency risk.
The Company's senior management has the overall responsibility for establishing and governing the Company's risk management
framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to
set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes
in the policy accordingly. The key risks and mitigating actions are also placed before the Board of Directors of the Company.
A. Credit Risk
Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. Credit risk
encompasses both the direct risk of default and the risk of deterioration of credit worthiness. Credit risk is controlled by
monitoring and interaction with the customers on a continous basis.
Financial instruments that are subject to concentration of credit risk principally consists of trade receivables, retentions,
deposits with customers and unbilled revenue.
Receivables from customers
Concentration of credit risk with respect to trade receivables are limited since major customers of the company are from
public sector and accounts for 25% of its trade receivables. All trade receivables are reviewed and assessed for default on a
monthly basis. On historical experience of collecting receivables credit risk is low.
Other financial assets
The Company maintains exposure in cash and cash equivalents, term deposits with banks held as margin money against
guarantees and retention money and security deposits with customers which are to be released on fulfillment of conditions
as specified in the work orders.
The Company's maximum exposure of credit risk as at March 31, 2025, March 31, 2024 is the carrying value of each class of
financial assets.
The company does not have any risk of currency fluctuation since it's entire liability in foreign currency is covered by
its receivables.
The unhedged exposures are naturally hedged by future foreign currency earnings linked to foreign currency.
The uncovered amount if any, is subject to foreign currency fluctuations.
C. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective
of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due. Also, the Company has availed credit limits with banks. The Company maintained a cautious liquidity
strategy, with a positive cash balance throughout the year ended March 31, 2025 and March 31, 2024. Cash flow from
operating activities provides the funds to service the financial liabilities on a day to day basis.
The Company regularly maintains the rolling forecasts to ensure that it has sufficient cash on an on-going basis to meet
operational needs. Any short-term surplus cash generated, over and above the amount required for working capital
management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any
excess is invested in interest bearing term deposits.
The company is repaying its borrowings as per the schedule of repayment and no amount was pending for remittance
beyond its due date.
In case of borrowings from banks, the maturity pattern has been given under Note no. 15.
D. Capital Management
Equity share capital and other equity are considered for the purpose of Company's capital management.
The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to
shareholders. The capital structure of the Company is based on Management's judgment of its strategic day-to-day needs
with a focus on total equity so as to maintain investor, creditors and market confidence.
C) Reconciling the amount of revenue recognized in the statement of profit and loss with the contracted price :
There is no difference in the contract price negotiated and the revenue recognized in the statement of profit and loss for the
current year. There is no significant revenue recongnized in the current year from performance obligations satisfied in the
previous periods .
D) Performance obiligation :
The transaction price allocated to the remaining performance obligations is H 13,207 Cr which will be recognized as revenue
over the respective project durations. Generally the project duration of contracts with customers will be 1-3 years.
48. Dividend:
The board of Directors at its meeting held on 22.05.2025 have recommended a final dividend of H 1.25/- each per share of face
value of H 10/- each for the financial year ended 31st March, 2025. The above is subject to approval at the ensuing Annual General
Meeting of the Company and hence not recognised as a liability.
(ii) Details of investments made and guarantees given under Section 186 of the Companies Act, 2013 are disclosed in Note 6
and Note 36 respectively.
(iii) All the above loans and guarantees were given for carrying on their business activities.
50. Other disclosures: Additional regulatory and other information as required by the Schedule III to the
Companies Act 2013
(a) Relationship with Struck off Companies
The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or
Section 560 of Companies Act, 1956 considering the information available with the Company.
(b) Compliance with number of layers of companies
The Company do not have any parent company and accordingly, compliance with the number of layers prescribed under
clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable for
the year under consideration.
(c) Scheme of arrangements
There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the
Companies Act, 2013 during the year.
(d) Advance or loan or investment to intermediaries and receipt of funds from intermediaries
The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources
or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding
(whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in other persons
or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any
guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
The company has also not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(e) Undisclosed Income
The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or
disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.
(f) Details of Crypto Currency or Virtual Currency
The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence, disclosures
relating to it are not applicable.
51. Consequent to the search operations conducted by the Income Tax Department in the premises of parent company under
Section 132 of the Income Tax Act, 1961 in the month of July, 2022, the parent company received notices under section 148 of
the Act for filing return of Income for the AY 2016-17 to AY 2022-23. In response to the said notices, the company filed return of
income by disclosing the income as agreed. Assessments u/s 148 were completed for all the years. Pursuant to the completion of
assessments, the company has made a provision of H 7.65 Cr (including interest) for the year ended 31.03.2025 and management
has decided not to prefer any appeals against the said orders. The provision as made for the year ended 31.03.2025 is in addition
to the provision already made aggregating to H51.38 crores (including interest) for the financial year ended 31.03.2024.
52. Previous year figures have been regrouped wherever necessary to confirm to current year classification.
The accompanying notes 32-52 form an integral part of the financial statements.
As per our report of even date For and on behalf of the Board
For BRAHMAYYA & CO Sd/-
Chartered Accountants Sajja Kishore Babu
Firm's Registration Number: 000513S Chairman and Managing Director
DIN:(00971313)
Sd/- Sd/- Sd/-
(Karumanchi Rajaj) N. Nani Aravind M. Raghavendra Prasad
Partner Chief Financial Officer Company Secretary
Membership Number: 202309
Place: Hyderabad
Date: 22.05.2025
UDIN: 25202309BMIMBR1025
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