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Power Mech Projects Limited Capital/Financing Update 2024

Nov 11, 2024

60676_rns_2024-11-11_b73d50d7-7bd7-4bd3-a974-0b8bb7890b73.pdf

Capital/Financing Update

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Date: November 11, 2024

To To Listing Department Dept. of Corp. Services National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers Bandra Kurla Complex, Dalal Street Bandra (E), Mumbai – 400 051 Mumbai- 400001 Through: NEAPS Through: BSE Listing Centre Symbol/Security ID: POWERMECH Security Code: 539302

Dear Sir/Madam,

Sub: Monitoring Agency Report for the quarter ended September 30, 2024 **

Pursuant to Regulation 32(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with regulation 173A (4) of the SEBI ( Issue of Capital and Disclosure Requirements) Regulations,2018, please find enclosed herewith, Monitoring Agency report issue by CARE Ratings Limited, for the quarter ended September 30, 2024, with regard to the utilization of proceeds of the QIP of the Company.

A copy of this disclosure is also being uploaded on the website of the Company at www.powermechprojects.com

Kindly take the same on record and acknowledge the receipt.

Thanking you. Yours faithfully, For Power Mech Projects Limited

Digitally signed by Sajja Sajja Kishore Kishore Babu Babu Date: 2024.11.11 19:21:32 +05'30' Kishore Babu Sajja Chairman and Managing Director DIN: 00971313

Encl: as above

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No. CARE/HRO/GEN/2024-25/1035

The Board of Directors

Power Mech Projects Limited

Plot No. 77, Jubilee Enclave, Opp. Hitex Arcade, Madhapur, Hyderabad Telangana 500081

November 11, 2024

Dear Sir/Ma’am,

- Monitoring Agency Report for the quarter ended September 30, 2024 in relation to the QIP of Power Mech Projects Limited (“the Company”)

We write in our capacity of Monitoring Agency for the QIP Issue for the amount aggregating to Rs.350 crore of the Company and refer to our duties cast under 173A of the Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations.

In this connection, we are enclosing the Monitoring Agency Report for the quarter ended September 30, 2024 as per aforesaid SEBI Regulations and Monitoring Agency Agreement dated October 18, 2023.

Request you to kindly take the same on records.

Thanking you,

Yours faithfully,

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Puja Jalan

Director

[email protected]

CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

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Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

CIN-L67190MH1993PLC071691

Page 1 of 9

Report of the Monitoring Agency

Name of the issuer: Power Mech Projects Limited For quarter ended: September 30, 2024 Name of the Monitoring Agency: CARE Ratings Limited (a) Deviation from the objects: Not applicable

  • (b) Range of Deviation: Not applicable

Declaration:

We declare that this report provides an objective view of the utilization of the issue proceeds in relation to the objects of the issue based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable. The MA does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives. This Report is not intended to create any legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said information. The views and opinions expressed herein do not constitute the opinion of MA to deal in any security of the Issuer in any manner whatsoever. Nothing mentioned in this report is intended to or should be construed as creating a fiduciary relationship between the MA and any issuer or between the agency and any user of this report. The MA and its affiliates also do not act as an expert as defined under Section 2(38) of the Companies Act, 2013.

The MA or its affiliates may have credit rating or other commercial transactions with the entity to which the report pertains and may receive separate compensation for its ratings and certain credit related analyses. We confirm that there is no conflict of interest in such relationship/interest while monitoring and reporting the utilization of the issue proceeds by the issuer, or while undertaking credit rating or other commercial transactions with the entity.

We have submitted the report herewith in line with the format prescribed by SEBI, capturing our comments, where applicable. There are certain sections of the report under the title “Comments of the Board of Directors”, that shall be captured by the Issuer’s Management / Audit Committee of the Board of Directors subsequent to the MA submitting their report to the issuer and before dissemination of the report through stock exchanges. These sections have not been reviewed by the MA, and the MA takes no responsibility for such comments of the issuer’s Management/Board.

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Signature:

Name and designation of the Authorized Signatory: Puja Jalan Designation of Authorized person/Signing Authority: Director

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CARE Ratings Limited

Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

CIN-L67190MH1993PLC071691

Page 2 of 9

1)Issuer Details:

Name of the issuer Name of the promoter Industry/sector to which it belongs

: Power Mech Projects Limited : Mr. Sajja Kishore Babu : Construction and Mining

2)Issue Details

Issue Period Type of issue (public/rights) Type of specified securities IPO Grading, if any Issue size (in crore)

: October 18, 2023 to October 23, 2023 : Qualified Institutions Placements : Equity shares : Not applicable : Rs.350 crore

3)Details of the arrangement made to ensure the monitoring of issue proceeds:

Particulars Reply Source of information /
certifications
considered by
Monitoring Agency for
preparation of report		 Comments of the
Monitoring Agency		 Comments
of the
Board of
Directors
Whether all utilization is as per the
disclosures in the Offer Document?		 Yes Chartered
Accountant
certificate*		 The net proceeds of QIP issue
is Rs.343.40 crore. In line
with offer document, the
company utilized Rs.103.40
crore towards prepayment of
working capital debt and
general corporate purposes.
As per the letter of offer, the
remaining amount of Rs.240
crore has to be utilized
towards installation of coal
washery by financial year
2026.
Whether shareholder approval has
been obtained in case of material
deviations#
from
expenditures
disclosedinthe Offer Document?		 Not applicable as there is no
deviation
from
expenditures
disclosed in the offer document		 Chartered
Accountant
certificate*		 Not applicable
Whether the means of finance for the
disclosed objects of the issue have
changed?		 Not applicable as there is no
change		 Not applicable Not applicable
Is
there
any
major
deviation
observed over the earlier monitoring
agency reports?		 No,
there
are
no
deviations
observed from last monitoring
agency report		 Not applicable Not applicable

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CARE Ratings Limited

Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

CIN-L67190MH1993PLC071691

Page 3 of 9

Particulars Particulars Particulars Reply Reply Source of information /
certifications
considered by
Monitoring Agency for
preparation of report		 Source of information /
certifications
considered by
Monitoring Agency for
preparation of report		 Source of information /
certifications
considered by
Monitoring Agency for
preparation of report		 Comments of the
Monitoring Agency		 Comments of the
Monitoring Agency		 Comments of the
Monitoring Agency		 Comments
of the
Board of
Directors
Whether all Government/statutory
approvals related to the object(s)
have been obtained?		 The company is yet to receive
government,
regulatory
and
statutory
approvals
for
the
installation of coal washery for
TasraMDO project.		 Mail correspondence from the
company		 Delay
in
the
receipt
of
required
approvals
can
extend
the
construction
timelines of washery at Tasra
project.
Whether all arrangements pertaining
to technical assistance/collaboration
are in operation?		 Not applicable Not applicable Not applicable
Are there any favorable/unfavorable
events affecting the viability of these
object(s)?		 The company is awaiting approval
for Environmental clearance from
Ministry of Environment, Forest and
Climate Change, Government of
India for the installation of coal
washery.		 Mail correspondence from the
company		 Approvals from concerned
authorities are critical for the
installation and operation of
coal washery. Delay in the
receipt of the same might
extend
the
timelines
of
washery atTasra project.
Is
there
any
other
relevant
information
that
may
materially
affect the decision making of the
investors?		 Not applicable Not applicable Not applicable
Sr.
No		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Original
cost
(as per
the Offer
Documen
t) in Rs.
Crore		 Revised
Cost
in Rs.
Crore		 Comments
of the
Monitoring
Agency		 Comments of the Board of
Directors
Reason
for cost
revision		 Proposed
financing
option		 Particulars
of -firm
arrangeme
nts made
1 Funding
capital
expenditure
for
the
installation and operation
of
washery
and
coal
handling plant including
other
incidental
infrastructure works for		 Chartered Accountant
certificate*		 240.00 Not
applicable		 In line with the
objects in letter
of offer

CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

CIN-L67190MH1993PLC071691

Page 4 of 9

Sr.
No		 Sr.
No		 Item
Head		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Original
cost
(as per
the Offer
Documen
t) in Rs.
Crore		 Original
cost
(as per
the Offer
Documen
t) in Rs.
Crore		 Revised
Cost
in Rs.
Crore		 Revised
Cost
in Rs.
Crore		 Comments
of the
Monitoring
Agency		 Comments
of the
Monitoring
Agency		 Comments of the Board of
Directors		 Comments of the Board of
Directors		 Comments of the Board of
Directors		 Comments of the Board of
Directors		 Comments of the Board of
Directors		 Comments of the Board of
Directors
Reason
for cost
revision		 Proposed
financing
option		 Particulars
of -firm
arrangeme
nts made
the
Tasra
opencast
project
2 Repayment / prepayment
in full or part, of a portion
of the loan availed by our
Company from Bank of
Bahrain and Kuwait B.S.C		 Chartered Accountant
certificate considered
during earlier review		 20.00 Not
applicable		 In line with the
objects in letter
of offer
3 General
corporate
purposes (GCP)		 Chartered Accountant
certificate considered
during earlier review		 83.40 Not
applicable		 In line with the
objects in letter
of offer
Total 343.40
*Chartered Accountant certificate from M/s. Brahmayya & Co. Chartered
dated October 15, 2024.
(ii) Progress in the objects–
Sr.
No		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Comments of
the Board of
Directors
Amount
 Amount utilised in Rs. Crore
as
propose
d
in the
Offer
Docume
nt in Rs.
Crore		 Total
 Comments
of the
Monitoring
Agency
As at
beginni
ng of
the
quarter
in Rs.
Crore		 unutili
 Reaso
ns for
idle
funds		 Propo
sed
course
of
action
During At the
 sed

the		 end of
 amou
i
quarter the
 nt n

in Rs.
Crore		 quarter
in Rs.
Crore		 Rs.
crore
1 Funding capital
expenditure for
the installation
and
operation
of washery and
coal
handling
plant including
other incidental
infrastructure
works for the
Tasra opencast
project		 Chartered
Accountant
certificate*		 240.00 3.88 1.45 5.33 234.67 As on Sept. 30,
2024,
an
amount
of
Rs.5.33
crore
out of Rs.240
crore was spent
towards
payments
for
installation
of
washery.
The
balance
unutilised
amount
of

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CARE Ratings Limited

Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

CIN-L67190MH1993PLC071691

Page 5 of 9

Sr.
No		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Comments of
the Board of
Directors		 Comments of
the Board of
Directors
Amount
 Amount utilised in Rs. Crore
as
propose
d
in the
Offer
Docume
nt in Rs.
Crore		 Total
 Comments
of the
Monitoring
Agency
As at
beginni
ng of
the
quarter
in Rs.
Crore		 unutili
 Reaso
ns for
idle
funds		 Propo
sed
course
of
action
During At the
 sed

the		 end of
 amou
i
quarter the
 nt n

in Rs.
Crore		 quarter
in Rs.
Crore		 Rs.
crore
Rs.234.67 crore
is outstanding
in MA account
and invested in
fixed deposits
2 Repayment
/
prepayment in
full or part, of a
portion of the
loan availed by
our
Company
from Bank of
Bahrain
and
Kuwait B.S.C		 Chartered
Accountant
certificate*		 20.00 20.00 0.00 20.00 0.00 During Q3FY24,
the
company
has
spent
entire amount
of Rs.20 crore
towards
repayment
of
loan
availed
from Bank of
Bahrain
and
Kuwait
B.S.C,
as
per
the
objects of the
issue.
3 General
corporate
purposes (GCP)		 Chartered
Accountant
certificate*		 83.40 83.40 0.00 83.40 0.00 During Q3FY24,
the
company
spent Rs.83.40
crore
towards
repayment
of
Rs.10 crore of
Bank
of
Baharain
and
Kuwait
B.S.C
and
multiple
payments
towards
suppliers
and
sub-
contractors, as
per the objects
of the issue.
Total 343.40 107.28 1.45 108.73 234.67

CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

CIN-L67190MH1993PLC071691

Page 6 of 9

*Chartered Accountant certificate from M/s. Brahmayya & Co. Chartered Accountants (Member of Peer Review Board) dated October 15, 2024.

(iii) Deployment of unutilized proceeds:

Sr.
No.		 Type of instrument and
name of the entity
invested in		 Amount
invested		 Maturity date Earning Return on
Investment
(%)		 Market Value as
at the end of
quarter
1 Fixed Deposits in RBL Rs.106.00 crore October 31,
2024		 Rs.5.87 crore 8.32% Rs.111.87 crore
2 Fixed Deposits in RBL Rs.106.00 crore October 31,
2024		 Rs.5.87 crore 8.32% Rs.111.87 crore
3 Fixed Deposits in IndusInd Rs.22.50 crore November 01,
2024		 Rs.1.19 crore 7.96% Rs.23.69 crore
4 Monitoring Account Rs.0.17 crore - - - Rs.0.33 crore
Total Rs.234.67 crore Rs.247.76 crore

(iv) Delay in implementation of the object(s) –


Comments of the Board of
Comments of the Board of
Completion Date Delay (no. of

Directors
Objects days/
Reason of Proposed course
As per the offer document Actual months)
delay of action
Funding capital expenditure for
the installation and operation of
washery and coal handling plant
including
other
incidental
infrastructure works for the Tasra
opencast project		 Rs.2.88 crore during FY24
and Rs.2.45 crore spent
during H1FY25		 Ongoing
FY24 FY25 FY26
Rs.
crore		 24 48 168
Repayment / prepayment in full or
part, of a portion of the loan
availed by our Company from
Bank of Bahrain and Kuwait B.S.C		 By FY24 Fully utilized on October
30, 2023 (within
timelines)		 -
General corporate purposes (GCP) By FY24 Full amount of Rs.83.40
crores has been spent till
Dec. 31, 2023 (within
timelines).		 -

As per the terms of offer document, in the event that estimated utilization out of the Net Proceeds in a scheduled fiscal year is not completely met, the remaining Net Proceeds shall be utilised in the next fiscal year or if required, the amount scheduled for deployment in a specific Fiscal may be utilized in an earlier Fiscal, as may be determined by the company, in accordance with applicable laws.

CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

CIN-L67190MH1993PLC071691

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Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

Page 7 of 9

5)Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document:

Sr.
No		 Source of information /
Amount Comments of
certifications considered
Comments of Monitoring
Item Head^ in Rs. the Board of
by Monitoring Agency
Agency
Crore Directors
forpreparation of report
1 Repayment of
working capital
demand loan		 10.00 Chartered
Accountant
certificate considered during
previous review

Amount of Rs.83.40 crore utilised
under various item heads are as
per the provisions of letter of offer.
Section from the letter of offer
related to GCP is presented below
2 Payment to suppliers 63.00 Chartered
Accountant
certificate considered during
previous review
3 Payment to sub-
contractor		 10.40 Chartered
Accountant
certificate considered during
previous review
Total **83.40 **

^ Section from the offer document related to GCP:

“Our Company proposes to deploy the balance Net Proceeds, aggregating to ₹ 833.96 million, towards general corporate purposes as approved by our management from time to time, subject to such utilisation not exceeding 25% of the Gross Proceeds, in compliance with applicable laws. The general corporate purposes for which our Company proposes to utilise Net Proceeds include, without limitation, funding growth opportunities, part prepayment/repayment of any borrowings, business development initiatives, meeting expenses incurred in the ordinary course of business and towards any exigencies or any other purpose, as may be approved by our Board or a duly constituted committee thereof, subject to compliance with applicable law, including provisions of the Companies Act. The quantum of utilisation of funds towards each of the above purposes will be determined by our Board, based on the amount actually available under this head and the business requirements of our Company, from time to time, subject to compliance with applicable law. In addition to the above, our Company may utilise the Net Proceeds towards other purposes considered expedient and as approved periodically by our Board, subject to compliance with necessary provisions of the Companies Act. Our Company’s management shall have flexibility in utilising surplus amounts, if any. Our management will have the discretion to revise our business plan from time to time and consequently our funding requirement and deployment of funds may change. This may also include rescheduling the proposed utilization of Net Proceeds.

In the event that we are unable to utilize the entire amount that we have currently estimated for use out of Net Proceeds in a Fiscal, we will utilize such unutilized amount in the subsequent Fiscals.”

CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

CIN-L67190MH1993PLC071691

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Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

Page 8 of 9

Disclaimers to MA report:

a) This Report is prepared by CARE Ratings Ltd (hereinafter referred to as “Monitoring Agency/MA” ). The MA has taken utmost care to ensure accuracy and objectivity while developing this Report based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable. The views and opinions expressed herein do not constitute the opinion of MA to deal in any security of the Issuer in any manner whatsoever. b) This Report has to be seen in its entirety; the selective review of portions of the Report may lead to inaccurate assessments. For the purpose of this Report, MA has relied upon the information provided by the management /officials/ consultants of the Issuer and third-party sources like statutory auditors (or from peer reviewed CA firms) appointed by the Issuer believed by it to be accurate and reliable.

c) Nothing contained in this Report is capable or intended to create any legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said information. The MA is also not responsible for any errors in transmission and specifically states that it, or its directors, employees do not have any financial liabilities whatsoever to the users of this Report.

d) The MA and its affiliates do not act as a fiduciary. The MA and its affiliates also do not act as an expert to the extent defined under Section 2(38) of the Companies Act, 2013. While the MA has obtained information from sources it believes to be reliable, it does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives from auditors (or from peer reviewed CA firms), lawyers, chartered engineers or other experts, and relies on in its reports.

e) The MA or its affiliates may have other commercial transactions with the entity to which the report pertains. As an example, the MA may rate the issuer or any debt instruments / facilities issued or proposed to be issued by the issuer that is subject matter of this report. The MA may receive separate compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Hyderabad - 500 029 Phone: +91-40-4010 2030

==> picture [122 x 170] intentionally omitted <==

Corporate Office :4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in

CIN-L67190MH1993PLC071691

Page 9 of 9

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