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Power Mech Projects Limited Capital/Financing Update 2024

Aug 12, 2024

60676_rns_2024-08-12_cb8f5ae6-6b92-45fe-a28a-12d8903dcd7e.pdf

Capital/Financing Update

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Date: 12.08.2024

To To The Corporate Relations Department National Stock Exchange of India Ltd BSE Limited, Exchange Plaza, Dalal Street, PJ Towers, Bandra Kurla Complex, Bandra (E), MUMBAI-400001 MUMBAI-400051

Dear Sir/Madam,

Sub: Monitoring Agency Report for the quarter ended June 30, 2024.

Ref: BSE Scrip Code: 539302, NSE Symbol: POWERMECH

Pursuant to Regulation 32(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with 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, Monitoring Agency, for the quarter ended 30.06.2024 in respect of 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.

Thanking You,

For Power Mech Projects Limited

Digitally signed by Sajja Sajja Kishore Kishore Babu Babu Date: 2024.08.12 21:58:36 +05'30' Sajja Kishore Babu Chairman and Managing Director DIN: 00971313

Encl:A/a

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12/08/2024

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No. CARE/HRO/GEN/2024-25/1020

The Board of Directors Power Mech Projects Limited

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

Dear Sir/Ma’am,

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

We write in our capacity of Monitoring Agency for the Rights 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 June 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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Tej Kiran Ghattamaneni

Assistant 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 Ltd For quarter ended: June 30, 2024 Name of the Monitoring Agency: CARE Ratings Limited

  • (a) Deviation from the objects: NA

  • (b) Range of Deviation: NA

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: Tej Kiran Ghattamaneni Designation of Authorized person/Signing Authority: Assistant Director

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CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Corporate Office :4th Floor, Godrej Coliseum, Hyderabad - 500 029 Somaiya Hospital Road, Off Eastern Express Phone: +91-40-4010 2030 Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in CIN-L67190MH1993PLC071691

Page 2 of 9

1)Issuer Details:

Name of the issuer : Power Mech Projects Ltd Name of the promoter : Mr. Sajja Kishore Babu Industry/sector to which it belongs : Construction and mining

2)Issue Details

Issue Period : October 18, 2023 to October 23, 2023 Type of issue (public/rights) : Qualified Institutions Placement Type of specified securities : Equity IPO Grading, if any : Not applicable Issue size (in crore) : 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*,
Utilization certificate as received
from the management1		 The net proceeds of QIP issue
is Rs.343 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 disclosed in the Offer
Document?		 Not applicable as there is
no
deviation
from
expenditures disclosed in
the offerdocument		 Chartered Accountant certificate*,
Utilization certificate as received
from the management1		 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 agencyreport		 Not applicable Not applicable -
Whether
all
Government/statutory
approvals related to the object(s) have
beenobtained?		 The company is yet to
receive
government,
regulatory and statutory		 Mail
correspondence
from
the
company		 Delay
in
the
receipt
of
required
approvals
can
extend
the
construction		 -

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----- Start of picture text -----

construction
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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 Reply Source of information /
certifications considered by
Monitoring Agency for
preparation of report		 Comments of the
Monitoring Agency		 Comments
of the
Board of
Directors
approvals
for
the
installation of coal washery
for Tasra MDO project.		 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 at Tasra project.		 -
Is there any other relevant information
that may materially affect the decision
making oftheinvestors?		 No. All information has
already been disclosed in
theletterofoffer.		 Not applicable Not applicable -
  • Chartered Accountant certificate from M/s. K. S. Rao & Co. Chartered Accountants ( Member of Peer Review Board and also Statutory Auditor of PMPL ) dated July 25, 2024.

1A detailed document dated July 29, 2024 presenting the utilization of funds during Q1FY25 undersigned by CFO, Mr. Nani Aravind Nallamothu.

Where material deviation may be defined to mean:

a) Deviation in the objects or purposes for which the funds have been raised

b) Deviation in the amount of funds actually utilized by more than 10% of the amount projected in the offer documents.

4)Details of objects to be monitored:

(i) Cost of objects –

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 4 of 9

Sr.
No		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Original
cost
(as per
the Offer
Document)
in Rs.
Crore		 Revised
Cost
in Rs.
Crore		 Commen
ts of the
Monitori
ng
Agency		 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
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*,
utilization certificate
from
the
management1		 240.00 Not
applicable		 In line with
the
objects
in letter of
offer		 - - -
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, utilization
certificate from the
management
considered
during
last review and Bank
Statements		 20.00 Not
applicable		 In line with
the
objects
in letter of
offer		 - - -
3 General corporate purposes
(GCP)		 Chartered
Accountant
certificate
and
utilization certificate
from
the
management
considered
during
last review		 83.40 Not
applicable		 In line with
the
objects
in letter of
offer		 - - -
**Total ** 343.40
  • Chartered Accountant certificate from M/s. K. S. Rao & Co. Chartered Accountants dated July 25, 2024. 1A detailed document dated July 29, 2024 presenting the utilization of funds during Q1FY25 undersigned by CFO, Mr. Nani Aravind Nallamothu.

(ii) Progress in the objects –

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 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 utilised in Rs.
Amount
Crore Total
unutili		 Comments of
the
Monitoring
Agency
as
propose
d
in the
Offer
Docume
nt in Rs.
Crore
As at
begin
ning
of the
quarte
r in
Rs.
Crore		 During
the
quarter
in Rs.
Crore		 Reas
ons
for
idle
funds		 Prop
osed
cours
e of
actio
n
At the
 sed
end of
 amoun
the
 t in Rs.
quarte
 crore
r in 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*,
utilization certificate
from
the
management1		 240.00 2.88 1.00 3.88 236.12 As on June 30,
2024, an amount
of Rs.3.88 crore
out
of
Rs.240
crore was spent
towards
payments
for
installation
of
washery.
The
balance unutilised
amount
of
Rs.236.12 crore is
maintained
as
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, utilization
certificate from the
management
considered
during
last review and Bank
Statements		 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
theissue.		 - -
3. General
corporate
purposes (GCP)		 Chartered Accountant
certificate
and
utilization certificate
from
the
management
considered
during
last review		 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		 - -

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as
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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 6 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 utilised in Rs.
Amount
Crore Total
unutili		 Comments of
the
Monitoring
Agency
as
propose
d
in the
Offer
Docume
nt in Rs.
Crore
As at
begin
ning
of the
quarte
r in
Rs.
Crore		 During
the
quarter
in Rs.
Crore		 Reas
ons
for
idle
funds		 Prop
osed
cours
e of
actio
n
At the
 sed
end of
 amoun
the
 t in Rs.
quarte
 crore
r in Rs.
Crore
per the objects of
theissue.
Total 343.40 106.28 1.00 107.28 236.12
  • Chartered Accountant certificate from M/s. K. S. Rao & Co. Chartered Accountants dated July 25, 2024. 1A detailed document dated July 29, 2024 presenting the utilization of funds during Q1FY25 undersigned by CFO, Mr. Nani Aravind Nallamothu.

(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.8.82 crore 8.32% Rs.109.86 crore
2. Fixed Deposits in RBL Rs.106.00 crore October 31,
2024		 Rs.8.82 crore 8.32% Rs.109.86 crore
3. Fixed Deposits in IndusInd Rs.23.50 crore November 01,
2024		 Rs.1.99 crore 7.96% Rs.24.32crore
4. Monitoring Account Rs.0.62 crore - - - Rs.0.71 crore
Total Rs.236.12crore Rs.244.75 crore

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

Comments of the Comments of the
Completion Date Delay
Board of Directors

(no. of
Objects Reason
Proposed
As per the offer
days/

of
course of

document*
Actual months)

delay		 action
Funding capital expenditure for the installation
and operation of washery and coal handling plant
including other incidental infrastructure works for
theTasra opencast project		 Rs.2.88 crore during
FY24 and Rs.1 crore
spent
during
Q1FY25		 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		 - - -

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----- Start of picture text -----

- -
----- End of picture text -----

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 7 of 9

Comments of the Comments of the
Completion Date Delay
Board of Directors

(no. of
Objects Reason
Proposed
As per the offer
days/

of
course of

document*		 Actual months)

delay		 action
has been spent till
Dec.
31,
2023
(within timelines).

*91 days for the amount to be spent in FY24. 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.

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

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


-
3 Payment to sub-
contractor		 10.40
Chartered
Accountant
certificate
and
Management
certificate submitted during last
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

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CARE Ratings Limited

401, Ashoka Scintilla, 3-6-520, Himayat Nagar, Corporate Office :4th Floor, Godrej Coliseum, Hyderabad - 500 029 Somaiya Hospital Road, Off Eastern Express Phone: +91-40-4010 2030 Highway, Sion (E), Mumbai - 400 022 Phone: +91-22-6754 3456 • www.careedge.in CIN-L67190MH1993PLC071691

Page 8 of 9

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.”

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 171] 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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