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KKV Agro Powers Ltd.

BSE: 538368 Sector: Infrastructure
NSE: KKVAPOW ISIN Code: INE239T01016
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KKV Agro Powers Ltd. (KKVAPOW) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 5th Annual Report togetherwith the Audited Financial Statement of the company for the Financial Year ended 31stMarch 2017.

1. FINANCIAL RESULTS:

(In `)

Current Year

Previous Year

2016-2017

2015-2016

Income from Operations 61857595 49273867
Gross Receipts (including other Income) 62337839 49276456
Total Expenditure before Interest and Depreciation 31332884 28320391
Less: Interest and Financial Charges 1621484 5289340
Less: Depreciation and Amortization 7757089 7802402
Profit/(Loss) before taxation for the year 21626382 7864323
Less: Current tax Expenses 4450000 1510000
Less: MAT Credit (4450000) (1510000)
Less: Deferred Tax Liability/Asset 7243059 2618801
Less : Earlier years (5717) (50601)
Profit/(Loss) after taxation for the year 14389040 5296123
Appropriations:
Transfer to Reserves 14389040 5296123
Proposed Dividend (Including Tax) - -
Transferred to Balance Sheet 14389040 5296123

2. PERFORMANCE OF THE COMPANY:

During the year under review the Company has earned sales income of `61857595/-(Previous year `49273867/-) and other income `480244 /- (Previous year`2589/-). After providing depreciation finance charges and tax the Company has earnedNet profit of ` 14389040/- (Previous year company earned Net profit `5296123/-).

3. DIVIDEND :

(i) Based on Company performance The Board of Directors are pleased to recommended forthe approval of the members a dividend of `2 Per Equity Shares (20%) for the financialyear 2016-2017.

(ii) The dividend on equity and Preference Share would involve a cash outflow of`1535600/- plus Dividend Distribution tax.

4. TRANSFER TO RESERVES:

The company does not propose to transfer any amount out of the profit to reserves underreview.

5. BUSINESS REVIEW:

The company is making efforts to improve the business and your Directors are optimisticof better performance during the year.

6. SHARE CAPITAL:

The Authorized share capital of the Company is `120000000 dividend into 11000000Equity Shares of `10 each aggregating to `110000000 and 100000 Preference Shares of `100 each aggregating to ` 10000000. Further the Paid up Capital of the Company hasbeen raised from `9676000/- dividend into 67600 Equity Shares of `10 eachaggregating to `676000 and 90000 Preference Shares of `100 each aggregating to `9000000 to `12628000/- dividend into 362800 Equity Shares of `10 eachaggregating to `3628000 and 90000 Preference Shares of `100 each aggregating to`9000000 pursuant to allotment of 295200 equity shares of `10/- each at a premium of`310/- per Equity Shares by way of Initial Public Offer. Apart from this during the yearyour Company has not issued any Equity shares with differential voting rights.

7. DIRECTORS:

Mr. T.K.Chandiran (DIN: 00031091) Managing Director of the Company is liable to retireby rotation and being eligible offers himself for reappointment.

8. KEY MANAGERIAL PERSONNEL:

During the year under review there was no appointment/resignation of Key ManagerialPersonnel.

9. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION:

The Company's policy on Director's appointment and remuneration and other mattersprovided in Section 178 of the Companies Act 2013 has been disclosed in the CorporateGovernance Report.

10. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES :

The Company does not have any joint venture subsidiary or associate company.

11. DECLARATION BY AN INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as stipulated in Section 149(6) ofthe Companies Act 2013 so as to qualify themselves to act as Independent Directors underthe provisions of the Companies Act 2013 and the relevant rules.

12. BOARD EVALUATION:

Pursuant to the provisions of the Act the Board has carried out an annual evaluationof its own performance the individual Directors (including the Chairman) as well as anevaluation of the working of all Board Committees. The performance evaluation was carriedout on the basis of inputs received from all the Directors / Members of the Committees asthe case may be. The Independent Directors of the Company have also convened a separatemeeting for this purpose. All the results of evaluation has been communicated to theChairman of the Board of Directors.

13. STATUTORY AUDITORS:

In terms of Proviso to Section 139 (1) of the Companies Act 2013 M/s. Haribhakti &Co. LLP Chartered Accountants (Firm Registration Number: 103523W/W100048) Coimbatore hasbeen appointed as a Statutory Auditors of the Company for a term of 3 years from 2015 -18subject to ratification by the shareholders at the every general meeting in terms ofordinary resolution passed by the Members at their 3rd Annual General Meetingheld on7 thSeptember 2015.

In pursuance of above term necessary resolution ratifying appointment of M/s.Haribhakti & Co. LLP Chartered Accountants Coimbatore as the Statutory Auditor forthe financial year 2017 - 2018 is being placed before members for their consideration inthis Annual General Meeting.

14. COST AUDIT:

Not applicable to the Company as per the provisions of the Companies Act 2013.

15. CORPORATE GOVERNANCE:

Your Company has been practicing the principles of good corporate governance. In termsof Schedule V of the SEBI (Listing obligations and Disclosures Requirements) Regulation2015 a separate report on Corporate Governance is furnished as Annexure 1 to thisreport.

16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems to monitor business processesfinancial reporting and compliance with applicable regulations. The systems areperiodically reviewed for identification of control deficiencies and formulation of timebound action plans to improve efficiency at all the levels. The Audit Committee of theBoard constantly reviews internal control systems and their adequacy significant riskareas observations made by the internal auditors on control mechanism and the operationsof the Company and recommendations made for corrective action through the internal auditreports. The Committee reviews the statutory auditors' report key issues significantprocesses and accounting policies.

17. CODE OF CONDUCT:

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 andthe Companies Act 2013 the Company has framed and adopted a Code of Conduct. The code isapplicable to the members of the Board the executive officers and all the employees ofthe Company.

All the members of the Board the executive officers and senior financial officers haveaffirmed compliance of the Code of Conduct as on 31st March 2017.

18. DEPOSIT:

During the year under review the Company has not accepted any Deposits within themeaning of the provisions of Section 2 (31) of the Companies Act 2013

19. EXTRACT OF THE ANNUAL RETURN:

An extract of the Annual Return as of 31st March 2017 pursuant to thesub-section (3) of Section 92 of the Companies Act 2013 in Form MGT 9 is furnished as Annexure2 to this report.

20. BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW:

During the year under review 13 Meetings of the Board of Directors and 5 Meetings ofthe Audit Committee and 2 Meetings of the Nomination and Remuneration Committee Furtherdetails of the same have been enumerated in the Corporate Governance Report annexedherewith.

21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:

During the year under review the Company has not given any loan or guarantee withinthe meaning of the provisions of Section 186 of the Companies Act 2013.

The Company has made investment in LIC MF Liquid Fund for a sum of ` 60 00000/-during the year.

22. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

A) Conservation of energy:

(i) The steps taken or impact on conservation of energy:

Strict vigilance is maintained over usage of Energy by constant monitoring andeducating the need to conserve energy.

(ii) The steps taken by the company for utilising alternate sources of energy:

The Company generates energy for captive consumption using environmental friendly windtechnology through its windmills and Solar Plant in the State of Tamil Nadu and AndhraPradesh.

(iii) The capital investment on energy conservation equipments: Nil

B) Technology absorption:

(i) The efforts made towards technology absorption:

Technology absorption is a continuous process and the company has been deriving variousbenefits which cannot be attributed to any specific area. In all the company stands togain on various fronts on account of continuous technology absorption.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: Nil

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) : Nil

(iv) The expenditure incurred on Research and Development: Nil

C) Foreign exchange earnings and Expenditure:

Foreign exchange earnings : Nil Foreign exchange Expenditure : Nil

23. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board has constituted an Audit Committee details of which are enumerated in theCorporate Governance Report. The Company has devised a vigil mechanism in the form of aWhistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act2013 and the policy is explained in corporate governance report and also posted on thewebsite of company and can be accessed at the link www.kkvagropowers.com. During the yearunder review there were no complaints received under this mechanism.

24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All The Particulars of the contract or arrangements entered into by the Company withrelated parties referred to in sub-Section (1) of Section 188 of the Companies Act 2013in Form No. AOC 2 is furnished as Annexure 3 to this report.

25. RISK MANAGEMENT POLICY:

The Management has devised Risk Management Policy considering the nature of industryand associated risks pertaining to the industry. The Management is overseeing theimplementation of the Policy on regular basis.

26. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of The Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Vasudevan G FCS of M/s. G.V. and Associates Company Secretaries inPractice to undertake the Secretarial Audit of the Company. The report of the SecretarialAuditor is annexed herewith as Annexure 4.

27. CORPORATE SOCIAL RESPONSIBILITY:

The Company does not meet the criteria as specified in section 135 of Companies Act2013 in relation to Corporate Social Responsibility.

28. PARTICULARS OF REMUNERATION PAID TO KEY MANAGERIAL PERSONNEL :

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of theremuneration of Directors Key Managerial Personnel and employees are enclosed as Annexure5 forming part of the report.

29. INSIDER TRADING REGULATIONS :

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations 1992read with SEBI (Prohibition of Insider Trading) Regulations 2015 as amended from time totime the code of conduct for prevention of insider trading and the Code for CorporateDisclosures ("Code") as approved by the Board from time to time are in forceby the Company. The objective of this Code is to protect the interest of shareholders atlarge to prevent misuse of any price sensitive information and to prevent any insidertrading activity by dealing in shares of the Company by its Directors designatedemployees and other employees. The Company also adopts the concept of Trading WindowClosure to prevent its Directors Officers designated employees and other employees fromtrading in the securities of KKV Agro Powers Limited at the time when there is unpublishedprice sensitive information.

30. DEPOSITORY SYSTEM :

As the Members are aware your Company's shares are trade-able compulsorily inelectronic form and your Company has established connectivity with both NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL). In view of the numerous advantages offered by the depository system the membersare requested to avail the facility of Dematerialization of the Company's shares on NSDL& CDSL. The

ISIN allotted to the Company's Equity shares is INE239T01016.

31. LISTING WITH STOCK EXCHANGES :

At present the equity shares of the Company are listed on the Emerge-the SME GrowthPlatform of National Stock Exchange of India Limited at Mumbai. The Company confirmed thathas no dues to the National Stock Exchange of India Limited for the year 2016-17 .

32. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND :

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND

REDRESSAL) ACT 2013 :

As per the requirements specified in the "The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013" the Company hasconstituted an Internal Complaints Committee and is committed to provide a workenvironment that is free from sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. There were no complaints received fromany employee during the financial year 2016 - 17.

34. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There is no material change or commitments after the closure of the financial year ason 31.03.2017 and till the date of this report.

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

There were no significant and material orders passed by the regulators or courts ortribunal which would impact the going concern status and the Company's operations infuture.

36. EXPLANATION AND COMMENTS ON INDEPENDENT AUDITORS REPORT:

The report of the Statutory Auditors (annexed elsewhere in the Annual Report) is selfexplanatory having no adverse comments.

37. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

1. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

2. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofprofit of the company for that period;

3. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

4. the directors had prepared the annual accounts on a going concern basis;

5. the directors had laid down internal financial controls are adequate and operatingeffectively and

6. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

38. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THANTHOSE WHICH

ARE REPORTABLE TO THE CENTRAL GOVERNMENT :

There were no instances of frauds identified or reported by the Statutory Auditorsduring the course of their audit pursuant to Section 143(12) of the Companies Act 2013.

39. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude and appreciation towardsthe Company's suppliers customers investors bankers Government of India StateGovernment and other regulatory authorities for their continued support during the year.Your Directors also acknowledge the commitment and the dedication of the employees at alllevels who have contributed to the growth of the Company.

FOR AND ON BEHALF OF THE BOARD

T.K Chandiran T.Gnanasekar
11-08-2017 Coimbatore (DIN: 00031091) (DIN: 00904018)
Managing Director Director