K.P. Energy Ltd.
|BSE: 539686||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE127T01013|
|BSE 00:00 | 10 Dec||200.00||
|NSE 05:30 | 01 Jan||K.P. Energy Ltd|
|Mkt Cap.(Rs cr)||222|
|Mkt Cap.(Rs cr)||222.40|
K.P. Energy Ltd. (KPENERGY) - Director Report
Company director report
K.P. Energy Limited
Your Directors are pleased to present the 9thAnnual Report on the business andoperation of K.P. Energy Limited together with audited financial statement for the yearended March 312018.
1 FINANCIAL RESULTS:
(Previous period/year figures have been re-grouped/re-classified wherever required)
2. FINANCIAL PERFORMANCE:
The Key highlights pertaining to the business of the company for the year 2017-18 andperiod subsequent there to have been given hereunder:
Your company has recorded Rs. 6023.75lacs revenuein the year 2017-18 which was Rs. 11302.52 lacs in year 2016-17 and the Net profit of the company been recorded in the year2017-18 is Rs. 187.82lacs as compared to net profit of Rs 1689.45lacs in the previousyear.The reason for difference in the revenue is because of 70% fall in capacity additionin Indian Wind Energy capacity over previous year.
3. ISSUE OF BONUS SHARES
After considering the financial position of the company the Board of Directors at itsmeeting held on March 16 2018 recommended issueof Bonus Shares subject to approval ofthe Members through postal ballot in the ratio of 3 (Three) new fully paid up equityshares of Rs.
10/- each for every 10 (Ten) existing fully paid up equity shares of Rs. 10/- each.
4. DIVIDEND AND RESERVES:
Forthe year ended March 31 2018 the Board of Directors has notrecommended anydividend andthe company has transferred the whole amount of Profit to Reserve and surplusaccount as per attached auditedBalance sheet for the year ended March 312018.
5. SHARE CAPITAL:
The authorised share capital of the Company was increasedfromRs. 105000000/- (Rupeesten crores fifty lacs only)divided into 10500000 (one crore five lacs) Equity Shares ofRs. 10/- (Rupees ten only) each to Rs. l06000000/-(Rupees ten crores sixty Lacs only)divided into
1.06.00. 000 (one crore six lacs) Equity Shares of Rs. 10/- (Rupeesten only) each bycreation of additional 100000 (One lac) Equity Shares of Rs. 10/- (Rupees ten only) eachrankingparipasu in all respect with existing equity shares of the companyat8thAnnualGeneral Meeting held on September 23 2017.
Thepaid up equity share capital of the company as on March 31 2018 is Rs. 8.55.00.000(Rupees Eight crores fifty-fivelacs only)divided into 8550000 (eighty-five lacs fiftythousand) Equity Shares of Rs. 10/- (Rupees ten only) each. During the year under reviewthere was no change in the Company sissued subscribed and paid-up equity share capitaland the company has not issued any equity shares with differential rights as to dividendvoting or otherwiseshares (including sweat equity shares) to employees of the Companyunder any scheme.
6. AMOUNT OF UNPAID/UNCLAIMED DIVIDEND TRANSFER TO UNPAD DIVIDEND ACCOUNT OF THECOMPANY:
During the financial year 20l7-l8Company has transferred the total amount ofunpaid/unclaimeddividend to a special account opened by the company called the UnpaidDividend Account.The Company has also uploaded the Statement of unpaid / unclaimeddividends as on March 312018 on the Company's website www.kpenergy.in.
Pursuant to the applicable provisions of the Companies Act 2013read with the InvestorEducation and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules2016 ("the IEPFRules") all unpaid or unclaimed dividends are required tobetransferred by the Company to Investor Education and Protection Fund (IEPF) after thecompletion ofseven years. Furtheraccording to the IEPF Rules the shares onwhich dividendhas not been paid or claimed by the shareholdersfor seven consecutive years or more shallalso be transferred toIEPF. Accordingly the total amount of unpaid/unclaimeddividendshall be transfer to IEPF as per the statement uploaded on the website of the company.
TheCompany has neither accepted/invited any deposits pursuant to section 73 of theCompanies Act 2013 nor any outstanding deposit of earlier years pursuant to section 58Aof the Companies Act 1956 during the year 2017-18.
8. CREDIT RATING:
For the year 2017-1 8 CARE (Credit Analysis and Research)has undertaken creditanalysisof the bank facilities of your company dated March 9 2017 and assigned rating"Triple B minus" (Stable Outlook)for long term Bank facilities of Rs. 40.98Crores and "Triple B minus/A three"(Stable Outlook)for Long term/Short T ermbank facilities of Rs. 9.00 Crores.
As on September 4 2017 CARE(Credit Analysis and Research) has reviewedcredit analysisof the bank facilities of your company and assigned rating "Triple B minus"(Stable Outlook)for long term Bank facilities of Rs. 40.57 Crores and "Triple Bminus/A three"(Stable Outlook) for Long term/Short Term bank facilities of Rs. 9.00Crores.
9. INDEPENDENT EQUITY RESEARCH BY CRISIL:
CRISIL (Credit Rating Information Services of India Limited) has carried outIndependent Equity Research and complied Report on K.P. Energy Limited and has assignedthe fundamental grade of '3/5' to the Company dated November 10 2017. The grade indicatesthat the Company's fundamentals are 'good' relative to other listed equity securities inIndia. CRISIL has also assigned a valuation grade of '5/5' indicating that current marketprice has 'Strong upside'.
10. EMPLOYEE STOCK OPTION PLAN:
Your Company approved the Employee Stock Option Scheme to reward its employees fortheir past association andperformance. The scheme named as 'K.P. Energy Limited EmployeeStock Option Plan Tranche - I' ('Scheme') recommended by theBoard of Directors on August28 2017 which was approved by the Shareholders vide special resolutionon September 232017. Pursuant to the same our company intend to grant upto 100000 options to ouremployees. Howeveras on March 31 2018 no option is granted to any employee by ourCompany.
11. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments which affectsthe financial positionof the Company which have occurredbetween the end of the financial year to which theFinancialStatements relate and the date of this Report.
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
BOARD OF DIRECTORS:
The Company has Six (6) Directors consisting of two (2) Independent Directors two (2)Non-Executive Directors one (1) Managing Director and one (1) Whole time director. Inaccordance with the provisions of Section 1 52 and other applicable provisions of theCompanies Act 2013 Mrs. BhadrabalaDhimantrai Joshi (DIN: 07244587) Director isliable toretire by rotation and offer herself for re-appointment as Director of the company. Afterconsidering recommendations of Board the Members of the Company at the ensuing AnnualGeneral Meetingmay re-appointMrs. BhadrabalaDhimantrai Joshi as Director of the company.Brief profile of Mrs. BhadrabalaDhimantrai Joshi has been given in the Notice conveningthe 9thAnnual General Meeting. There was no other change in the Directors/Key ManagerialPersonnel during the year 2017-18.
KEY MANAGERIAL PERSONNEL:
The following are the Key Managerial Personnel of theCompanypursuant to Section 2(51)and 203 of the Companies Act 2013:
1. Mr. FarukbhaiGulambhai Patel Managing Director
2. Mr. Ashish Ashwin Mithani Whole Time Director
3. Mr. Karmit Haribhadrabhai Sheth Company Secretary
4. Mr. PravinRadhekant Singh Chief Financial Officer
13. DECLARATION BY AN INDEPENDENT DIRECTOR(S):
Pursuant to Section 149 and other applicable provisions of the Companies Act 2013 Mr.Sajesh Bhaskar Kolte and Mr. Raghvendra Rao Bondada are theIndependent Directors of theCompany. The Company has received declarations from both Independent Directors of theCompanyconfirming that they continue to meet the criteria of independence as prescribedunderSection 149(6) of the Companies Act 2013 and Regulation 16( 1 )(b) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. TheIndependentDirectors have also confirmed that they have complied with the Company's codeof conduct.
14. BOARD EVALUATION:
The Board has carried out performance evaluation of itself its Committees and each ofthe Directors (without participationof the concerned Director).Independent Directorscollectively evaluated the Board's performance performance of theChairman and othernon-independent Directors. The Nomination and Remuneration Committee also reviewedtheperformance of the Board its Committees and of the Directors.The performanceevaluation concluded on the note that each of the individual directors Committees and theBoard asa whole were performing efficiently and effectively and shared a common vision toturning organization goals intoreality.
15. MEETINGS OF BOARD:
TheBoard of Directors of your Company met 9 times during the year 2017-18. The meetingswere held on May 16 2017 July 8 2017 August 5 2017 August 28 2017 September 232017 November 14 2017 January 04 2018 March 16 2018 and March 31 2018. The maximumtime gap between any two consecutivemeetings did not exceed one hundred and twenty days.
COMMITTEES OF THE BOARD:
The Company has constituted various Committees pursuant to the requirements of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act2013. Presently the Company has following Committees of the Board of Directors:
Nomination and Remuneration Committee
Stakeholders' Relationship Committee
Corporate Social Responsibility Committee
The details with respect to the composition meetings powers roles terms ofreference etc. of these Committees are given in the'Report on Corporate Governance' ofthe Company which forms part of this Annual Report.
16. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
As on March 31 2018 your Company havefour (4) subsidiary companies and Six (6)project specific Special Purpose Vehicles (SPVs) in form of Limited Liability Partnership.As on March 31 2018 there are no joint ventures/associates of the Company.
During the year Evergreen Mahuva Windfarms Pvt. Ltd. became subsidiary Company of K.P.Energy Limited with 51% of Shareholding on January 18 2018. Your company also formedthree project specific special purpose vehicle (SPVs) in the form of Limited Liability(LLPIN: AAJ-5589) and Vanki Renewable Energy LLP (LLPIN: AAJ-5591) on May 30 20l7fordeveloping Wind power project and establishment of Power Infrastructure for wind powerproject in Gujarat.
The list of Subsidiaries and Associates of your Company as on March 31 2018 isforming a part of Board's Report andthe details under section 129 of the Companies Act2013 read with rule 5 of Companies (Accounts) Rules 2014regarding the performance andfinancial position of each of the Subsidiaries Associates and Joint Ventures of theCompany is provided in"Form AOC-1 "under Annexure-4 which forms part of thisreport.
17. AUDITORS AND AUDITOR'S REPORT:
Pursuant to the provisions of Section 139 and all other applicable provisions if anyof the Companies Act 2013 and the Companies (Audit and Auditors) Rules 20 14 asamended from time to time M/s.K A SANGHAVI & CO LLP Chartered Accountants bearingFirm Registration No. I20846W on the recommendations of the Audit Committee wereappointed as the Statutory Auditors of the Company to hold office from the conclusion of7th Annual general Meeting until the conclusion of the 12th Annual General Meeting of theCompany on such remuneration as may be determined by the Board of Directors of the Companyon a year to year basis.
STATUTORY AUDITORS' OBSERVATIONS IN AUDIT REPORT:
The Independent Auditors' Report given by statutory auditors for the financial yearended March 312018 contains the following observation(s):
"As stated in point g (iii) to the standalone/consolidated financial statementsthere has been no delay in transferring amounts required to be transferred to InvestorEducation and Protection fund by the Group. However the company has transferred theamount of Dividend of Rs. 1710000/- declared as final dividend at Re. 0.20 per share inAGM Dt. 23/09/2017 in separate bank account after the prescribed time limit as specifiedU/S. 123 of The Companies Act 2013 and also out of total dividend declared and paid Rs.250/- were unclaimed dividend which was also transferred to separate bank account afterthe prescribed time limit as per Sec. 124 of The Companies Act 201 3."
There has been no other observation qualification reservation or adverse remark ordisclaimer made by the statutory auditor in their Report.
S ECRETARIAL AUDITO R:
Pursuant to provision of Section 204 of Companies Act 2013 and Rules made thereunderon the recommendations of the Audit Committee the Board of Directors of the Company hasappointed Ms. Janki Shah Prop of M/s SJV &Associates Practicing Company Secretaryas a Secretarial Auditor of the Company to undertake the Secretarial Audit for theFinancial Year 2017-18 in Meeting of Board of Directors held on March 3 1 2018. ASecretarial Audit Report in "Form MR-3" given by Ms. Janki Shah Prop. of M/s SJV&Associates Practicing Company Secretary has been provided in an"Annexure-2" which forms part of the this Report.
SECRETARIAL AUDITORS' OBSERVATIONS INS SECRETARIAL AUDIT REPORT:
As stated in the Secretarial audit report annexed herewith for the financial year endedMarch 312018 contains the following observation(s):
"We further report that during the audit period there has been no delay intransferring amounts required to be transferred to Investor Education and Protectionfund by the Company. The company has transferred the amount of Dividend of Rs. 1710000/-declared as final dividend at Re. 0.20 per share ratified in AGM dated September 23 2017in separate bank account after the prescribed time limit as specified under section 123 ofThe Companies Act 2013 and also out of total dividend declared and paid Rs. 250/- wereunclaimed dividend which was also transferred to separate bank account after theprescribed time limit as per Section 124 of The Companies Act 2013."
There is no other qualification reservation or adverse remarks or disclaimer made bythe secretarial auditor in their report.
Pursuant to Section 138 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 on the recommendations of the Audit Committee the Board of Directors of theCompany has appointed Mr. Harsh Shailesh kumar Shah Chartered Accountant (Membership no.165448) as an Internal Auditor of the Company to undertake the internal Audit for theFinancial Year 2017-18 in Meeting of Board of Directors held on March 312018.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 and subject to the approval of Central Government on therecommendations of the Audit Committee the Board of Directors of the Company hasappointed M/s. Nanty Shah & Associates Cost Accountants as Cost Auditors to undertakethe Cost Audit for the Financial Year 2017-18 in Meeting of Board of Directors held onSeptember23 2017.After considering the recommendations of Board of Directors of thecompany theremuneration payable to the CostAuditor isratified by the members at theensuing Annual General Meeting.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company has constituted the Corporate Social Responsibility (CSR) Committee inaccordance with Section 135(1) of the Companies Act 2013 the Company has undertakenactivities in the area of Education Environment care & Protection PublicInfrastructure Development and Health Care and theseactivities are in accordance withSchedule VII of the Companies Act 2013 and the Company's CSR policy. The Report on CSRactivities as required is annexed as "Annexure 3" to this report. Approved CSRpolicy is also available on the Company's website www.kpenergy.in.
19. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report on the operations of the Company asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is provided in a separate section which forms part of this Annual Report.
20. CORPORATE GOVERNANCE:
As per Regulation 34(3) read with schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 a separate section on corporate governancepractices together with a certificate from the Company's Auditors confirming compliancesis annexed separately to this report.
21. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a well-placed proper and adequate internal financial control systemwhich ensures that all the assets are safeguarded and protected and that the transactionsare authorized recorded and reported correctly. The internal audit covers a wide varietyof operational matters and ensures compliance with specific standard with regards toavailability and suitability of policies and procedures. During the year no reportablematerial weakness in the design or operation were observed.
22. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
In pursuant to the provisions of section 177(9) & 177( 10) of the Companies Act2013 a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Companywww.kpenergy.in
23. EXTRACT OF ANNUAL RETURN:
The extract of the Annual Return in form MGT-9 as required under Section 92 of theCompanies Act 2013 is annexed as "Annexure-1 " and forms an integral part ofthis Report.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS: There were nosignificant and material orders passed by the Regulators/Courts that would impact thegoing concern status of the Company and its future operations.
25. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
During the financial year 2017-18 company has accepted the unsecured loan of Rs.200000 from Mr. Farukbhai Gulam bhai Patel Managing Director and Rs. 1000000 from Mr.Ashish Ashwin Mithani Whole Time Director of the company under section 185 of theCompanies Act 201 3 read with The Companies (Acceptance of Deposits) Rules 2014 and adeclaration confirming that unsecured loan (without any interest) has been given out oftheir own funds and is not being given out of funds acquired by them by borrowing oraccepting loans or deposits from others hasbeen received from both the director at thetime of giving the unsecured loans to the company.
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
26. RELATED PARTY TRANSACTIONS:
All related party transactions entered into during the financial year 2017-18 were inthe ordinary course of business on arm's length basis and were in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. All transactions which are foreseen andrepetitive in nature omnibus approval of Board of Directors is obtained at the beginningof the financial year 201718 anda statement of all Related Party Transactions is placedbefore the Audit Committee for its review on a quarterly basis.
The particulars of contracts / arrangements with related parties referred to in Section188(1) entered into during the financial year under review as required to be given in FormAOC-2 have been provided in an "Annexure-5" which forms part of this Report.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
There was no technology absorption and no foreign exchange earnings or outgo duringthe financial year 2017-18. Hence the information as required under Section 134(3)(m) ofthe Companies Act 2013 read with the Companies (Accounts) Rules 2014 is to be regardedas Not Applicable.The Company has not entered into any technology transfer agreement.
28. EMPLOYEES REMUNERATION:
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 are not applicable to the Company as none of theemployees has received remuneration above the limits specified in the rule 5(2) & (3)of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014during the financial year 2017-18. Further the disclosures pertaining to remuneration andother details as required under section 197(12) of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed in "Annexure 6"
The Policy on Directors appointment and remuneration including criteria fordetermining qualifications positive attributes and independence of the Directors andother matters provided under sub-section (3) of Section 178 of the Companies Act 2013 isannexed as "Annexure 6" and forms an integral part of this Report.
29. 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 ofthe Section 134(3)(c) of the Companies Act 2013:
I. That in the preparation of the annual financial statements for the year ended March3 1 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
II. That such accounting policies as mentioned in the Financial Statements as'Significant Accounting Policies' have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company as at March 31 2018 and of theprofit of the Company for the year ended on that date;
III. That proper and s ufficient care h as been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
IV That the annual financial statements have been prepared on a going concern basis;
V That proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively;
VI. Those proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
30. AWARDS AND RECOGNITIONS:
During the year under review your company has won Bronze Award in category ofPortfolio Performance - Wind Developer of the year for outstanding achievements in WindEnergy Sector by India Wnd Energy Forum (IWEF) Excellence Awards 2017 on October 12 2017at Chennai.
Your company has been awarded Corporate Membershipof Mangrove Society of India datedJuly 26 2017 for its dedicated services for conservation and awareness in MangroveEcosystem.
31. LISTING WITH STOCK EXCHANGE:
The equity shares of the company listed on SME Platform of the BSE Limited on February25 2016. The annual listing fee for the year 2017- 2018 has been paid to the Exchange.
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on March 312018.
33. HEALTH SAFETY & ENVIRONMENT POLICY:
The Company has recognized health management occupational safety and environmentprotection (HSE) as one of the most important elements in the organization's sustainablegrowth and has closely linked it to its cultural values. Company continually strives tocreate a safe working environment by being responsive caring and committed to the variousneeds governing the security and well-being of employees. The HSE policy has been reviewedby the company and is also available on the Company's website www.kpenergy.in .
34. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. The Sexual Harassment Policy has been reviewed by the companyand is also available on the Company's website www.kpenergy.in .
35. OTHER DISCLOSURES:
The Company has devised proper systems to ensure compliance with the provisionsof all applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.
As per SEBI Listing Regulations the Corporate Governance Report with theAuditors' Certificate thereon and the Management Discussion and Analysis are attachedwhich forms part of this report.
Neither the Managing Director nor the Whole-time Directors of the Companyreceive any remuneration or commission from any of its subsidiaries.
The Directors wish to place on record their appreciation for the support andcooperation which the Company continues to receive from the government of Gujarat theBanks / Financial Institutions shareholders customers and suppliers and all persons whoare directly or indirectly associated with the company.
Your Directors appreciate and value the contribution made by every member of TeamKPEnergy and look forward to their continued support in future.