To the Members
The Directors present the 11th Annual Report on the business and operation of K.P.Energy Limited together with audited financial statement for the year ended March 312020. The consolidated performance of the Company and its subsidiaries has been referredto wherever required.
1. Financial Results: (Rs. In lacs)
|Particulars ||Standalone || || |
| ||2020 ||2019 ||2020 ||2019 |
|Revenue from operations ||7411.61 ||15841.00 ||7499.25 ||15841.00 |
|Other Income ||59.73 ||47.36 ||59.73 ||47.36 |
|Total Income ||7471.34 ||15888.36 ||7558.98 ||15888.36 |
|Expenditure ||6334.62 ||12555.43 ||6421.54 ||12549.49 |
|Profit Earnings before interest tax depreciation and amortization (EBITDA) ||1136.72 ||3332.93 ||1137.44 ||3338.77 |
|Finance Cost ||461.41 ||458.04 ||462.13 ||463.88 |
|Depreciation ||397.01 ||383.99 ||397.01 ||383.99 |
|Profit Before Taxation ||278.30 ||2490.90 ||278.30 ||2490.9 |
|Tax expenses ||(168.28) ||(547.22) ||(168.28) ||(547.22) |
|Profit for the period ||110.02 ||1943.68 ||110.02 ||1943.68 |
(Previous period/year figures have been re-grouped/re-classified wherever required)
2. Financial and Operational Performance:
On a consolidated basis the revenue for FY 2020 was Rs. 7499.25 Lacs compare toprevious year's revenue of Rs. 15841.00 Lacs. The profit after tax (PAT) attributable toshareholders for FY 2020 and FY 2019 was Rs. 110.02 Lacs and Rs. 1943.68 Lacsrespectively. The PAT attributable to shareholders for FY 2020 registers a decline ingrowth compare to FY 2019 PAT. FY 2019 performance was highest in history of your Companyand year ended 2020 was worst hit by too many factors which lead to windstorms in entireindustry including your Company. While most of the players have numbers in red some intoinsolvency and few in reconstruction of debts it was important to remain nimble and agileinstead of expanding business horizons and leading to huge risks for survival. Companyhave just done what was expected by its Stake holders. It has enough inherent strengthsand opportunities to make good the lost time and profits.
3. Impact of COVID-19:
The COVID-19 pandemic is an evolving human tragedy declared a global pandemic by theWorld Health Organisation with adverse impact on economy and business. Supply Chaindisruptions in India as a result of the outbreak started with restrictions on movement ofgoods closure of borders etc. in several states followed by a nationwide lockdown fromthe 25th of March 2020 announced by the Indian Government to stem the spread of COVID-19.Due to this the operations at various sites of the Company has been temporarily disrupted.However the Company's electric power sale business was not much affected and isconsidered essential services in these challenging times. The Operations & Managementof Windfarm sites being catered continued without any interruptions as power generationwas permitted under all restrictions imposed from time to time. However the shutdownrepair and preventive maintenance schedules were not undertaken due to unavailability ofskilled labour and restricted movements.
OMS revenues though intermittent due to varied business was still recovered upto 50%during lock down period. However this will eventually get fully recovered post lock-downas operations were conducted by Company 24x7 at Sites without break.
The controlling office works resumed only from 20th May 2020 after permissions weregranted in Surat City in specific areas to open office with 33% staff for limited hours.
In light of these circumstances the Company has considered the possible effects thatmay result from COVID-19 on the carrying amounts of financials assets inventoryreceivables advances property plant and equipment Intangibles etc. as well asliabilities accrued. In developing the assumptions relating to the possible futureuncertainties in the economic conditions because of this pandemic the Company has usedinternal and external information such as our current contract terms financial strengthof partners investment profile future volume estimates from the business etc. Havingreviewed the underlying data and based on current estimates the Company expects thecarrying amount of these assets will be recovered and there is no significant impact onliabilities accrued. The impact of COVID-19 on the Company's financial statements maydiffer from that estimated as at the date of approval of these financial statements andthe Company will continue to closely monitor any material changes to future economicconditions.
4. Dividend and Reserves:
For the year ended March 31 2020 the Board of Directors has not declared/recommendedany dividend for the current financial year and have opt for conservation of profits andcontinued investment in the business. The company has transferred the whole amount ofProfit to Reserve and surplus account as per attached audited Balance sheet for the yearended March 31 2020.
5. Share Capital:
The authorised share capital of the Company was Rs. 125000000/- (Rupees TwelveCrores Fifty Thousand only) divided into 12500000 (One Crore Twenty-Five Lacs) EquityShares of Rs. 10/- (Rupees ten only) each. During the year under review there was nochange in the authorised share capital of the Company.
The paid up equity share capital of the Company was Rs. 111150000 (Rupees ElevenCrores Eleven Lacs Fifty Thousand Only) divided into 11115000 (One Crore Eleven LacFifteen Thousand) equity shares of Rs. 10/- (Rupees Ten only). During the year underreview there was no change in the Paid up Capital of the Company.
6. Amount of Unpaid/Unclaimed Dividend Transfer to Unpaid Dividend Account of theCompany:
During the financial year 2019-20 Company does not require to transfer any amount ofunpaid/unclaimed dividend to the Unpaid Dividend Account. The Statement of unpaid /unclaimed dividends as on March 31 2020 is uploaded on the Company's websitewww.kpenergy.in.
No funds were required to be transferred to Investor Education and Protection Fund(IEPF) during the year under review.
7. Deposits from Public:
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 the date of thebalance sheet.
8. Credit Rating:
For the year under review CARE (Credit Analysis and Research) has assessed the ratingsassigned to the bank facilities of the Company and has not changed the assigned ratingsand has reaffirmed the ratings and outlook. As per the review CARE assigned "TripleB minus" (Negative Outlook) for long term Bank facilities of Rs. 29.27 Crores (TermLoan) and "Triple B minus/A three" (Negative Outlook) for Long term/Short Termbank facilities of Rs. 11 Crores and "A Three" to Rs. 1.80 Crore Short term bankfacilities.
9. Quality Initiatives:
After successful evaluation of management system processes on-site audit technicalassessment and review of pertinent records in financial year 2018-19 your Company hasbeen awarded ISO 9001:2015 (Quality Management System) ISO 14001:2015 (EnvironmentManagement System) and ISO BS OHSAS 18001:2007 (Occupational Health & SafetyManagement System) certifications from Deutsch Quality System(DQS) India partner of UL(Underwriters Laboratories) LLC a global safety certification company having head quarterin Northbrook Illinois United States.
During the financial year 2019-20 surveillance audit was conducted by DQS for ISO9001:2015 (Quality Management System) ISO 14001:2015 (Environment Management System) andISO BS OHSAS 18001:2007 (Occupational Health & Safety Management System) and onsuccessful completion and verification that the management system fulfills therequirements of the standards all certificates have been renewed.
10. Employee Stock Option Plan:
Your Company approved the Employee Stock Option Scheme to reward its employees fortheir past association and performance. The scheme named as K.P. Energy LimitedEmployee Stock Option Plan Tranche - I' (Scheme') recommended by the Board ofDirectors on August 28 2017 which was approved by the Shareholders vide specialresolution on September 23 2017. Pursuant to the same our company intend to grant up to100000 options to the employees. However during the year under review no option hasbeen granted to any employee of the Company.
11. Material changes and commitments affecting the financial position of the Company:
There have been no material changes and commitments which affects the financialposition of the Company which have occurred between the end of the financial year to whichthe Financial Statements relate and the date of this Report.
12. Directors and Key Managerial Personnel:
Board of Directors:
The Company has Eight (8) Directors consisting of three (3) Independent Directors two(2) Non-Executive Directors one (1) Managing Director and Two (2) Whole time director. Inaccordance with the provisions of Section 152 and other applicable provisions of theCompanies Act 2013 Mrs. Bhadrabala Dhimant Joshi (DIN: 07244587) Non-Executive Directoris liable to retire by rotation and offer herself for re-appointment as Director of thecompany. After considering recommendations of Board the Members of the Company at theensuing Annual General Meeting may re-appoint Mrs. Bhadrabala Dhimant Joshi as Director ofthe company. Brief profile of Mrs. Bhadrabala Dhimant Joshi has been given in the Noticeconvening the 11th Annual General Meeting. During the year 2019-20 there was a change inDirectors/Key Managerial Personnel as stated below: a. Mr. Affan Faruk Patel (DIN:08576337) was appointed as Additional Director (Whole Time Director) in the Board Meetingheld on 26th December 2019. b. Mr. Salim Suleman Yahoo (DIN: 08648805) was appointed asAdditional Director (Non-Executive Independent Director) in the Meeting held on 26thDecember 2019.
Key Managerial Personnel:
The following are the Key Managerial Personnel of the Company pursuant to Section 2(51)and 203 of the Companies Act 2013: 1. Mr. Farukbhai Gulambhai Patel Managing Director 2.Mr. Ashish Ashwin Mithani Whole Time Director 3. Mr. Karmit Haribhadrabhai Sheth CompanySecretary 4. Mr. Pravin Radhekant Singh Chief Financial Officer *Mr. Affan Faruk Patelsubject to appointment in the ensuing Annual General Meeting by the members of the Companyshall be the Whole Time Director of the Company. Accordingly he shall be Key ManagerialPersonnel of the Company.
13. Declaration by Independent Director(s):
Pursuant to Section 149 and other applicable provisions of the Companies Act 2013 theCompany has received declarations from the Independent Directors of the Company confirmingthat they continue to meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Independent Directors have also confirmedthat they have complied with the Company's code of conduct.
14. Board Evaluation:
The Board has carried out performance evaluation of itself its Committees and each ofthe Directors (without participation of the concerned Director). Independent Directorscollectively evaluated the Board's performance performance of the Chairperson and othernon-independent Directors. The Nomination and Remuneration Committee also reviewed theperformance of the Board its Committees and of the Directors. The performance evaluationconcluded on the note that each of the individual directors Committees and the Board as awhole were performing efficiently and effectively and shared a common vision to turningorganization goals into reality.
15. Meetings of Board:
The Board of Directors of your Company met Eleven (11) times during the year 2019-20.The meetings were held on May 25 2019 June 28 2019 July 25 2019 August 08 2019August 20 2019 August 30 2019 October 05 2019 November 12 2019 December 26 2019February 13 2020 and March 05 2020. The maximum time gap between any two consecutivemeetings did not exceed one hundred and twenty days.
16. 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: Audit Committee Nomination and Remuneration Committe 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'of the Company which forms part of this Annual Report.
17. Subsidiaries Joint Ventures and Associate Companies:
As on March 31 2020 your Company has Six (6) subsidiary companies and Six (6) projectspecific Special Purpose Vehicles (SPVs) in form of Limited Liability Partnership. As onMarch 31 2020 there are no joint ventures/associates of the Company.
The list of Subsidiaries and Associates of your Company as on March 31 2020 isforming a part of Board's Report and the details under section 129 of the Companies Act2013 read with rule 5 of Companies (Accounts) Rules 2014 regarding 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.
18. 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 2014 as amendedfrom time to time M/s. K A SANGHAVI & CO LLP Chartered Accountants bearing FirmRegistration No. 120846W on the recommendations of the Audit Committee were appointed asthe Statutory Auditors of the Company to hold office from the conclusion of 7th Annualgeneral Meeting until the conclusion of the 12th Annual General Meeting of the Company onsuch remuneration as may be determined by the Board of Directors of the Company on a yearto year basis.
Statutory Auditors' observations in Audit Report:
There has been no observation qualification reservation or adverse remark ordisclaimer made by the statutory auditor in their Report.
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 M/s. SJV & Associates Practicing Company Secretaries as a SecretarialAuditor of the Company to undertake the Secretarial Audit for the Financial Year 2019-20in Meeting of Board of Directors held on May 25 2019. A Secretarial Audit Report in"Form MR-3" provided by M/s. SJV & Associates Practicing CompanySecretaries has been provided in an "Annexure-2" which forms part of thisReport.
Secretarial Auditors' observations in Secretarial Audit Report:
There is no qualification reservation or adverse remarks or disclaimer made by thesecretarial 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 M/s. RHA & Co. Chartered Accountants (FRN. 142551W) as anInternal Auditor of the Company to undertake the internal Audit for the Financial Year2019-20 in Meeting of Board of Directors held on May 25 2019.
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 and maintain the Cost records for the Financial Year 2019-20 in Meeting ofBoard of Directors held on August 30 2019. After considering the recommendations of Boardof Directors of the Company the remuneration payable to the Cost Auditor shall be ratifiedby the members at the ensuing Annual General Meeting.
19. 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 Public Infrastructure Development andHealth Care and these activities are in accordance with Schedule VII of the Companies Act2013 and the Company's CSR policy. The Report on CSR activities as required is annexed as"Annexure 3" to this report. Approved CSR policy is also available on theCompany's website www.kpenergy.in.
20. 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.
21. 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.
22. 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.
23. 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
24. Extract of Annual Return:
As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for FY 2019 is given in Annexure - I in the prescribed FormNo. MGT-9 which is a part of this report. The same is available on website of the companywww.kpenergy.in. The web link is provided below: http://www.kpenergy.in/kpedata/assets/uploads/MGT%20-%209_2019-20.pdf
25. Significant and material orders passed by the Regulators or Courts:
There were no significant and material orders passed by the Regulators/Courts thatwould impact the going concern status of the Company and its future operations.
26. Particulars of Loans Guarantees or Investments:
During the financial year 2019-20 company has repaid the unsecured loan of INR 26.50Lacs during the year which has been obtained from Mr. Ashish A Mithani Whole TimeDirector of the Company as per the provisions of section 185 of the Companies Act 2013read with The Companies (Acceptance of Deposits) Rules 2014.
The loans guarantees or investments made by the Company under Section 186 of theCompanies Act 2013 during the year under review has been disclosed in the in the note tothe Standalone and Consolidated Audit report which forms part of this Annual Report.Please refer to Note no. 2.26 of the Audit report.
27. Related Party Transactions:
None of the transactions with related parties falls under the scope of Section 188(1)of the Act. The information on transactions with related parties pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are givenin Annexure -5 in Form No. AOC-2 and the same forms part of this report.
28. 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 2019-20. 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.
29. 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 2019-20. 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.
30. 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 March31 2019 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 asSignificant 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 sufficient care has 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.
31. 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.
32. 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.
37. 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 Team KPEnergy and look forward to their continued support in future.
| ||For and on behalf of the Board of Directors |
| || ||K.P. ENERGY LIMITED |
|Place: Surat ||Farukbhai Gulambhai Patel ||Ashish Ashwin Mithani |
|Date: August 29 2020 ||Managing Director ||Whole Time Director |
| ||DIN: 00414045 ||DIN: 00152771 |