Your Directors are pleased to present the 40th ANNUALREPORT of Kalpataru Power Transmission Limited ("the Company")together with the Audited Financial Statements (standalone and consolidated) for thefinancial year ended March 31 2021.
(Rs. in Crores)
|Particulars ||Consolidated ||Standalone |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operations ||12949.44 ||12675.84 ||7670.70 ||7904.03 |
|Profit before Depreciation Tax and amortization expense ||1141.27 ||1006.65 ||777.57 ||752.21 |
|Less: Depreciation and amortization expenses ||373.45 ||339.64 ||114.60 ||110.48 |
|Profit before Tax and Exceptional Items ||767.82 ||667.01 ||662.97 ||641.73 |
|Exceptional items ||209.64 ||4.06 ||168.35 ||23.94 |
|Share of Profit / (Loss) from Joint Venture ||(32.21) ||(23.38) ||- || |
|Tax Expense ||283.21 ||258.10 ||216.10 ||202.62 |
|Profit for the period ||662.04 ||389.59 ||615.22 ||463.05 |
|Other Comprehensive Income (net of tax) || || || || |
|Items that will be reclassified subsequently to Profit or Loss ||8.89 ||(37.72) ||15.50 ||(24.44) |
|Items that will not be reclassified subsequently to Profit or Loss ||0.70 ||(1.51) ||(0.07) ||0.51 |
|Total Comprehensive Income for the period ||671.63 ||350.36 ||630.65 ||439.12 |
|Retained Earnings Opening balance ||1943.35 ||1752.96 ||2201.00 ||1868.29 |
|Add: Profit for the period ||671.02* ||389.59* ||615.22 ||463.05 |
|Add: Impact of Ind AS 116 (net of taxes) ||- ||(2.36) ||- ||(1.18) |
|Less: Acquisition of non-controlling interest ||- ||58.12 ||- ||- |
|Less: Dividends ||0.63 ||46.04 ||- ||46.04 |
|Less: Interim Dividend ||126.57 ||54.15 ||126.57 ||54.15 |
|Less: Corporate Tax on Dividend ||- ||20.59 ||- ||18.97 |
|Less: Transfer to Debenture Redemption Reserve ||- ||5.47 ||- ||- |
|Less: Transfer to General Reserve ||12.25 ||12.25 ||10.00 ||10.00 |
|Less: Transfer to Capital Redemption Reserve ||1.16 ||- ||1.16 ||- |
|Less: Transfer to other reserves ||0.21 ||0.22 ||- ||- |
|Retained Earnings Closing balance ||2473.55 ||1943.35 ||2678.49 ||2201.00 |
* Profit for the year attributable to Owners of the Company
OUR RESPONSE TO COVID-19
In FY 2020 as the COVID-19 pandemic first broke your Company promptlyreacted by providing the required support to its employees clients and the community. Ourpeople are our biggest strength and protecting their health and well-being includingthose at remote project sites is crucial to us. Your Company took numerous initiatives toprotect its employees' health financial and emotional wellbeing in theseunprecedented times. Your Company initiated the "Kalpa Aapada Seva Project" alarge-scale program for combating and containing COVID-19. We adopted a holistic strategyto safeguard and support our employees vendors subcontractors local communities andfrontline workers. Your Company had collaborated with residential doctors for varioushealth & well-being sessions. Health and wellbeing webinars and virtual conferencesfor topics like Ergonomics and Spine Health Session Stress Management and EmotionalWellbeing COVID Awareness Emotional Intelligence Eye Care were conducted. In additionto help employees create immunity against COVID medicines as prescribed by
Government of India were distributed to all employees. Our reliefefforts are delivering assistance on-the-ground such as engagement with NGOs to provideover 50000 meals to vulnerable communities and distribution of dry ration kits to migrantand daily wage workers in India. Part of our support to the local communities yourCompany distributed medicines masks sanitizers etc. to the local health centers andcommunities constructed a medical room facility contributed to the social solidarityfund for fight against the corona virus and supported the local communities bydistributing basic amenities like food books stationery masks sanitizers etc. atvarious International locations. Your Company helped to establish a 1000 bed dedicatedCOVID hospital equipped with intensive care units (ICUs) testing lab and dialysis centerat Thane Maharashtra. At various site locations our teams have procured medicalequipment PPE kits gloves masks and sanitizer and handed them to the local GovernmentHospitals and health care centers. For our partners - vendors suppliers andsubcontractors who have been most exposed to the crisis we shorten the lead time forpayments with systematic immediate payments. Your Company have ensured that all oursubcontractor workers were retained at site with ensured hygiene standards at labour campswith daily needs as per government guidelines.
First quarter of the Financial Year was mostly under lockdown imposedfor containment and curtailment of novel Corona virus (COVID-19). However your Companycontinued with its robust performance during the year.
During FY 2020-21 the Standalone revenue of your Company decreased byabout 3% to RS. 7670.70 Crores as against RS. 7904.03 Crores in the previousfinancial year. Total Export revenue (including overseas projects) was RS. 3550 Crores orapprox. 46% of revenues. The Standalone net profit for the year increased by 33% to RS.615.22 Crores as against RS. 463.05 Crores in the previous financial year. TheCompany successfully delivered on the Profitability front with Core EBIDTA 10.5% at aboutRS. 808 Crores with margins (PAT) on standalone level at 8% primarily driven byoperational excellence while the initiatives for cost rationalizations and productivityenhancement continue to gain momentum. Your Company has supplied 157095 MTs ofTransmission Line Towers during the year under review. Your Company has a standalone orderbook of RS. 13890 Crores excluding fairly placed bids. Your Company has received Ordersin excess of RS. 8440 Crores (including orders received by Linjemontage I Grastorp AB) inthe current financial year 2020-21. The consolidated revenue of your Companyincreased by about 2% to RS. 12949.44 Crores as against RS. 12675.84 Crores in theprevious financial year.
The consolidated net profit for the year increased by about 70% to RS.662.04 Crores as against RS. 389.59 Crores in the previous financial year mainly onaccount of exceptional gain and Operational excellence by the Group. COVID-19 globalpandemic induced lockdown was imposed pan-India in the initial part of FY 2020-21. Thesecond wave of COVID-19 started showing its impact in the last quarter and is stillcontinuing till the date of this report. Due to the project-based nature of businessthere was no material adverse impact on operations or finances of the Company during FY2020-21.
AWARDS & RECOGNITION:
Your Company has been honoured with various Awards accolades andrecognitions during the year under review some of which are elaborated hereunder:
A) Bronze Trophy was conferred to the Company's Gandhinagarmanufacturing plant and 765 KV D/C Vindhyachal Varanasi Transmission Line projectat the NSC India Award 2020 by the National Safety Council set up by the Ministry ofLabour Govt. of India.
B) Platinum Award was conferred to the Company at 45thInternational Convention on Quality concepts at Dhaka Bangladesh by BANGLADESH SOCIETY OFTOTAL QUALITY MANAGEMENT (BSTQM). The Theme for the Convention was "Unlockingimagination through QCC".
C) Your Company's Uniara Power Plant was conferred withappreciation certificate and recognition from District Administration as well as StateMedical & Health Department for remarkable local contribution in fighting COVID-19crisis.
D) Your Company's Raipur manufacturing plant was conferred with"Greentech Safety Excellence Award 2020" from Greentech Foundation.
E) Your Company's Raipur Manufacturing Unit was conferred with"Gold Award" by Grow Care India for exemplary performance in Safety Operationsand Environment Protection.
F) Your Company's Raipur Plant was conferred with Runners Upposition for excellence in Safety Health & environment (SHE) practices at the CIIChhattisgarh SHE Awards 2020-21.
G) Your Company's Raipur manufacturing plant was also conferredwith Silver Medallion at IMEXI (Integrated Manufacturing Excellence initiatives) PrizeCeremony organized by Kaizen Hansei a strategic partner of the Kaizen Institute India.
H) Your Company's Gandhinagar Manufacturing Plant was conferredwith Gold Trophy in the category "Challenges & Initiatives post COVID-19" bythe Surat Chapter of Quality Circle Forum of India (QCFI) at Chapter Convention on QualityConcepts 2020.
I) Confederation of Indian Industries - South Region has recognized theCompany's 765 kV D/C (HEXA) Virudhunagar Coimbatore Transmission line Projectas 3 Star rated project in appreciation of its EHS practices.
J) National Safety Council of India bestowed Merit Certificate to yourCompany for best EHS Practices during execution of 765 KV DC Bikaner KhetriTransmission Line Project.
K) Your Company received special recognition on attaining "TheExpert Panel Evaluation Milestone" at the BML Munjal Award 2020. The BMLMunjal Awards for 'Business Excellence through Learning & Development' recognizesorganizations who have demonstrated business excellence through innovation in learning& development.
L) Your Company was recognized with the Gold Trophy & NationalAward for HR Best Practices - 2019 and received "Certificate of Merit" fromNational Institute of Personnel Management (NIPM). Participating companies were evaluatedon various aspects of HR like People Strategy Innovative HR Practices Learning &Organizational Development HR Technology etc.
M) At Rail Infra and Mobility Business Digital Awards 2020 yourCompany was conferred with Certificate of Appreciation for being selected as"Electrical Solution Provider of the Year" in the Corporate (Rail Business)category. Further President (Railways) of the Company was selected as Rail BusinessLeader of the year at said awards.
N) 13 Artisans and Supervisors of your Company's Railways businessreceived Awards & Certificates at 12th Edition of CIDC Vishwakarma Awards.
O) The World HRD Congress has recognized your Company under thecategory Best Leadership Development Program for Middle Management for long-termleadership development intervention Leadership Excellence and Pride (LEAP) along with theTalent Development and Review Council (TDRC).
P) Indian Society for Training & Development the leading body forTraining & Development in India has recognized your Company at the 30thNational Award for Innovative Training Practices for the year 2019-20. This awardrecognizes that innovative training practices and sustainable processes to continuallyimprove such practices prevails in your Company.
Q) Various Clients of the Company recognized its EHS practices andprovided below certificates of appreciation:
BharatPetroleumCorporationLimitedgrantedcertificate ofAppreciation to your Company in appreciation of achievement of 12 million LTA Free manhours.
Power Grid Corporation of India Limited granted certificate ofAppreciation to your Company for 765 kV Ajmer Bikaner Transmission line Project inrecognition of significant achievement of "Zero Accident" during the period fromOctober 2019 to March 2021 without any Loss time accident and maintaining improved EHSStandards .
Indian Oil Corporation Limited granted Certificate ofAppreciation for winning first position in exhibiting best safety performances whileexecuting construction and laying of Paradeep Hyderabad Pipeline Project for the year2020. For the same project KPTL also received appreciation certificate for achieving 2million safe man hours. It also granted Certificate of Appreciation on achieving 1.5million safe man hours without LTI between January 2020 to January 2021 during theexecution of ETBPNMTPL R-LNG Pipeline Project.
GAIL (India) Limited granted Certificate of Appreciation to yourCompany on achieving 1 million safe man hours without LTI between February 2019 toJanuary 2021 during the execution of Dabhi Durgapur Pipeline Project.
Da Afghanistan Breshna Sherkat (DABS) granted Certificate ofAppreciation to certain official(s) of your Company for EHS performance during executionof 220 kV Sheberghan to Andkhoy Transmission Line Project.
MATERIALCHANGESANDCOMMITMENTAFFECTING FINANCIAL POSITION OF YOURCOMPANY
There are no material changes and commitments affecting the financialposition of your Company which has occurred between end of financial year 2020-21 and thedate of Directors' Report.
Your Company has declared and paid an Interim Dividend of RS.8.50 (425%) per equity share of RS. 2 each on February 13 2021. In addition your Boardhas recommended a Final Dividend of RS. 1.50 (75%) per equity share of RS. 2 eachfor the year ended March 31 2021.
TRANSFER TO RESERVES
Your Company has transferred following amounts to various reservesduring the financial year ended March 31 2021:
|Amount transferred to ||Amount in (Rs. in Crores) |
|General Reserve ||10.00 |
|Capital Redemption Reserve ||1.16 |
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES
A statement containing the salient features of financial statements ofthe subsidiary associate and joint venture companies in terms of provisions of Section129(3) of the Companies Act 2013 in the prescribed Form AOC-1 is annexed to ConsolidatedFinancial Statements and hence not repeated here for the sake of brevity.
The brief details of the activities carried out by key subsidiaries/new subsidiaries of your Company is provided below.
JMC Projects (India) Ltd. ("JMC Projects" or"JMC")
JMC is one of the leading construction companies in India with morethan RS. 3650 Crores revenue having presence in
South Asia East Asia and East Africa. It is certified under ISO9001:2015 Environmental Management System (EMS) conforming to ISO 14001:2015 andOccupational Health & Safety Management system (OHSMS) conforming to ISO 45001:2018 atall offices and projects.
The company's presence spans across residential complexes andtownships hospitals hotels commercial complexes institutions factories and buildingswater supply and irrigation projects roads and highways airports flyovers and elevatedcorridors metro rail and other urban infrastructure projects industrial units and powerplants. JMC's integrated capabilities span the spectrum of EPC' solutionswith Safety Quality and On-time delivery as the 3 pillars.
Over three decades of a strong customer-focused approach and a sharpfocus on world-class quality have enabled JMC to maintain a leadership position in itsmajor lines of business. Characterized by professionalism high standards of corporategovernance and sustainability JMC continues to evolve seeking better ways of engineeringto meet emerging challenges leveraging the power of People- Processes-Technology (PPT).
For the FY 2020-21 JMC has received new contracts of more than RS.7900 Crores including a project in Mongolia.
As of March 31 2021 the aggregate value of orders on hand of JMCstands at approx. RS. 14009 Crores. Your Company's shareholding in JMC stands at67.75% during the year under review.
Shree Shubham Logistics Ltd ("SSLL"):
SSLL undertakes an array of activities in the post-harvest value chainprimarily for agri-commodities and is currently present in 10 states and managinginventories above 1.5 million MT. The activities include warehousing collateralmanagement facilitation testing & certification and pest management. The activitiesare aimed at a wide spectrum of market participants dealing in agri-commodities includingfarmers traders & aggregators government agencies banks and electronic commoditiesexchanges. Through the integrated business model SSLL believes that they are able tocreate value in the post-harvest value chain. Your Company holds 100% equity shares ofSSLL. During the year under review SSLL has been awarded a new contract for 10 years byRSWC under PPP model for managing and operating its warehouses witRs. 48 locations andcapacity of 7.18 lac MT.
Linjemontage I Grastorp AB ("LMG"):
LMG a Swedish EPC company headquartered in Grastorp Sweden along withits two wholly owned subsidiaries were acquired by the Company's wholly ownedsubsidiary in Sweden namely Kalpataru Power Transmission Sweden AB in March 2019. Duringthe year under review LMG along with its two subsidiaries has bagged Orders of approx.RS. 565 Crores and has an Order Book of approx. RS. 1071 Crore as on March 31 2021. Thisyear the performance of the company has been impressive. Whilst on one side it has furtherstrengthened its position in the European markets and achieved a significant growth inrevenue of about 83.60% it has also observed an approx. 133% improvement in the netprofit. LMG continues to add more capabilities like entry into 400 kV transmission linesbusiness expanding its presence to many regions in Sweden including North of Sweden andadding new services. The team size at LMG has also been scaled up and it has emerged asone of the top suppliers in terms of quality of service and safety.
Fasttel Engenharia Ltda. ("Fasttel"):
On January 27 2021 your company incorporated a wholly ownedsubsidiary namely Kalpataru Power Do Brasil Participacoes Ltda ("KPBPL"). KPBPLentered into definitive Agreement to acquire 51% stake in Fasttel a Brazilian EPCcompany. Fasttel founded in 1988 is based in Curitiba city in the state of Parana insouthern part of Brazil and specializes in Engineering Procurement and Construction(EPC) and maintenance of power transmission lines substations and distribution systemsacross various voltage range up to 750 kV. The company mainly operates into three businessareas comprising of EPC of substations transmission and distribution network serviceswith revenue of around USD 47 Million in 2020 and has a profitable track record. Theacquisition of Fasttel is of strategic fit to KPTL in order to capture local marketopportunities in Brazil and expand business in Latin American market. On April 7 2021KPBPL completed the acquisition of 51% stake in Fasttel along with management control. Ason acquisition date Fasttel had a strong Order Book of approx. RS. 669 Crores. During theyear under review two new companies namely Kalpataru Power Senegal SARL in the Republicof Senegal and Kalpataru Power DO Brasil Participacoes Ltda. in Brazil were incorporatedas Wholly Owned Subsidiaries of your Company. Fasttel became 51% step-down subsidiary ofthe Company w.e.f. April 7 2021.
During the year under review Jhajjar KT Transco Private Limited ceasedto be a Joint Venture Company of the Company. Accordingly as on the date of this Reportyour Company has 26 direct and indirect subsidiaries and 1 joint venture company. Pursuantto provisions of section 129 of the Companies Act 2013 your Company shall placeConsolidated Financial statements before the members for its approval. Further pursuantto provisions of Section 136 of the Companies Act 2013 your Company will make availablethe Annual Accounts of the Subsidiary Companies and the related information to any Membersof the Company who may be interested in obtaining the same. The Annual Accounts of theSubsidiary companies are also uploaded on the website of the Company i.e. www.kalpatarupower.comand will also be kept open for inspection at the Registered Office of your Company andthat of the respective Subsidiary company.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Audited ConsolidatedFinancial Statements for the year under review pursuant to Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The ConsolidatedFinancial Statements presented by your Company have been prepared as per Ind AS andinclude the financial results of its Subsidiary companies Associates and Joint Venturecompanies.
DIVESTMENT/MONETIZATION OF TRANSMISSION LINE SPV's
On July 3 2019 your Company entered into 3 (three) binding agreementswith CLP India Private Limited ("CLP") to sell its stake in 3 (three) powertransmission assets namely Kalpataru Satpura Transco Private Limited ("KSTPL")Alipurduar Transmission Limited ("ATL") and Kohima-Mariani Transmission Limited("KMTL") (referred jointly as SPVs) for an estimated enterprise value of RS.3275 Crores. The transaction was subject to requisite approvals and compliances(conditions precedents).
Though the Company completed the sale of its entire stake in KSTPL onNovember 20 2019 however due to non-fulfilment of the conditions precedent the bindingagreement for sale of stake in ATL was terminated w.e.f May 1 2020. Subsequently yourCompany entered into definitive agreements with Adani Transmission Limited to sell itsstake in ATL subject to requisite approvals and compliances of conditions. On November26 2020 the Company completed the sale and transfer of ~49% of the total equity sharesof ATL with an agreement to sell the balance 51% after obtaining requisite regulatory andother approvals and in a manner consistent with Transmission Service Agreement.
Furthermore your Company entered into definitive agreement on May 292020 with India Grid Trust an infrastructure investment trust to sell its stake inJhajjar KT Transco Private Limited ("JKTPL") subject to receipt of relevantapprovals and compliances of conditions. Your Company completed the sale of its entirestake in JKTPL on October 5 2020.
During FY 2020-21 all the three Elements of KMTL Project weresuccessfully commissioned and the Company is in advanced stage of completion of sale ofKMTL to CLP as per terms of definitive agreement and in a manner consistent withTransmission Service Agreement.
BUY BACK OF EQUITY SHARES
The Board of Directors of the Company at its meeting held on May 202020 approved the buy-back by the Company of its equity shares of face value of RS. 2/-each ("Equity Shares") from the open market through the stock exchange mechanismin compliance with Securities and Exchange Board of India (Buy-Back of Securities)Regulations 2018 and the Companies Act 2013 and other applicable rules / law at amaximum price of RS. 275/- per Equity Share ("Maximum Buyback Price")payable in cash for an aggregate maximum amount not exceeding RS. 200 Crores.During the Buyback period the Company bought back a total of 5806262 Equity Sharesutilizing a total of RS. 142.69 Crores (excluding Transaction Costs). The EquityShares were bought back at an average price of RS. 245.75 per Equity Share. The Buyback ofthe Company was closed on November 27 2020 (being last working day) and all theformalities including payments and extinguishment of shares were completed withinstipulated time. Post completion of Buyback the Equity Share Capital of the Companyreduced to RS. 297818416 comprising of 148909208 Equity shares of RS. 2 each.
At the 39th Annual General Meeting held on August 12 2020the shareholders approved the re-appointment of:
(i) Mr. Manish Mohnot (DIN: 01229696) as the Managing Director &CEO for a period of 5 years effective from April 1 2020; and
(ii) Ms. Anjali Seth (DIN: 05234352) as an Independent Director of theCompany to hold office for a second term of 5 (five) consecutive years commencing fromMay 19 2020 and ending on May 18 2025.
Your Board is of the opinion that the Independent Director re-appointedduring the year possesses integrity expertise experience and proficiency.
Further during the year under review Mr. K. V. Mani (DIN:00533148) Independent Director of the Company ceased to be Director w.e.f. January 202021 due to his sudden demise. Mr. Imtiaz Kanga (DIN: 00136272) Non-ExecutiveNon-Independent Director of the Company resigned from the Board w.e.f. April 19 2021 dueto personal reasons driven by some family commitments. Your Directors place on recordtheir sincere appreciation for the contribution made by Late Mr. K. V. Mani and Mr. ImtiazI. Kanga during their tenure as Directors of the Company. Your Company has receiveddeclarations from all the Independent Directors confirming that they meet with thecriteria of independence as prescribed under Section 149(6) of the Companies Act 2013 andunder Regulation 16 (1) (b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and they have registered their names in the Independent Director'sDatabank. Further pursuant to Section 164(2) of the Companies Act 2013 all theDirectors have provided declarations in Form DIR- 8 that they have not been disqualifiedto act as a Director. In terms of Section 152 of the Companies Act 2013 Mr. Parag Munot(DIN: 00136337) being the longest in the office shall retire by rotation at the ensuingAGM and being eligible offers himself for reappointment. The Board of Directors of theCompany at the recommendation of Nomination and Remuneration Committee has recommended forhis reappointment.
In its meeting held on May 11 2021 the Board of Directors at therecommendation of Nomination and Remuneration Committee has approved the re-appointmentof Mr. Sanjay Dalmia (DIN: 03469908) as Executive Director of the Company for a furtherperiod of 3 years effective from August 8 2021 subject to approval of shareholders of theCompany. A brief resume of directors being appointed / re-appointed along with the natureof their expertise their shareholding in your Company and other details as stipulatedunder Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is appended as an annexure to the Notice of the ensuing Annual GeneralMeeting.
During the year under review the Board met Six (6) times on May 202020 August 12 2020 August 24 2020 November 4 2020 December 8 2020 and February13 2021. The number of Meetings of the Board that each Director attended is provided inthe Report on Corporate Governance appended to and forming part of this Report.
In order to adhere to the best corporate governance practices toeffectively discharge its functions and responsibilities and in compliance with therequirements of applicable laws your Board has constituted several Committees includingthe following:
Nomination and Remuneration Committee
Stakeholder's Relationship Committee
Corporate Social Responsibility Committee
Risk Management Committee
Share Transfer Committee
The details with respect to the compositions powers roles terms ofreference etc. of relevant Committees are given in detail in the Report on CorporateGovernance' of your Company which forms part of this Report. The dates on whichMeeting of Board Committees were held during the financial year under review and thenumber of Meetings of the Board Committees that each Director attended is provided in theReport on Corporate Governance'. The minutes of the Meetings of all Committeesare circulated to the Board for discussion and noting.
During the year all recommendation of the committees were approved bythe Board.
KEY MANAGERIAL PERSONNEL (KMP)
Mr. Manish Mohnot Managing Director & CEO Mr. Ram Patodia ChiefFinancial Officer and Mr. Rajeev Kumar Company Secretary are the Key Managerial Personnel(KMPs) as per provisions of Companies Act 2013. There has been no change in KMP duringthe year under review.
Your Company believes that robust Corporate Governance practices arecritical for enhancing and retaining stakeholder's trust and confidence. Your Companyalways ensures that its performance goals and targets are achieved in compliance with itssound corporate governance practices. The efforts of your Company are always focused onlong term value creation. Inherent to such an objective is to continuously engage anddeliver value to all its stakeholders including members customers partners employeeslenders and the society at large. The Report on Corporate Governance as stipulated underRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is attached. The Report on Corporate Governance also contains certain disclosuresrequired under Companies Act 2013 for the year under review. A certificate from M/s. B SR & Co. LLP Statutory Auditors of the Company confirming compliance to the conditionsof Corporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed to Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS
As per Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section on Management Discussion and AnalysisReport outlining the business of your Company forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has been always at forefront of voluntary CSR even beforethe provisions of Companies Act 2013 have made it imperative to institutionalize the CSRactivities. Kalpataru Foundation and Kalpataru Welfare Trust are the two CSR arms of theCompany. Our vision is to enhance the quality of life of people from marginalised andvulnerable communities by empowering them and catalysing change through innovative andsustainable solutions. In the communities we operate be at Mumbai or Gandhinagar orRaipur or any Project location your Company takes pride in working with all sections ofsociety selecting projects with infinite care and working in areas that are needs of theTarget beneficiaries. Your Company cherish the Kalpataru Spirit of maximizing societalvalue for needy. Your Company has formed the CSR Committee as per the requirement of theCompanies Act 2013. On recommendation of CSR Committee the Board of Directors' ofyour Company has approved the CSR Policy which is available on the website of your Companyat www.kalpatarupower.com. The brief outline of the Corporate Social Responsibility (CSR)Policy of your Company and the initiatives undertaken by your Company on CSR activitiesduring the year are set out in Annexure A of this report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014 (asamended from time to time).
BUSINESS RESPONSIBILITY REPORT
As stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Business Responsibility Report describing theinitiatives taken by the Company from an environmental social and governance perspectiveforms part of this Annual Report.
The details of Vigil mechanism ("Whistle Blower Policy")of the Company are given in the Report on Corporate Governance' appended toand forming part of this Report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Internal Financial Controls are an integrated part of the riskmanagement process addressing financial risks and financial reporting risks. The Boardhas adopted policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial disclosures.
Assurance on the effectiveness of internal financial controls isobtained through management reviews continuous monitoring by functional experts andtesting of the internal financial control systems by the internal auditors during thecourse of their audits. We believe that these systems provide reasonable assurance thatour internal financial controls are designed effectively considering the nature of ourindustry and are operating as intended.
STATUTORY AUDITORS AND AUDITORS' REPORT
M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022)Chartered Accountants have been appointed as Statutory Auditor's of the Company atthe 37th Annual General Meeting held on August 7 2018 to hold office from theconclusion of 37th Annual General Meeting (AGM) till the conclusion of the 42ndAnnual General Meeting of the Company subject to compliance of the various provisions ofCompanies Act 2013.
Statutory Auditor's comments on the Annual Financial Statements ofthe Company for year ended March 31 2021 both on Standalone and Consolidated basis areself-explanatory and do not require any explanation as per provisions of Section 134(3)(f)of the Companies Act 2013. There were no qualifications reservation or adverse remark ordisclaimer made by Statutory Auditor in their reports on the Standalone and theConsolidated Annual Financial Statement of the Company for the year under review.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013your Company had appointed Mr. Urmil Ved Practising Company Secretary Gandhinagar asits Secretarial Auditor to conduct the Secretarial Audit of your Company for FY 2020-21.The Report of the Secretarial Auditor for the FY 2020-21 is annexed to this report as AnnexureB.
There were no qualifications reservation or adverse remark ordisclaimer made by Secretarial Auditor in its report.
The Company has maintained cost records as specified by CentralGovernment under Section 148(1) of Companies Act 2013 and such records have been auditedby the Cost Auditor pursuant to Companies (Cost Records and Audit) Rules 2014. Pursuantto the provisions of Section 148 of the Companies Act 2013 read with Rule 14 of theCompanies (Audit and Auditors) Rules 2014 the cost records in respect of Electricity andSteel products of the Company need to be audited. In compliance to the above the Board ofDirectors upon the recommendation of the Audit Committee appointed M/s. K. G. Goyal &Associates Cost Accountants as the Cost Auditor of your Company for the FY 2020-21.
RISK MANAGEMENT FRAMEWORK
Your Company has an elaborate Risk Management Framework which isdesigned to enable risks to be identified assessed and mitigated appropriately. YourCompany monitors manages and reports on the principal risks and uncertainties that canimpact its ability to achieve its strategic objectives. Your Company's SOP'sOrganizational structure management systems code of conduct policies and Valuestogether govern how your Company conducts its business and manage associated risks. YourCompany also has a separate Bribery Risk assessment framework which also defines the keymitigation actions. The Risk Management framework enables the management . to understandthe risk environment and assess the specific risks and potential exposure to the Companydetermine how to deal best with these risks to manage overall potential exposure monitorand seek assurance of the effectiveness of the management of these risks and intervene forimprovement where necessary and report throughout the management chain upto the RiskManagement Committee on a periodic basis about how risks are being monitored managedassured and improvements are made.
PARTICULARS OF REMUNERATION
A. The ratio of the remuneration of each director to the medianemployee's remuneration and other details in terms of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended from time to time are forming part of thisreport as Annexure C1.
B. In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names of the top ten employees in terms ofremuneration drawn and names and other particulars of the employees drawing remunerationin excess of the limits set out in the said rules forms part of this Report.
Having regard to the provisions of the second proviso to Section 136(1)of the Act and as advised the Annual Report excluding the aforesaid information is beingsent to the members of the Company. The said Annexure is open for inspection at theRegistered office of your Company. Any member interested in obtaining copy of the same maywrite to Company Secretary.
The criteria for performance evaluation and the statement indicatingthe manner in which formal annual evaluation of the Board its Committee and of individualDirectors has been made are given in the "Report on Corporate Governance"which forms part of this Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDINGCRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OF ADIRECTOR
Your Companys policy on remuneration for the Directors' KeyManagerial Personnel and other employees are forming part of this Report and is annexed asAnnexure D1. The same is also placed on website of the Company www.kalpatarupower.com.There has been no change in the said Policy during the year under review. YourCompany's policy on Directors' appointment including criteria for determiningqualifications positive attributes independence of a director are forming part of thisReport and is annexed as Annexure D2.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEINFLOW & OUTFLOW
Information required to be disclosed under Section 134(3) (m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is annexedhereto as Annexure E and forms part of this Report.
DIVIDEND DISTRIBUTION POLICY
In terms of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) (Second Amendment) Regulations 2016 your Company hasformulated Dividend Distribution Policy and the same is annexed to this report as AnnexureF and is also available on the website of the Company i.e. www.kalpatarupower.com.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Particulars of loans given investments made guarantees given andsecurities provided along with the purpose for which the loan or guarantee or security isproposed to be utilized by the recipient are provided in the standalone financialstatement (Please refer to Note No. 38 to the Standalone Financial Statements).
The Annual Return of the Company as on March 31 2021 is available onthe website of Company ie. www.kalpatarupower.com
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in its ordinary course of business andon an arm's length basis. During the year the Company had not entered into anycontract / arrangement / transaction with related parties which could be consideredmaterial in accordance with the policy of the Company on materiality of related partytransactions or which is required to be reported in Form No. AOC-2 in terms of Section134(3)(Rs.) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts)Rules 2014.
The policy on materiality of Related Party Transactions is uploaded onthe website of your Company and the link for the same is provided in the Reporton Corporate Governance'. There were no materially significant related partytransactions entered into by the Company which could have potential conflict with interestof the Company at large.
Attention of Members is drawn to the disclosure of transactions withrelated parties set out in Note No. 42 of Standalone Financial Statements forming part ofthe Annual Report.
DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Your Company has zero tolerance towards any action of any executivewhich may fall under the ambit of Sexual Harassment' at workplace and is fullycommitted to uphold and maintain the dignity of every woman working in your Company. TheAnti Sexual Harassment Policy provides for protection against sexual harassment of womenat workplace and for prevention and redressal of such complaints.
Your Company has complied with provisions relating to the Constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. There were no complaints pending as onthe beginning of the financial year and no new complaints were received during thefinancial year under review.
POLICY ON CODE OF CONDUCT AND ETHICS
As an organization your Company places a great importance in the waybusiness is conducted and the way each employee performs his/her duties. Your Companyencourages transparency in all its operations responsibility for delivery of resultsaccountability for the outcomes of actions participation in ethical business practicesand being responsive to the needs of our people and society. Towards this end yourCompany has laid down a Kalpataru Code of Conduct ("KCoC") applicable to all theemployees of your Company. The Code provides for the matters related to governancecompliance ethics and other matters. Your Company has adopted strong anti-briberyanti-corruption policy and practices and has also been certified with ISO:37001 forestablishing Anti Bribery Management System across the organization.
STATEMENT OF DIRECTORS' RESPONSIBILITY
Pursuant to requirement under Section 134(3)(c) of the Companies Act2013 (Act) your Directors' confirm that:
(a) in the preparation of the annual accounts for the year ended onMarch 31 2021 the applicable accounting standards read with requirement set out underSchedule III to the Act have been followed and there are no material departures from thesame;
(b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as at March 31 2021 andof the profit of the company for the year ended on that date;
(c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the annual accounts on a going concern basis;
(e) they had laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and are operatingeffectively and;
(f) they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors and external consultants including audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe board is of the opinion that the Company's internal financial controls wereadequate and effective during FY 2020-21. The Directors have devised proper systems toensure compliance with the provisions of all applicable Secretarial Standards and thatsuch systems are adequate and operating effectively.
The Company has followed the applicable Secretarial Standards ie. SS-1and SS-2 relating to Meetings of Board of Directors' and GeneralMeetings' respectively.
Your Directors state that no disclosure or reporting is required inrespect of the following matters as there were no transactions on these matters during theyear under review:
Details relating to deposits covered under Chapter V of theCompanies Act 2013.
Issue of equity shares with differential rights as to dividendvoting or otherwise.
Issue of shares (including sweat equity shares) to employees ofthe Company under any scheme or any stock options scheme
Neither the Managing Director nor the Whole-time Directors ofthe Company receive any remuneration or commission from any of its subsidiaries.
No significant or material orders were passed by the Regulatorsor Courts or Tribunals which impact the going concern status and Company's operationsin future.
No fraud has been reported by the Auditors to the AuditCommittee or the Board.
There has been no change in the nature of business of theCompany.
There is no proceeding pending under the Insolvency andBankruptcy Code 2016.
There was no instance of onetime settlement with any Bank orFinancial Institution
Your Directors take this opportunity to thank all the Government andRegulatory Authorities Financial Institutions Banks Debenture holders and DebentureTrustee JV Partners Consortium Partners Customers Vendors Suppliers SubContractorsand Members and all other stakeholders for their valuable continuous support. The Board ofDirectors also wish to place on record its sincere appreciation for the committed servicesby the Company's executives staff and workers. Your Directors also appreciate andacknowledge the confidence reposed in them by members of the Company.
| ||On behalf of the Board of Directors |
| ||Mofatraj P. Munot |
|Place: Mumbai ||Executive Chairman |
|Date: May 11 2021 ||DIN: 00046905 |