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KKV Agro Powers Ltd.

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

Company director report

To

The Members

Your Directors have pleasure and privilege in presenting the 9th AnnualReport together with the Audited Financial Statements of the M/s. KKV Agro Powers Limited(“the Company”) for the Financial Year ended 31st March 2021.

1. FINANCIAL SUMMARY AND HIGHLIGHTS:

(In )

Particulars Current Year Previous Year
2020-2021 2019-2020
Income from Operations 3196215970 392825688
Gross Receipts (including other Income) 3196580368 393337393
Total Expenditure before Interest and Depreciation 3178054048 358171166
Less: Interest and Financial Charges 604466 512990
Less: Depreciation and Amortization 11738270 12001662
Profit/(Loss) before taxation for the year 6183584 22651575
Less: Current tax Expenses 2074500 4900000
Less: MAT Credit - (4900000)
Less: Deferred Tax Liability/Asset (760696) 6670110
Less : Earlier years 294533 (12978676)
Profit/(Loss) after taxation for the year 4575247 28960141
Transfer to Debenture Redemption Reserve - -
Less: Transfer to Reserves - -
Less: Dividend paid on Equity Shares 2267500 2267500
Less: Dividend paid on Preference Shares 270000 270000
Less: Dividend Distribution Tax - 521710
Balance carried forward 2037747 25900931

Operations:

As on 31st March 2021 the operating capacity of the Company was 8.6 MWconsisting of 1 MW of Solar plants and 7.6 MW of Wind plants.

The Company has planned to commission a new solar plant in upcoming year which will add2 MW to its operating portfolio. This plan was supposed to be executed last year but thepandemic did not pave way for it. Thereby the same is carried forward this year whichwould show results in the year 2021-22

2. COVID -19:

COVID-19 extracted a huge toll on lives and livelihoods of millions of people in Indiaand other parts of the world. It also severely impacted the Indian economy and all otherindustries including the power sector which observed a decline in electricity demanddisruption in the power supply chain and financial stress due to the lockdown. The worstdecline was observed in the southern and western regions with national demand reducing by19%. Despite being an essential service the sector grappled with multiple challenges toserve power to the citizens.

At the onset of the pandemic KKV Agro Powers Ltd experienced challenges across itsbusiness activities and operations. However with the efforts of a dedicated workforce wemanaged uninterrupted generation transmission and distribution of power across thecountry.

These are challenging times for the world at large. The outbreak of COVID-19 and itsrapid acceleration across the globe are concerning. While the human impact of the virustakes precedence for all of us we continue to monitor the developments closely and arewary of the adverse impact on our business.

3. TRANSFER TO RESERVES:

The Board of Directors of your Company has decided not to transfer any amount to theReserves for the year under review.

4. DIVIDEND:

Based on the Company’s performance the Board of Directors are pleased torecommend a Dividend of ` 5.00/- per Equity Share (i.e. 50%) (Previous year 50%) for theFinancial Year 2020-2021 subject to the approval of the Shareholders of the Company at the9th AGM. The Board of Directors has also approved a Dividend of 3% on theRedeemable Cumulative Preference Shares.

5. AMOUNT LYING IN THE UNPAID DIVIDEND ACCOUNT AND TRANSFER TO IEPF:

Your Company did not have any funds lying unpaid or unclaimed as on 31.03.2021.Therefore there was no fund which was required to be transferred to Investor Educationand Protection Fund (IEPF).

6. SHARE CAPITAL:

During the year under review there is no change in the Share Capital of the Company.

The Authorized Share Capital of the Company as on March 312021 is 120000000dividend into 11000000 Equity Shares of 10 each aggregating to 110000000 and100000 Preference Shares of 100 each aggregating to 10000000.

The Paid up Equity Share Capital of the Company as on March 312021 is 13535000divided into 453500 Equity Shares of 10 each aggregating to 4535000 and 90000Preference Shares of 100 each aggregating to 9000000.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Your Company has an optimum combination of Executive and Non-Executive Directors. YourCompany is led by an experienced team of Directors alongside a talented management whichhas vast experience knowledge and expertise in this field. Each member in our groupcontributes to the Company’s growth.

Details of changes happened in the composition of Board of Directors during the periodunder review:

Mr. V.N. Chandrasekaran was re-appointed as Independent director for second five yearsterm at the Annual general Meeting held on 29.09.2020.

Mrs. Srividya.M (Membership No. A58222) resigned from the office of Company SecretaryCompliance Officer with effect from 3rd April 2021.

Details of the Appointment / Re-appointment proposed to be made at the AGM:

Mrs. Selvi (DIN: 00032962) Director of the Company is liable to retire by rotation atthe AGM. The Director being eligible to be re-appointed has given his consent for hisreappointment.

Mr. T.K Chandiran (DIN: 00031091) was reappointed as Managing Director of the Companyfor a period of 3 years with effect from 03.04.2021 subject to the approval of theshareholders. Accordingly a necessary resolution in this behalf is set out at item no. 5of the notice convening the ensuing Annual General Meeting for shareholders’approval.

Mrs. C. Selvi (DIN: 00032962) was re-appointed as Wholetime Director of the Companyfor a period of 3 years with effect from 03.04.2021 subject to the approval of theshareholders. Accordingly a necessary resolution in this behalf is set out at item no. 6of the notice convening the ensuing Annual General Meeting for shareholders’approval.

8. BOARD EVALUATION:

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

9. DECLARATION BY INDEPENDENT DIRECTORS:

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

10. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The Company’s policy on Director’s appointment and remuneration and othermatters provided in Section 178 of the Companies Act 2013 has been disclosed in theCorporate Governance Report.

11. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Joint Venture Subsidiary or Associate Company.

12. STATUTORY AUDITORS:

M/s. VKS Aiyer & Co. (Firm Reg. No. 000066S) Chartered Accountants Coimbatorewere appointed as Independent Statutory Auditors of the Company for a period of five yearsfrom the conclusion of the 6th Annual General Meeting held on 21-09-2018 tillthe conclusion of the 11thAnnual General Meeting.

13. MAINTENANCE OF COST RECORDS:

The maintenance of Cost Records is not applicable as per the provisions of Section 148of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014.

14. COST AUDIT:

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

15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The details of Management Discussion and Analysis Report are furnished in Annexure - 1to this Report.

16. CORPORATE GOVERNANCE:

Your Company has been practicing the principles of good corporate governance. In termsof Schedule V of the SEBI (Listing obligations and Disclosures Requirements) Regulation2015 a separate report on Corporate Governance is furnished as Annexure - 2 to thisreport.

17. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company’s internal financial control systems are commensurate with the natureof its business and the size and complexity of its operations. The internal controlprocedures have been planned and designed to provide reasonable assurance of compliancewith various policies practices and statutes in keeping with the organisation’s paceof growth and achieving its objectives efficiently and economically.

The internal controls risk management and governance processes are duly reviewed fortheir adequacy and effectiveness through periodic audits by the Internal Audit department.Post-audit reviews are also carried out to ensure that audit recommendations areimplemented. The Audit Committee reviews the adequacy and effectiveness of theCompany’s internal control environment and monitors the implementation of auditrecommendations including those relating to strengthening of the Company’s riskmanagement policies and systems. The ultimate objective being a Zero Surprise RiskControlled Organization.

18. CODE OF CONDUCT:

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

All the members of the Board the executive officers and senior financial officers haveaffirmed compliance with the Code of Conduct as on 31st March 2021.

19. DEPOSIT:

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

20. ANNUAL RETURN:

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 the Companyhas placed a copy of the Annual Return as at March 31 2021 on its website atwww.kkvagropowers.com.

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

The Meetings of Board of Directors of the Company and its Committees are called andconvened as per the applicable provisions of the Companies Act 2013 the relevant Rulesmade thereunder the SEBI Listing Regulations the Secretarial Standards issued by theInstitute of Company Secretaries of India and the Principles of Corporate Governance laiddown by the Company.

During the year under review Four (4) Meetings of the Board of Directors Four (4)Meetings of the Audit Committee Two (2) Meetings of the Nomination and RemunerationCommittee and Two (2) Meetings of the Stakeholders Relationship Committee were held.Further details of the same have been provided in the Corporate Governance Report annexedherewith.

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

During the year under review the Company has not made any Investment or given anyLoan Guarantee or Security within the meaning of the provisions of Section 186 of theCompanies Act 2013.

23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO: A)Conservation of energy:

The Company monitors auxiliary consumption at its plants and takes measures to reduceit through use of energy efficient appliances prudent use of resources naturalventilation etc.

(i) The steps taken or impact on conservation of energy: Strict vigilance is maintainedover usage of Energy by constant monitoring and educating the need to conserve energy. Thesteps taken by the Company for utilizing alternate sources of energy:

The Company generates energy for captive consumption using environmental friendly windtechnology through its windmills and Solar Plant in the States of Tamil Nadu and AndhraPradesh. The capital investment on energy conservation equipments: Nil

Technology absorption:

The Company ensures that its equipment vendors share their supplier details designdrawings and train Company personnel in operation and maintenance of the equipment.

The efforts made towards technology absorption: Technology absorption is a continuousprocess and the Company has been deriving various benefits which cannot be attributed toany specific area. In all the Company stands to gain on various fronts on account ofcontinuous technology absorption. (ii) The benefits derived like product improvement costreduction product development or import substitution: Nil In case of imported technology(imported during the last three years reckoned from the beginning of the financial year):Nil

The expenditure incurred on Research and Development: Nil

C) Foreign exchange earnings and Expenditure:

Foreign exchange earnings : Nil Foreign exchange Expenditure:- Revenue Expenditure: NilCapital Expenditure :Rs. 4.30 cr

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

The Board has constituted an Independent Audit Committee details of which areenumerated in the Corporate Governance Report. The Company has devised a vigil mechanismin the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) ofthe Companies Act 2013 and the policy is explained in Corporate Governance report andalso posted on the website of Company and can be accessed at the linkwww.kkvagropowers.com. During the year under review there was no complaint received underthis mechanism.

25. INTERNAL AUDITORS:

Pursuant to the Provisions of Section 138 of the Companies Act 2013 and relevant rulesmade thereunder your Company has appointed M/s. Suri & Co. Chartered Accountants(FRN: 004283S) as Internal Auditors for the Financial Year 2020-21. The Audit Committeediscusses and reviews with the Internal Auditors about the functions and activities of thecompany at periodic intervals. The Audit Committee then appraises the Board of Directorsabout the findings if any.

26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All transactions with Related Parties are at arm's length and in the ordinary course ofbusiness duly approved by the Audit Committee. The details of material related partytransactions at arm's length and in the ordinary course of business are detailed in FormAOC-2 and the same is furnished in Annexure - 3 to this report.

The Board has formulated Policy on Related Party Transactions and the same is uploadedon the Company's websiteathttp://kkvagropowers.com/wp-content/uploads/2016/06/POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf.

27. RISK MANAGEMENT POLICY:

The Management has devised robust Risk Management Policy considering the nature ofIndustry and associated risks pertaining to the Industry. The Management is overseeing theimplementation of the Policy on regular basis.

28. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of The Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. G. V and Associates Company Secretaries in Practice Coimbatore toundertake the Secretarial Audit of the Company. The report of the Secretarial Auditor isfurnished as Annexure - 4 to this report.

29. CORPORATE SOCIAL RESPONSIBILITY:

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

30. PARTICULARS OF REMUNERATION PAID TO KEY MANAGERIAL PERSONNEL:

The information required pursuant to the provisions of Section 197(12) read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of the remuneration of Directors Key Managerial Personnel and employees areenclosed as Annexure - 5 forming part of the report.

31. INSIDER TRADING REGULATIONS:

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations 1992read with SEBI (Prohibition of Insider Trading) Regulations 2015 as amended from time totime the Code of Conduct for prevention of Insider Trading and the Code for CorporateDisclosures (”Code”) as approved by the Board from time to time are in forceby the Company. The objective of this Code is to protect the interest of Shareholders atlarge to prevent misuse of any price sensitive information and to prevent any insidertrading activity by dealing in shares of the Company by its Directors designatedemployees and other employees. The Company also adopts the concept of Trading WindowClosure to prevent its

Directors Officers designated employees and other employees from trading in thesecurities of the Company at the time when there is unpublished price sensitiveinformation.

32. DEPOSITORY SYSTEM:

As the Members are aware your Company’s Equity Shares are tradable compulsorilyin electronic form and your Company has established connectivity with both NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL). The ISIN allotted to the Company’s Equity shares is INE239T01016.

33. LISTING WITH STOCK EXCHANGES:

At present the Equity Shares of the Company are listed on the EMERGE-the SME GrowthPlatform of National Stock Exchange at Mumbai. The Company confirmed that has no duesoutstanding to the National Stock Exchange for the year 2020-2021.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

As per the requirements specified in the “The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013” the Company hasconstituted an Internal Complaints Committee and is committed to provide a workenvironment that is free from sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. There was no complaint received fromany employee during the financial year 2020-21.

35. CHANGE IN THE NATURE OF BUSINESS IF ANY

During the year there was no change in the nature of business of the company.

However we have further expanded our business into Bullion sales and purchase duringthe year.

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

There have been no material changes and commitments which affect 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.

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

There was no significant and material order passed by the regulators or courts ortribunal which would impact the going concern status and the Company’s operations infuture.

38. EXPLANATIONS OR COMMENTS BY THE BOARD ON OBSERVATION MADE BY STATUTORY AUDITORS ANDSECRETARIAL AUDITORS:

A) With reference to the remarks of the Auditors the Directors wish to state as under:

As regards to comments by the Statutory Auditors on the transaction entered into by theCompany with the related party M/s. Swathi Traders which are subject to ratification atthe ensuing Annual General Meeting we wish to state that a necessary resolution in thisbehalf is set out at item no. 8 of the notice convening the ensuing Annual General Meetingfor shareholders’ ratification.

B) The observations made by the Secretarial Auditor in the Report are self-explanatoryand hence the Board of Directors has not commented about the same.

39. DIRECTORS’ RESPONSIBILITY STATEMENT:

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

In the preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;

The Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of profitof the Company for that period;

The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

The Directors had prepared the annual accounts on a going concern basis; The Directorshad laid down Internal Financial Controls are adequate and operating effectively and TheDirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

40. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THANTHOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There was no instance of fraud identified or reported by the Statutory Auditors duringthe course of their Audit pursuant to Section 143(12) of the Companies Act 2013.

41. COMPLIANCE ON SECRETARIAL STANDARDS:

The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

42. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIMESETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIALINSTITUTIONS ALONG WITH THE REASONS THEREOF:

Not Applicable.

43. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THEFINANCIAL YEAR:

Not Applicable.

42. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude and appreciation towardsthe Company’s Suppliers Customers Investors Bankers Government of India StateGovernments and other regulatory authorities for their continued support during the year.Your Directors also acknowledge the commitment and the dedication of the employees at alllevels who have contributed to the growth of the Company.

FOR AND ON BEHALF OF THE BOARD
sd/- sd/-
T.K Chandiran A.C.Vineethkumar
(DIN: 00031091) (DIN: 06756745)
Managing Director Director
Place: Coimbatore
Date: 21-08-2021

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